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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to

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Alltrista Corporation

Indiana 0-21052 35-1828377
State of Incorporation Commission File Number IRS Identification Number

555 Theodore Fremd Avenue, Suite B302
Rye, New York 10580

Registrant's telephone number, including area code: (914) 967-9426

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

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

Outstanding at
Class October 28, 2001
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Common Stock, without par value 6,392,136 shares

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ALLTRISTA CORPORATION

Quarterly Report on Form 10-Q
For the period ended September 30, 2001

INDEX

Page
Number
------

PART I FINANCIAL INFORMATION:

Item 1. Financial Statements

Unaudited Consolidated Statements of Income for the three and nine month periods ended
September 30, 2001 and October 1, 2000................................................. 3
Unaudited Statements of Comprehensive Income for the three and nine month periods ended
September 30, 2001 and October 1, 2000................................................. 4
Unaudited Consolidated Balance Sheets at September 30, 2001 and December 31, 2000...... 5
Unaudited Consolidated Statements of Cash Flows for the nine month periods ended
September 30, 2001 and October 1, 2000................................................. 6
Notes to Unaudited Consolidated Financial Statements................................... 7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 20

PART II. OTHER INFORMATION

Item 4. Submission of matters to a vote of security holders.................................... 21
Item 6. Exhibits and Reports on Form 8-K....................................................... 21

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALLTRISTA CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

Three month period ended Ninth month period ended
----------------------- -----------------------
September 30, October 1, September 30, October 1,
2001 2000 2001 2000
------------- ---------- ------------- ----------
(thousands except per share amounts)

Net sales................................................ $ 90,477 $97,096 $ 250,102 $296,549
Costs and expenses
Cost of sales......................................... 68,299 73,973 188,312 223,794
Selling, general and administrative expenses.......... 14,352 14,660 40,626 45,634
Goodwill amortization................................. 1,626 1,632 4,876 4,771
Special charges (credits) and reorganization expenses. 3,901 2,219 233 891
Loss on thermoforming net assets held for sale........ 119,725 -- 119,725 --
--------- ------- --------- --------
Operating earnings (loss)................................ (117,426) 4,612 (103,670) 21,459
Interest expense, net.................................... (2,180) (3,041) (8,351) (9,204)
--------- ------- --------- --------
Income (loss) before taxes and minority interest......... (119,606) 1,571 (112,021) 12,255
Income tax (provision) benefit........................... 36,496 -- 33,606 (4,167)
Minority interest in loss of consolidated subsidiary..... 78 70 256 207
--------- ------- --------- --------
Net income (loss)........................................ $ (83,032) $ 1,641 $ (78,159) $ 8,295
========= ======= ========= ========
Basic earnings (loss) per share.......................... $ (13.04) $ .26 $ (12.30) $ 1.31
Diluted earnings (loss) per share........................ $ (13.04) $ .26 $ (12.30) $ 1.30
Weighted average shares outstanding:
Basic................................................. 6,368 6,310 6,354 6,344
Diluted............................................... 6,368 6,353 6,354 6,392

See accompanying notes to unaudited consolidated financial statements.

ALLTRISTA CORPORATION

UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

Three month period ended Nine month period ended
----------------------- -----------------------
September 30, October 1, September 30, October 1,
2001 2000 2001 2000
------------- ---------- ------------- ----------
(thousands of dollars)

Net income (loss)......................... $(83,032) $1,641 $(78,159) $8,295
Foreign currency translation.............. (319) (300) (369) (548)
Interest rate swap unrealized gain (loss):
Transition adjustment.................. -- -- 45 --
Change during period................... (116) -- (981) --
-------- ------ -------- ------
Comprehensive income (loss)............... $(83,467) $1,341 $(79,464) $7,747
======== ====== ======== ======

See accompanying notes to unaudited consolidated financial statements.

ALLTRISTA CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2001 2000
------------- ------------
(thousands of dollars)

ASSETS
Current assets
Cash and cash equivalents......................................... $ 6,828 $ 3,303
Accounts receivable, net.......................................... 23,264 32,806
Inventories, net.................................................. 22,877 52,548
Deferred taxes on income.......................................... 5,140 4,621
Prepaid expenses.................................................. 630 1,102
Net assets held for sale.......................................... 21,716 --
-------- --------
Total current assets.......................................... 80,455 94,380
-------- --------
Property, plant and equipment, at cost............................... 132,573 186,462
Accumulated depreciation............................................. (87,758) (97,410)
-------- --------
44,815 89,052
Goodwill, net........................................................ 15,764 114,138
Deferred taxes on income............................................. 32,029 --
Other assets......................................................... 8,114 11,169
-------- --------
Total assets.................................................. $181,177 $308,739
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt................................. $ 27,500 $ 25,995
Notes payable..................................................... -- 16,000
Accounts payable.................................................. 18,361 17,842
Accrued salaries, wages and employee benefits..................... 9,081 8,344
Other current liabilities......................................... 7,114 3,224
-------- --------
Total current liabilities..................................... 62,056 71,405
-------- --------
Noncurrent liabilities
Long-term debt.................................................... 73,750 95,065
Deferred taxes on income.......................................... -- 13,068
Other noncurrent liabilities...................................... 5,430 9,957
-------- --------
Total noncurrent liabilities.................................. 79,180 118,090
-------- --------
Minority interest in subsidiary...................................... 611 1,023
-------- --------
Contingencies........................................................ -- --
Shareholders' equity:
Common stock (7,963,351 common shares issued and 6,381,483 shares
outstanding at September 30, 2001).............................. 39,677 40,017
Retained earnings................................................. 39,994 118,153
Accumulated other comprehensive loss:
Cumulative translation adjustment............................... (1,347) (978)
Interest rate swap.............................................. (936) --
-------- --------
77,388 157,192
Less treasury stock (1,581,868 shares at cost at September 30, 2001). (38,058) (38,971)
-------- --------
Total shareholders' equity........................................ 39,330 118,221
-------- --------
Total liabilities and shareholders' equity.................... $181,177 $308,739
======== ========

See accompanying notes to unaudited consolidated financial statements.

