SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                  For the quarterly period ended March 31, 2000

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                For the transition period from _______ to _______

                         Commission file number 1-12271




                                  CARSON, INC.


             (Exact name of registrant as specified in its charter)


             DELAWARE                                    06-1428605
(State or other jurisdiction of                  (I.R.S. Employer Identification
     incorporation or organization)                   Number)


                     64 Ross Road, Savannah Industrial Park
                             Savannah, Georgia 31405
          (Address, including zip code, of principal executive offices)



       Registrant's telephone number, including area code: (912) 651-3400




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


   At March  31,  2000,  10,083,485  shares of the  registrant's  Class A Common
      Stock, par value $0.01 per share, and 5,126,163 shares of the registrant's
      Class C Common Stock, par value $0.01 per share were outstanding.



                                       1
<PAGE>




                                  CARSON, INC.

                                      INDEX

Part I.  Financial Information                                              Page

         Item 1.

         Condensed Consolidated Balance Sheets
         March 31, 2000 and December 31, 1999................................  3

         Condensed Consolidated Statements of Operations
         Three Months Ended March 31, 2000 and 1999..........................  4

         Condensed Consolidated Statements of Cash Flows
         Three Months Ended March 31, 2000 and 1999........................... 5

         Notes to Condensed Consolidated Financial Statements.............. 6-14

         Item 2.

         Management's Discussion and Analysis of Financial Condition
         and Results of Operations........................................ 15-19


Part II.  Other Information.................................................. 20


         Item 6.

         (a) Exhibits ....................................................... 20

         (b) Reports on Form 8-K............................................. 20

         Signatures.......................................................... 21




                                       2
<PAGE>


                                  CARSON, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share and per share data)
<TABLE>
<CAPTION>

                                                                                                       March 31,       December 31,
                                            ASSETS                                                       2000              1999
                                                                                                    ==============    ==============
                                                                                                      (Unaudited)
<S>                                                                                                   <C>               <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                                          $     4,968       $     8,740
   Accounts receivable less allowances of $6,441 at March 31, 2000 and $5,490
     at December 31, 1999                                                                                  31,086            35,459
   Inventories                                                                                             26,515            28,332
   Investments                                                                                              2,290             2,435
   Other current assets                                                                                       543               507
                                                                                                    --------------    --------------
      Total current assets                                                                                 65,402            75,473

PROPERTY, PLANT AND EQUIPMENT, net                                                                         36,682            37,190

INVESTMENTS                                                                                                 3,054             3,248

INTANGIBLES, net                                                                                          122,784           124,285

OTHER ASSETS                                                                                                6,205             6,452

                                                                                                    --------------    --------------
      TOTAL ASSETS                                                                                    $   234,127       $   246,648
                                                                                                    ==============    ==============


                                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                                                   $     7,580       $    14,373
   Accrued expenses                                                                                        13,520            13,630
   Payable to AM Cosmetics                                                                                     --             2,000
   Income taxes payable                                                                                       486               566
                                                                                                    --------------    --------------
      Total current liabilities                                                                            21,586            30,569

LONG-TERM DEBT                                                                                            140,962           138,314

OTHER LIABILITIES                                                                                           3,704             3,769

MINORITY INTEREST IN SUBSIDIARY                                                                            18,973            20,127

STOCKHOLDERS' EQUITY:
   Preferred stock, $.01 par value, 10,000,000 shares authorized, none outstanding                             --                --
   Common stock:
      Class A, voting, $.01 par value, 150,000,000 shares authorized,  10,096,730 shares issued               101               101
      Class B, nonvoting, $.01 par value, 2,000,000 shares authorized, 0 shares issued
        and outstanding                                                                                        --                --
      Class C, voting, $.01 par value, 13,000,000 shares authorized, 5,155,132 shares issued                   52                52

   Paid-in capital                                                                                         81,500            81,500
   Accumulated deficit                                                                                    (21,772)          (18,208)
   Accumulated other comprehensive losses                                                                  (9,404)           (8,001)
   Notes receivable from shareholders, net of discount                                                     (1,238)           (1,238)
   Treasury stock, 13,245 shares of Class A common stock and 28,969 shares
     of Class C common stock                                                                                 (337)             (337)
                                                                                                    --------------    --------------
      Total stockholders' equity                                                                           48,902            53,869

                                                                                                    --------------    --------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                      $   234,127       $   246,648
                                                                                                    ==============    ==============
</TABLE>
The accompanying  notes are an  integral  part of these  consolidated  financial
statements.