ALLTRISTA CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine month period ended
-----------------------
September 30, October 1,
2001 2000
------------- ----------
(thousands of dollars)

Cash flows from operating activities
Net income (loss)................................................................ $(78,159) $ 8,295
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation................................................................... 11,203 10,892
Amortization................................................................... 5,065 5,050
Loss on thermoforming net assets held for sale................................. 119,725 --
Special charges (credits) and reorganization expenses.......................... (3,750) (1,600)
Deferred employee benefits..................................................... 216 76
Minority interest.............................................................. (412) (207)
Other, net..................................................................... 221 941
Changes in working capital components, net of effects from acquisitions and net
assets held for sale........................................................... (11,338) (5,523)
-------- --------
Net cash provided by operating activities.................................... 42,771 17,924
-------- --------
Cash flows from financing activities
Proceeds from revolving credit borrowings........................................ 29,150 44,932
Payments on revolving credit borrowings.......................................... (45,150) (36,240)
Payments on long-term debt....................................................... (19,027) (14,003)
Debt modification cost........................................................... (637) --
Proceeds from issuance of common stock........................................... 518 990
Purchase of treasury stock....................................................... -- (10,485)
-------- --------
Net cash used in financing activities........................................ (35,146) (14,806)
-------- --------
Cash flows from investing activities
Additions to property, plant and equipment....................................... (8,343) (10,786)
Insurance proceeds from property casualty........................................ 1,535 --
Acquisition of businesses, net of cash acquired.................................. -- (6,930)
Proceeds from the surrender of insurance contracts............................... 6,706 --
Proceeds from insurance contracts loaned to officers............................. (4,059) --
Other, net....................................................................... 61 112
-------- --------
Net cash used in investing activities........................................ (4,100) (17,604)
-------- --------
Net increase (decrease) in cash................................................... 3,525 (14,486)
Cash and cash equivalents, beginning of period.................................... 3,303 17,394
-------- --------
Cash and cash equivalents, end of period.......................................... $ 6,828 $ 2,908
======== ========

See accompanying notes to unaudited consolidated financial statements.

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Presentation of Consolidated Financial Statements

Certain information and footnote disclosures, including significant
accounting policies normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed
or omitted. In the opinion of management, the accompanying consolidated
financial statements include all adjustments necessary for a fair presentation
of the results for the interim periods presented. Results of operations for the
periods shown are not necessarily indicative of results for the year,
particularly in view of the seasonality for home food preservation products.
The accompanying unaudited consolidated financial statements should be read in
conjunction with the Consolidated Financial Statements and Notes to
Consolidated Financial Statements of Alltrista Corporation and Subsidiaries
included in the Company's latest annual report.

Certain reclassifications have been made in the Company's financial
statements of prior years to conform to the current year presentation. These
reclassifications have no impact on previously reported net income.

2. Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets

On October 15, 2001, the Company announced it had signed a definitive
agreement with Wilbert, Inc. to sell the assets of its Triangle, TriEnda and
Synergy World plastic thermoforming operations. The Company will retain its
thermoforming operation in Fort Smith, Arkansas, which produces plastic parts
primarily for the appliance market. The transaction is anticipated to close in
the fourth quarter and is subject to normal and customary closing conditions.
The agreement calls for a payment of $21 million in cash and a $2.5 million
non-interest bearing one-year note as well as the assumption of certain
identified liabilities. A $1.5 million deposit was received upon signing the
agreement. The Company recorded a pre-tax loss of approximately $120 million in
the third quarter to reflect the write-down of the net assets to be sold to the
amount of the estimated net proceeds from the sale. Accordingly, the net
realizable value of these net assets of approximately $21.7 million, consisting
primarily of property, plant and equipment, accounts receivable and
inventories, net of liabilities are included in Net Assets Held For Sale on the
Consolidated Balance Sheet as of September 30, 2001.

The Company expects to recover approximately $15 million of federal income
taxes paid in 1999 and 2000 as a result of the carryback of a tax net operating
loss generated in 2001. The tax net operating loss that will not be utilized
during the allowable carryback period will be available to offset taxable
income in future periods.

The combined net sales of the assets to be sold included in the Company's
historical results were approximately $52.4 million for the first nine months
of 2001, $100.3 million in 2000 and $70.7 million in 1999. Operating earnings
(losses) associated with these assets were approximately $(9.9) million for the
first nine months of 2001, $(8.4) million in 2000 and $2.8 million in 1999.

3. Pro forma Financial Information

The following unaudited pro forma information presents a summary of
consolidated results of the Company as if the proposed sale of the assets of
the Triangle, TriEnda and Synergy World plastic thermoforming operations (as
described in Note 2 above) had occurred at the beginning of each period
presented. In addition, the pro forma information excludes special charges and
reorganization expenses. The pro forma information assumes the proceeds from
the thermoformed assets to be divested were received at the beginning of each
period, and assumes a 35.0% effective income tax rate for all periods. (In
thousands except per share data.)

Nine month period ended
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September 30, October 1,
2001 2000
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Net sales................. $197,075 $213,998
Operating earnings........ 26,535 25,275
Net income................ 13,062 11,690
Diluted earnings per share $ 2.06 $ 1.83

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

4. Earnings Per Share Calculation

Basic earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted earnings
per share are calculated based on the weighted average number of outstanding
common shares plus the dilutive effect of stock options as if they were
exercised. Due to the net loss for the three-month and nine-month periods ended
September 30, 2001, the effect of the potential exercise of stock options was
not considered in the diluted earnings per share calculation for those periods
since it would be antidilutive.

A computation of earnings per share is as follows (in thousands except per
share data):

Three month period ended Nine month period ended
------------------------ ------------------------
September 30, October 1, September 30, October 1,
2001 2000 2001 2000
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Net income (loss)............................. $(83,032) $1,641 $(78,159) $8,295
-------- ------ -------- ------
Weighted average shares outstanding........... 6,368 6,310 6,354 6,344
Additional shares assuming conversion of stock
options..................................... -- 43 -- 48
-------- ------ -------- ------
Weighted average shares outstanding assuming
conversion.................................. 6,368 6,353 6,354 6,392
-------- ------ -------- ------
Basic earnings (loss) per share............... $ (13.04) $ .26 $ (12.30) $ 1.31
Diluted earnings (loss) per share--assuming
conversion.................................. $ (13.04) $ .26 $ (12.30) $ 1.30

5. Segment Information

The Company is currently organized into two segments: metal products and
plastic products. The metal products segment includes sales of zinc and
consumer products. This segment provides cast zinc strip and fabricated zinc
products primarily for zinc coinage and industrial applications. It also
markets a line of home food preservation products including home canning jars,
home canning metal closures and related food products, which are distributed
through a wide variety of retail outlets. The plastic products segment produces
injection molded plastic products used in medical, pharmaceutical and consumer
products and industrial thermoformed plastic parts for appliances, manufactured
housing, recreational vehicles, heavy trucking, agriculture equipment, portable
restrooms, recreational and construction products.

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Net sales, operating earnings and assets employed in operations by segment
are summarized as follows (thousands of dollars):

Three month period ended Nine month period ended
----------------------- -------------------------
September 30, October 1, September 30, October 1,
2001 2000 2001 2000
------------- ---------- ------------- ------------

Net Sales:
Metal products:
Consumer products............................ $ 43,609 $42,171 $ 105,760 $111,096
Zinc products................................ 11,970 13,480 37,345 44,199
Other........................................ 256 154 657 320
--------- ------- --------- --------
Total metal products..................... 55,835 55,805 143,762 155,615
--------- ------- --------- --------
Plastic products:
Industrial thermoformed parts................ 23,274 30,609 75,545 104,549
Injection molded products.................... 11,488 10,744 31,442 37,174
--------- ------- --------- --------
Total plastic products................... 34,762 41,353 106,987 141,723
--------- ------- --------- --------
Intercompany................................... (120) (62) (647) (789)
--------- ------- --------- --------
Total net sales.......................... $ 90,477 $97,096 $ 250,102 $296,549
========= ======= ========= ========
Operating earnings:
Metal products................................. $ 8,846 $ 7,983 $ 21,111 $ 19,627
Plastic products............................... (4,189) (2,270) (5,212) 1,575
Intercompany................................... (1) (47) 19 (73)
Unallocated corporate income (expense)......... (2,357) (1,054) 137 330
Loss on thermoforming net assets held for sale. (119,725) -- (119,725) --
--------- ------- --------- --------
Total operating earnings (loss).......... (117,426) 4,612 (103,670) 21,459
Interest expense, net........................... (2,180) (3,041) (8,351) (9,204)
--------- ------- --------- --------
Income (loss) before taxes and minority interest $(119,606) $ 1,571 $(112,021) $ 12,255
========= ======= ========= ========

September 30, December 31,
2001 2000
------------- ------------

Assets employed in operations:
Metal products................................. $ 72,299 $ 84,755
Plastic products (2)........................... 62,530 207,914
--------- --------
Total assets employed in operations...... 134,829 292,669
Corporate (1).................................. 46,348 16,070
--------- --------
Total assets............................. $ 181,177 $308,739
========= ========

- --------
(1) Corporate assets primarily include cash and cash equivalents, amounts
relating to benefit plans, deferred tax assets and corporate facilities and
equipment.
(2) Includes $21.7 million of thermoforming net assets held for sale.

6. Costs to Exit Facilities

In August 2001, the Company announced that it would be consolidating its
home canning metal closure production from its Bernardin Ltd. Toronto, Ontario
facility into its Muncie, Indiana manufacturing operation. The total cost to
exit the Toronto facility of $0.7 million was recorded in the third quarter of
2001 and includes a $0.3 million loss on the sale and disposal of equipment,
and $0.4 million of employee severance costs. This exit

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

cost is included in Special Charges (Credits) and Reorganization Expenses on
the Consolidated Statement of Income. Of the $0.4 million accrued liability
established for severance costs, approximately $10,000 had been expended
through September 30, 2001, with the remainder expected to be paid in the
fourth quarter.

Also in August 2001, the Company announced that it had vacated its former
Triangle Plastics facility in Independence, Iowa and integrated personnel and
capabilities into its other operating and distribution facilities in the area.
The total cost to exit this Iowa facility of $0.6 million was recorded in the
third quarter of 2001 and includes $0.4 million in future lease obligations and
an additional $0.2 million of costs related to the leased facility. This exit
cost is included in Special Charges (Credits) and Reorganization Expenses on
the Consolidated Statement of Income. Of the $0.5 million accrued liability
established for future lease payments and other costs related to the facility,
no amounts had been expended through September 30, 2001.

7. Contingencies

The Company is involved in various legal disputes in the ordinary course of
business. In addition, the Environmental Protection Agency has designated the
Company as a potentially responsible party, along with numerous other
companies, for the clean up of several hazardous waste sites. Information at
this time does not indicate that disposition of any of the legal or
environmental disputes the Company is currently involved in will have a
material, adverse effect upon the financial condition, results of operations,
cash flows or competitive position of the Company.