                                       3
<PAGE>


                                  CARSON, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                      (In thousands, except per share data)


<TABLE>
<CAPTION>
                                                                            Three Months Ended March 31,
                                                                 ===================================================
                                                                         2000                            1999
                                                                 ====================            ===================
<S>                                                                <C>                             <C>
Net sales                                                          $          37,931               $         41,653
Cost of goods sold                                                            19,213                         19,885
                                                                 --------------------            -------------------
Gross profit                                                                  18,718                         21,768
                                                                 --------------------            -------------------

Marketing and selling expenses                                                10,216                         10,324
General and administrative expenses                                            7,489                          7,227
                                                                 --------------------            -------------------
Operating expenses                                                            17,705                         17,551
                                                                 --------------------            -------------------

Operating income                                                               1,013                          4,217

Interest expense                                                              (4,833)                        (4,277)
Other income, net                                                                272                            890
                                                                 --------------------            -------------------

(Loss) income before income taxes and minority interest                       (3,548)                           830

Provision for income taxes                                                       (60)                          (110)
                                                                 --------------------            -------------------
(Loss) income before minority interest                                        (3,608)                           720

Minority interest in loss (earnings) of subsidiary                                44                           (540)
                                                                 --------------------            -------------------
Net (loss) income                                                  $          (3,564)              $            180
                                                                 ====================            ===================


Basic and diluted net (loss) income per common share               $           (0.23)              $           0.01
                                                                 ====================            ===================

Weighted average common shares outstanding                                    15,210                         15,079
                                                                 ====================            ===================
</TABLE>

            See notes to condensed consolidated financial statements.


                                       4
<PAGE>


                                  CARSON, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                   Three Months Ended March 31,
                                                                                 2000                        1999
                                                                          ===================        ===================
<S>                                                                         <C>                        <C>
OPERATING ACTIVITIES:
     Net (loss) income                                                      $         (3,564)          $            180
     Adjustments to reconcile net (loss) income to
       net cash used in operating activities:
            Depreciation and amortization                                              1,993                      1,759
            Interest deferred on secured term loan                                     2,648                        897
            Provision for doubtful accounts                                              388                        334
            Minority interest in (loss) earnings of subsidiary                           (44)                       540
            Other, net                                                                    77                        364
            Changes in operating assets and liabilities:
                   Accounts receivable                                                 3,255                     (2,252)
                   Inventories                                                         1,291                        341
                   Restricted cash                                                        --                        499
                   Other current assets                                                  (50)                      (283)
                   Accounts payable                                                   (8,581)                    (3,595)
                   Accrued liabilities                                                    62                         73
                   Income taxes payable                                                  (87)                      (604)
                                                                          -------------------        -------------------
                        Total adjustments                                                952                     (1,927)
                                                                          -------------------        -------------------
            Net cash used in operating activities                                     (2,612)                    (1,747)
                                                                          -------------------        -------------------

INVESTING ACTIVITIES:
     Additions to property, plant and equipment                                         (882)                    (2,064)
                                                                          -------------------        -------------------
            Net cash used in investing activities                                       (882)                    (2,064)
                                                                          -------------------        -------------------

FINANCING ACTIVITIES:
     Payment on A&J Cosmetics payable                                                     --                     (6,171)
     Principal payments on long-term debt                                                 --                        (45)
     Other, net                                                                           --                        (58)
                                                                          -------------------        -------------------
            Net cash used in financing activities                                         --                     (6,274)
                                                                          -------------------        -------------------

EFFECT OF EXCHANGE RATE CHANGES                                                         (278)                      (743)

NET DECREASE IN CASH AND CASH EQUIVALENTS                                             (3,772)                   (10,828)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                       8,740                     28,706
                                                                          -------------------        -------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                  $          4,968           $         17,878
                                                                          ===================        ===================

</TABLE>

            See notes to condensed consolidated financial statements.