8. Discharge of Deferred Compensation Obligations and Related Loans

During the first and second quarters of 2001, certain participants in the
Company's deferred compensation plans agreed to forego balances in those plans
in exchange for loans from the Company in the same amounts. The loans, which
were completed during the second quarter, bear interest at the applicable
federal rate and require the individuals to secure a life insurance policy
having the death benefit equivalent to the amount of the loan payable to the
Company. All accrued interest and principal on the loans are payable upon the
death of the participant and their spouse. The Company recognized $1.9 million
and $2.2 million of pre-tax income during the first and second quarters of
2001, respectively, related to the discharge of the deferred compensation
obligations. These amounts are included in Special Charges (Credits) and
Reorganization Expenses on the Consolidated Statement of Income.

9. Inventories

Inventories at September 30, 2001 and December 31, 2000 were comprised of
the following (in thousands):

September 30, December 31,
2001 2000
------------- ------------

Raw materials and supplies $ 2,823 $14,311
Work in process........... 5,826 10,253
Finished goods............ 14,228 27,984
------- -------
Total inventories...... $22,877 $52,548
======= =======

10. New Accounting Pronouncements

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

value of derivatives will either be offset against the change in fair value of
the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings. Hedge ineffectiveness, the amount by which the change in the value of
a hedge does not exactly offset the change in the value of the hedged item,
will be immediately recognized in earnings. The adoption of SFAS 133 on January
1, 2001 did not have a material impact on the Company's results of operations
or financial position.

In July 2001, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards No. 141, Business Combinations,
and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill (and
intangible assets deemed to have indefinite lives) will no longer be amortized
but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives. The Company will apply the new rules on accounting for goodwill
and other intangible assets beginning in the first quarter of 2002. During
2002, the Company will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets, but does not anticipate a
material impact on its results of operations or financial position.

In June 2001, the FASB issued Statement of Financial Accounting Standard No.
143 (SFAS 143), Accounting for Asset Retirement Obligations, effective for
fiscal years beginning after June 15, 2002. This standard requires entities to
record the fair value of a liability for an asset retirement obligation in the
period in which it is incurred. SFAS 143 is effective for the Company beginning
with the first quarter of 2003, and its adoption is not expected to have a
material impact on the Company's results of operations or financial position.

In August 2001, the FASB issued Statement of Financial Accounting Standard
No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived
Assets, effective for fiscal years beginning after December 15, 2001. This
standard supercedes SFAS 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, and provides a single
accounting model for long-lived assets to be disposed of. The new standard also
supersedes the provisions of APB Opinion 30 with regard to reporting the
effects of a disposal of a segment of a business and requires expected future
operating losses from discontinued operations to be displayed in discontinued
operations in the period(s) in which the losses are incurred. SFAS 144 is
effective for the Company beginning with the first quarter of 2002, and its
adoption it is not expected to have a material impact on the Company's results
of operations or financial position.

11. Derivative Financial Instruments

The Company's derivative activities are initiated within the guidelines of
documented corporate risk-management policies and do not create additional risk
because gains and losses on derivative contracts offset losses and gains on the
assets, liabilities and transactions being hedged. As derivative contracts are
initiated, the Company designates the instruments individually as either a fair
value hedge or a cash flow hedge. Management reviews the correlation and
effectiveness of its derivatives on a periodic basis.

The Company uses interest rate swaps to manage a portion of its exposure to
short-term interest rate variations with respect to the London Interbank
Offered Rate on its term debt obligations. The Company has designated the
interest rate swaps as cash flow hedges. Gains and losses related to the
effective portion of the interest rate swaps are reported as a component of
other comprehensive income and reclassified into earnings in the same period
the hedged transaction affects earnings. Because the terms of the swaps exactly
match the terms of the underlying debt, the swaps are perfectly effective. The
Company anticipates that the majority of the interest rate swap unrealized loss
included in other comprehensive income at September 30, 2001 will be
reclassified into earnings by December 31, 2001. The interest rate swap
agreements expire in March 2002.

ALLTRISTA CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

12. Stock Plans

Effective September 24, 2001, the Company established the 2001 Stock Option
Plan for the purpose of granting options for the purchase of common shares to
the Company's executive officers and independent directors. Options vest to,
and are exercisable by, participants on the earlier of 1) the Company's closing
stock price equals or exceeds $17 per share or 2) the seventh anniversary of
the grant date. During September, 570,000 options were granted to participants
under this new plan. The Plan and all options granted are contingent on
ratification of the Plan by the Company's shareholders on or before September
23, 2002.

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

Management Reorganization

On September 25, 2001, the Company announced the departure from the Company
of Thomas B. Clark, Chairman, President and Chief Executive Officer, and Kevin
D. Bower, Senior Vice President and Chief Financial Officer. The Board
announced the appointment of Martin E. Franklin as Chairman and Chief Executive
Officer and Ian G.H. Ashken as Vice Chairman, Chief Financial Officer and
Secretary.

Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets

Corporate Office Reorganization

On October 15, 2001, the Company announced the closing of its Indianapolis,
Indiana corporate office. Corporate functions are scheduled to be transitioned
to the Company's new headquarters in Rye, New York and the Company's consumer
products division in Muncie, Indiana during the first quarter of 2002.

Results of Operations--Comparing Year to Date 2001 to Year to Date 2000

The Company reported net sales of $250.1 million for the first nine months
of 2001, a 15.7% decrease from net sales of $296.5 million for the same period
in 2000. Operating earnings, excluding the loss on thermoforming net assets
held for sale, decreased 25.2% from $21.5 million for the first nine months of
2000 to $16.1 million for the first nine months of 2001.

The metal products segment reported lower sales, but higher operating
earnings as price increases and cost management accounted for sustained
earnings on lower comparable sales. Sales of consumer products were lower in
the first nine months of 2001 compared with the same period a year ago due to
unfavorable weather conditions, however, the Company anticipates sales for the
fourth quarter of 2001 to be at similar levels to the comparable period a year
ago. Due in part to lower anticipated requirements from the U.S. Mint, sales of
zinc products in the fourth quarter of 2001 are expected to be below levels for
the comparable period a year ago. In July 2001, proposed legislation was
introduced to the Committee on Financial Services of the U.S. House of

Representatives which, if passed, could affect the use and demand for the U.S.
penny. The proposed legislation calls for, among other things, the rounding of
all cash transactions to the nearest nickel. Similar attempts to effectively
eliminate or reduce circulation of the penny have been initiated in the past
without success.

The plastic products segment reported lower sales as demand in the Class 8
heavy truck market continues to be well below prior year levels. Sales of
material handling products to the automotive industry were also lower than a
year ago due to weakness in that sector. Operating earnings for the plastic
products segment, while lower than the previous year, reflect the positive
effect of profit improvement initiatives implemented in 2000 and 2001, which
included realignment and consolidation of personnel and operations. See the
"Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets"
section above.

Net sales within the metal products segment decreased from $155.6 million
for the first nine months of 2000 to $143.8 million for the first nine months
of 2001. Sales of consumer products decreased $5.3 million due primarily to
unfavorable weather conditions in Canada and the western and northeastern
portions of the United States. The decrease was offset somewhat by price
increases on home canning and housewares products. Sales of zinc products
decreased $6.9 million, due primarily to reduced demand for products to the
automotive and construction markets, lower coinage sales volumes and a
customer's decision to self-manufacture zinc carbon batteries in Mexico. The
average price of zinc ingot decreased 9.6% in the first nine months of 2001
compared to the same period one year ago resulting in lower sales of
approximately $0.8 million. The Company passes on fluctuations in zinc ingot
prices to those customers who do not purchase their own zinc ingot.

Net sales within the plastic products segment decreased from $141.7 million
for the first nine months of 2000 to $107.0 million for the first nine months
of 2001. Sales of industrial thermoformed parts decreased $29.0 million or
27.7%. The severe downturn in the heavy truck market resulted in a decline in
sales to this market of approximately 51% or $11.9 million, compared to the
first nine months of 2000. Sales of material handling products, primarily to
the automotive industry and to the U.S. Postal Service, were off 41% or
approximately $14.1 million. Bath product sales also decreased $3.1 million as
the manufactured housing market remains depressed. Sales of injection molded
products were $5.7 million lower due primarily to continued softness in the
precision consumer products market, a decrease in tooling sales, as well as
some customers moving production to in-house molding operations.

Gross margin percentages increased from 24.5% for the first nine months of
2000 to 24.7% for the first nine months of 2001. Gross margin percentages on
metal products increased from 31.6% for the first nine months of 2000 to 34.0%
for the first nine months of 2001. Price increases for home canning and
housewares products as well as lower manufacturing costs for zinc products,
offset somewhat by lower overall sales volumes, accounted for the positive
effect on gross margin for the metal products segment. Additionally, the gross
margin for metal products for the current period reflects a $1.5 million charge
for slow moving inventory, while the prior period's gross margin reflects a
$1.2 million write-down of inventory relating to the Central European home
canning test market. Gross margin percentages on plastic products decreased
from 16.7% for the first nine months of 2000 to 12.0% for the first nine months
of 2001. Margins on plastic products decreased due to lower sales volumes of
thermoformed parts resulting from decreased demand in the heavy truck, material
handling and manufactured housing markets. Smaller orders have reduced the
length of production runs and, thus, diminished operating efficiencies. Lower
sales of injection molded precision consumer products also contributed to the
decline in margins.

Selling, general and administrative expenses decreased from $45.6 million
for the first nine months of 2000 to $40.6 million for the first nine months of
2001. Expenses within the metal products segment decreased primarily due to
lower costs in connection with sales and marketing, warehousing and shipping.
Expenses within the plastic products segment decreased primarily as a result of
cost savings related to the realignment and consolidation of the Company's
thermoforming operations, which occurred during the latter half of 2000. This
decrease was offset somewhat by the inclusion of the expenses of Synergy World
since its acquisition date of June 1, 2000. Selling, general and administrative
expenses as a percentage of net sales increased from 15.4% for

the first nine months of 2000 to 16.2% for the first nine months of 2001. The
increase in the percentage resulted primarily from lower sales, offset
partially by the cost savings realized due to the realignment and consolidation
of the thermoforming operations.

Goodwill amortization increased slightly for the first nine months of 2001
compared to the same period last year due to the June 2000 acquisition of
Synergy World.

The Company incurred net special charges (credits) and reorganization
expenses of $0.2 million for the first nine months of 2001, compared to $0.9
million for the same period one year ago. These amounts are comprised of the
following (in millions):

Nine month period ended
-----------------------
September 30, October 1,
2001 2000
------------- ----------

Costs to evaluate strategic options.................. $ 1.4 $ 0.3
Discharge of deferred compensation obligations....... (4.1) --
Separation costs for officers........................ 2.6 --
Cost to exit facilities.............................. 1.3 --
Gain from insurance recovery......................... (1.0) --
Reduction of long-term performance-based compensation -- (1.6)
Litigation charges................................... -- 2.2
----- -----
$ 0.2 $ 0.9
===== =====

Costs incurred by the Company to evaluate its strategic options were $1.4
million for the first nine months of 2001 compared to $0.3 million for the
first nine months of 2000.

Separation costs associated with the management reorganization announced by
the Company on September 25, 2001 (see the "Management Reorganization" section
above), were approximately $2.6 million.

During the second quarter of 2001, the Company recorded a pre-tax gain of
$1.0 million in connection with an insurance recovery associated with a
property casualty.

During the second quarter of 2000, the Company recorded a pre-tax gain of
$1.6 million related to a reduction in long-term performance-based compensation.

During the third quarter of 2000, the Company reached settlements in two
legal disputes incurring $2.2 million in settlement and legal expenses in the
aggregate.

Net interest expense decreased from $9.2 million for the first nine months
of 2000 to $8.4 million for the first nine months of 2001. The decrease is due
primarily to lower average borrowings outstanding and lower interest rates in
the first nine months of 2001 compared to those in the same period one year
ago, offset somewhat by debt issuance costs associated with the amendment of
the Company's debt agreement. The Company's effective tax rate was 34.0% for
the first nine months of 2000 compared to 30.0% for the first nine months of
2001. The current year effective rate is lower than the statutory federal rate
as it includes a valuation allowance for tax benefits associated with the loss
on the sale of the thermoforming assets that may not be realizable. The
effective rate in the prior year reflects the recognition of a tax benefit from
exiting the Central European home canning test market.

Earnings before interest, taxes, depreciation and amortization, excluding
the loss on thermoforming net assets held for sale and special charges
(credits) and reorganization expenses, were $32.6 million for the first nine
months of 2001 as compared to $38.3 million for the same period in 2000.

Results of Operations--Comparing Third Quarter 2001 to Third Quarter 2000

The Company reported net sales of $90.5 million for the third quarter of
2001, a 6.8% decrease from net sales of $97.1 million in the third quarter of
2000. Operating earnings, excluding the loss on thermoforming net assets held
for sale, decreased 50.2% from $4.6 million for the third quarter of 2000 to
$2.3 million for the third quarter of 2001.

The metal products segment reported a similar level of sales, but higher
operating earnings during the third quarter of 2001 as compared to the same
period in 2000. Sales of consumer products were higher than a year ago due to
price increases on home canning and housewares products. The Company
anticipates sales of consumer products for the fourth quarter of 2001 to be at
similar levels to the comparable period a year ago. Sales of zinc products were
lower than the previous year due to reduced shipments to the U.S. Mint and the
elimination of sales of zinc battery cans as the customer moved the production
of batteries to Mexico. Lower demand for zinc products used in the automotive
market also contributed to the decline. The Company anticipates sales of zinc
products for the fourth quarter of 2001 to be below levels for the comparable
period a year ago due in part to lower anticipated requirements from the U.S.
Mint. The increase in operating earnings for the metal products segment for the
current quarter compared to the same period last year reflects price increases
and aggressive cost management, offset somewhat by lower sales volumes of zinc
products as well as costs incurred related to the exit of the Bernardin
facility in Toronto.

The plastic products segment reported lower sales and operating earnings for
the quarter. Sales of industrial thermoformed parts were lower in the third
quarter of 2001 as the heavy truck market continues to experience depressed
conditions and sales of material handling products, particularly to the
automotive industry, have been negatively effected by economic conditions.
Operating earnings for the plastic products segment, while lower than the
previous year, reflect the positive effect of profit improvement initiatives
implemented in 2000 and 2001, which included realignment and consolidation of
personnel and operations. See the "Pending Sale of Triangle, TriEnda and
Synergy World Thermoforming Assets" section above.

Net sales within the metal products segment were $55.8 million for the third
quarter of 2001, remaining approximately the same as net sales for the third
quarter of 2000. Sales of consumer products increased $1.4 million due
primarily to price increases on home canning and housewares products. Sales of
zinc products decreased $1.5 million due primarily to reduced demand for
products to the automotive market, lower coinage sales volumes and a customer's
decision to self-manufacture zinc carbon batteries in Mexico. The average price
of zinc ingot decreased 19.0% in the third quarter of 2001 compared to the same
period one year ago resulting in lower sales of approximately $0.4 million. The
Company passes on fluctuations in zinc ingot prices to those customers who do
not purchase their own zinc ingot.

Net sales within the plastic products segment decreased from $41.4 million
for the third quarter of 2000 to $34.8 million for the third quarter of 2001.
Sales of industrial thermoformed parts decreased $7.3 million or 24.0%. The
severe downturn in the heavy truck market resulted in a decline in sales to
this market of approximately 38% or $2.3 million, compared to the third quarter
of 2000. Sales of material handling products, primarily to the automotive
industry and to the U.S. Postal Service, were off 44% or approximately $4.6
million. Bath product sales also decreased $0.6 million as the manufactured
housing market remains depressed. Sales of injection molded products increased
by $0.7 million due primarily to an increase in tooling sales, as well as
increased sales of healthcare products.

Gross margin percentages increased from 23.8% for the third quarter of 2000
to 24.5% for the third quarter of 2001. Gross margin percentages on metal
products increased from 32.3% for the third quarter of 2000 to 35.4% for the
third quarter of 2001. Margins increased primarily due to price increases for
home canning and housewares products offset somewhat by lower overall sales
volumes of zinc products. Additionally, the gross margin percentage for metal
products for the current period reflects a $1.5 million charge for slow moving
inventory, while the prior period's gross margin reflects a $1.2 million
write-down of inventory relating to the Central European home canning test
market. Gross margin percentages on plastic products decreased from 12.5% in
the third quarter of 2000 to 6.9% in the third quarter of 2001. Lower sales
volumes of industrial thermoformed parts associated with the decreased demand
in the heavy truck, material handling and manufactured housing markets resulted
in the lower margins. Smaller orders have reduced the length of production runs
and, thus, diminished operating efficiencies.

Selling, general and administrative expenses decreased from $14.7 million
for the third quarter of 2000 to $14.4 million for the third quarter of 2001.
Expenses within the metal products segment for the current quarter remained
approximately the same when compared to the same period one year ago. Expenses
within the plastic products segment decreased due in part to cost savings
related to the realignment and consolidation of the Company's thermoforming
operations, which occurred during the latter half of 2000. The inclusion of
certain expenses related to that realignment and consolidation in the prior
year quarter also contributed to the decrease. Selling, general and
administrative expenses as a percentage of net sales increased from 15.1% for
the third quarter of 2000 to 15.9% for the third quarter of 2001. The increase
in the percentage resulted primarily from lower sales, offset somewhat by the
cost savings realized due to the realignment and consolidation of the
thermoforming operations and the inclusion in the prior year quarter of certain
expenses related to that action.

Goodwill amortization remained approximately the same for the third quarter
of 2001 compared to the same period last year.

The Company incurred net special charges (credits) and reorganization
expenses of $3.9 million for the third quarter of 2001, compared to $2.2
million for the same period one year ago. These amounts are comprised of the
following (in millions):

Three month period ended
------------------------
September 30, October 1,
2001 2000
------------- ----------

Separation costs for officers...................... $2.6 $ --
Cost to exit facilities............................ 1.3 --
Litigation charges................................. -- 2.2
---- ----
$3.9 $2.2
==== ====

Separation costs associated with the management reorganization announced by
the Company on September 25, 2001 (see the "Management Reorganization" section
above), were approximately $2.6 million.

The total cost to exit the Toronto facility of $0.7 million was recorded in the
third quarter of 2001 and includes a $0.3 million loss on the sale and disposal
of equipment, and $0.4 million of employee severance costs.

During the third quarter of 2000, the Company reached settlements in two
legal disputes incurring $2.2 million in settlement and legal expenses in the
aggregate.

Net interest expense decreased from $3.0 million for the third quarter of
2000 to $2.2 million for the third quarter of 2001. The decrease is due
primarily to lower average borrowings outstanding and lower interest rates in
the third quarter of 2001 compared to those in the same period one year ago.
The Company's effective tax rate for the third quarter of 2001 was 30.5%. The
rate is lower than the statutory federal rate as it includes a valuation
allowance for tax benefits associated with the loss on the sale of the
thermoforming assets that may not be realizable. The Company did not record a
provision for income taxes in the third quarter of 2000 as the Company adjusted
its year-to-date tax provision in that quarter to reflect the recognition of a
tax benefit for the losses incurred in the Central European home canning test
market.

Earnings before interest, taxes, depreciation and amortization, excluding
the loss on thermoforming net assets held for sale and special charges
(credits) and reorganization expenses, were $11.6 million for the third quarter
of 2001 as compared to $12.3 million for the same period in 2000.

Financial Condition, Liquidity and Capital Resources

In February 2001, the Company entered into an agreement with its lenders to
amend certain provisions of its term loan and revolving credit facility and
waive violations of its minimum fixed charge ratio and maximum leverage ratio
at December 31, 2000. The amendment reduced the revolving credit facility from
$100 million to $50 million, provides for the Company's accounts receivable and
inventory to be pledged as collateral, and modified certain financial covenants.

In November 2001, the Company entered into an agreement with its lenders to
amend certain provisions of its term loan and revolving credit facilities and
to waive violations of its minimum net worth, minimum fixed charge ratio and
maximum leverage ratio which resulted primarily from the loss on thermoforming
net assets held for sale. The amendment reduced the revolving credit facility
from $50 million to $40 million, shortened the facility termination date by one
year, accelerated the required principal payments to conform with the shortened
term of the facility, requires that the proceeds from the sale of the
thermoforming assets be used to prepay term debt and modified certain financial
covenants.

Working capital (excluding the current portion of long-term debt and notes
payable, and excluding for the current period the effects of the classification
of net assets held for sale as described in the "Pending Sale of Triangle,
TriEnda and Synergy World Thermoforming Assets" section above) decreased $20.8
million from $65.0 million at December 31, 2000 to $44.1 million at September
30, 2001. Accounts payable increased $5.4 million due primarily to an increased
focus on cash flow and the timing of payments. Accounts receivable increased
$3.5 million due to the seasonal sales of consumer products. Inventories
decreased $14.3 million due primarily to an increased focus on inventory
management and due to seasonal consumer product activity. Cash and cash
equivalents increased $3.5 million, while short-term borrowings decreased $16.0
million.

Capital expenditures were $8.3 million for the first nine months of 2001
compared to $10.8 million for the same period in 2000 and are largely related
to maintaining facilities and improving manufacturing efficiencies.

Capital expenditures during the first nine months of 2001 related to, among
other items, injection molding machines, a co-extrusion line for the production
of plastic sheet used in thermoforming operations and the repair and
replacement of portions of a building and equipment damaged in a
weather-related roof collapse.

The Company believes that existing funds, cash generated from operations and
its debt facility are adequate to satisfy its working capital and capital
expenditure requirements for the foreseeable future. However, the Company may
raise additional capital from time to time to take advantage of favorable
conditions in the capital markets or in connection with the Company's corporate
development activities.

Contingencies

Stock Plans

New Accounting Pronouncements

The Company adopted Statement of Financial Accounting Standard 133 (SFAS
133), Accounting for Derivative Instruments and Hedging Activities, on January
1, 2001. The statement requires the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted
to fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will either be
offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Hedge ineffectiveness, the
amount by which the change in the value of a hedge does not exactly offset the
change in the value of the hedged item, will be immediately recognized in
earnings. The adoption of SFAS 133 on January 1, 2001 did not have a material
impact on the Company's results of operations or financial position.

In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill (and intangible assets
deemed to have indefinite lives) will no longer be amortized but will be
subject to annual impairment tests in accordance with the Statements. Other
intangible assets will continue to be amortized over their useful lives. The
Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. During 2002, the
Company will perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets, but does not anticipate a material impact
on its results of operations or financial position.

which it is incurred. SFAS 143 is effective for the Company beginning with the
first quarter of 2003, and its adoption is not expected to have a material
impact on the Company's results of operations or financial position.

Forward-Looking Information

This Quarterly Report on Form 10-Q includes certain "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Those statements include,
but may not be limited to, discussions regarding expectations of future sales
and profitability, anticipated demand for the Company's products and
expectations regarding operating and other expenses. Reliance on
forward-looking statements involves risks and uncertainties. Although the
Company believes that the forward-looking statements contained herein are based
on reasonable assumptions, any of those assumptions could prove to be
inaccurate. As a result, the forward-looking statements based on those
assumptions could also be incorrect. Please see the Company's Annual Report on
Form 10-K for 2000 for a list of factors which could cause the Company's actual
results to differ materially from those projected in the Company's
forward-looking statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

In general, business enterprises can be exposed to market risks including
fluctuations in commodity prices, foreign currency values, and interest rates
that can affect the cost of operating, investing, and financing. The Company's
exposures to these risks are low. Over 90% of the Company's zinc business is
conducted on a tolling basis whereby customers supply zinc to the Company for
processing, or supply contracts provide for fluctuations in the price of zinc
to be passed on to the customer.

The Company from time to time invests in short-term financial instruments
with original maturities usually less than thirty days. The Company is exposed
to short-term interest rate variations with respect to London Interbank Offered
Rate ("LIBOR") on its term and revolving debt obligations. A portion of this
risk has been managed through the use of interest rate swaps, completed in
1999, whereby the Company effectively pays a maximum interest rate of 7.98% on
60% of the outstanding term debt balance for a period of three years.

Changes in LIBOR interest rates would affect the earnings of the Company
either positively or negatively depending on the changes in short-term interest
rates. Assuming that LIBOR rates increased 100 basis points over period end
rates on the outstanding term and revolver debt, the Company's interest
expense, after considering the effects of its interest rate swap, would have
increased by approximately $430,000 and $485,000 for the nine month periods
ended September 30, 2001 and October 1, 2000, respectively. The amount was
determined by considering the impact of the hypothetical interest rates on the
Company's borrowing cost, short-term investment rates, interest rate swap and
estimated cash flow. Actual changes in rates may differ from the assumptions
used in computing this exposure.

The Company does not invest or trade in any derivative financial or
commodity instruments, nor does it invest in any foreign financial instruments.

PART II. OTHER INFORMATION

Item 4. Submission of matters to a vote of security holders

The Company held its Annual Meeting of Shareholders on July 27, 2001.
Matters voted upon by proxy were the election of three directors for three-year
terms expiring in 2004 and the ratification of the appointment of Ernst & Young
LLP as independent accountants for 2001. The results of the vote are as follows:

Voted For Voted Against Withheld/Abstained
--------- ------------- ------------------

Election of directors for terms expiring in 2004:
Ian G. H. Ashken........................................ 4,820,869 -- 137,112
Richard L. Molen........................................ 4,812,490 -- 145,491
Lynda W. Popwell........................................ 4,813,088 -- 144,893
Appointment of Ernst & Young LLP as independent accountants
for 2001................................................. 4,929,333 24,632 4,016

Item 6. Exhibits and Reports on Form 8-K

a. Exhibits

10.1 Separation Agreement between Jerry T. McDowell and Alltrista Corporation, dated September 19,
2001.

10.2 Separation Agreement between Garnet E. King and Alltrista Corporation, dated September 19,
2001.

10.3 Separation Agreement between A. Bruce Buchholz and Alltrista Corporation, dated September 14,
2001.

10.4 Separation Agreement between Kevin D. Bower and Alltrista Corporation, dated September 25,
2001.

10.5 Separation Agreement between Thomas B. Clark and Alltrista Corporation, dated October 5,
2001.

10.6 Alltrista Corporation 2001 Stock Option Plan, effective September 24, 2001.

10.7 Asset Purchase Agreement by and between Alltrista Plastics Corporation, TriEnda Corporation,
Quoin Corporation, Alltrista Corporation and Wilbert, Inc., dated October 15, 2001.

b. Reports on Form 8-K
In a Form 8-K (Commission File Number 0-21052) filed August 21, 2001, the
Company announced that effective July 19, 2001 it had amended its existing
Stockholder Rights Plan to increase from 10 percent to 15 percent the common
stock ownership threshold at which any person or group becomes an "acquiring
person" and triggers certain provisions under the Rights Plan. As revised, if a
person or group becomes the beneficial owner of 15 percent or more of the
outstanding shares of Alltrista common stock, subject to certain exceptions,
holders of rights (other than the acquiring person) would have the right to
purchase Alltrista common stock at a 50 percent discount.
In a Form 8-K (Commission File Number 0-21052) filed September 28, 2001, the
Company filed a press release dated September 25, 2001 announcing the departure
from the Company of Thomas B. Clark, the Company's Chairman, President and
Chief Executive Officer, and Kevin D. Bower, the Company's Senior Vice

President and Chief Financial Officer. The Company's Board of Directors also
recognized the contributions and efforts of Mr. Clark and Mr. Bower and
announced the appointment of Martin E. Franklin as Chairman and Chief Executive
Officer and Ian G.H. Ashken as Vice Chairman, Chief Financial Officer and
Secretary.
In a Form 8-K (Commission File Number 0-21052) filed October 17, 2001, the
Company filed two press releases dated October 15, 2001. The Company's first
release announced that it has signed a definitive agreement with Wilbert, Inc.
to sell its Triangle, TriEnda and Synergy World plastic thermoforming
businesses. The Company's second release announced the Company's decision to
close its Indianapolis headquarters, the Company's intent to renegotiate its
current financing arrangements, the Company's withdrawal of its previously
announced earnings guidance for 2001 and the Company's termination of its
agreement with Bear Stearns & Co., Inc. to pursue a review of the Company's
strategic options.