                                       5
<PAGE>


                                   CARSON, INC
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.  Basis of Presentation

    The accompanying  condensed  consolidated  interim  financial  statements of
Carson, Inc. (the "Company") presented herein have been prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in annual  financial  statements  prepared in accordance with generally
accepted  accounting  principles  have  been  omitted  from  these  consolidated
financial  statements  pursuant  to  applicable  rules  and  regulations  of the
Securities and Exchange Commission. These financial statements should be read in
conjunction  with the audited  Consolidated  Financial  Statements and the notes
thereto of the  Company's  1999  Annual  Report on Form 10-K.  In the opinion of
management,  the accompanying  unaudited financial statements contain all normal
recurring  adjustments  necessary  to  present  fairly the  Company's  financial
position,  results of operations and cash flows at the dates and for the periods
presented.  Interim results of operations are not necessarily  indicative of the
results to be expected for a full year.  Certain prior period  amounts have been
reclassified to conform with the current period presentation.

2.    Inventories

Inventories are summarized as follows (in thousands):

                                            March 31, 2000    December 31, 1999
                                       -------------------- --------------------
Raw materials                                     $ 12,054             $ 12,658
Work-in-process                                      3,062                3,048
Finished goods                                      11,400               12,626
                                       -------------------- --------------------
                                                  $ 26,515             $ 28,332
                                       ==================== ====================






                                       6
<PAGE>

3.  Comprehensive Loss

The components of comprehensive loss are summarized as follows (in thousands):

                                                 Three Months     Three Months
                                                        Ended            Ended
                                               March 31, 2000   March 31, 1999
                                              ---------------- ----------------
         Net (loss) income                          $ (3,564)        $    180
         Other comprehensive loss:
         Change in equity due to foreign
         currency translation adjustments             (1,403)          (1,230)
                                              ---------------- ----------------
         Comprehensive loss                         $ (4,967)        $ (1,050)
                                              ================ ================


4.  New Accounting Pronouncements

Statement of Financial  Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS 133"), as amended, will be required to
be adopted by the Company  effective with the quarter ending March 31, 2001. The
Company has not yet completed  its  evaluation of the effect of this standard on
its financial statements.

5.  Going Concern

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern. The Company reported a net loss of
$14.3  million  for the  year  ended  December  31,  1999 and a net loss of $3.6
million for the quarter ended March 31, 2000.  The Company  elected to defer the
monthly  interest  payment on its secured  term loan six times in 1999 and three
times in 2000 and  thereby  added  $7.6  million  to the  outstanding  principal
balance,  which  totaled $65.3 million at December 31, 1999 and $68.0 million at
March 31, 2000.

On May 1, 2000,  the  Company  paid  approximately  $4.5  million  of  interest,
including a $3.8 million semi-annual  interest payment on the subordinated notes
and a $0.7  million  monthly  interest  payment on the  secured  term loan.  The
Company paid these interest payments from cash provided by operations.

Current  operating  budgets and cash flow projections  indicate that the Company
will build cash throughout the second half of 2000. However,  these earnings and
cash  flow   projections  are  based  upon  the  successful   launches  of  new,
reformulated  or  repackaged  products and the  achievement  of net sales levels
substantially  higher than historical net sales levels. As a result,  management
cannot be certain it will have  sufficient  cash resources to meet its long-term
debt repayment  requirements.  Failure to meet debt repayment requirements would
result in the Company being in default of its loan covenants,  in which case the
Company's long-term debt would become immediately due and payable.

These matters raise substantial doubt about the Company's ability to continue as


                                       7
<PAGE>

a going  concern.  These  consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.


6.   Consolidating Financial Information of Carson, Inc.

The following  condensed  consolidating  financial  information is presented for
regulatory  purposes in connection with the registration of Carson,  Inc.'s 10 %
Senior  Subordinated  Notes due 2007  (the  "Notes").  The  Notes are  currently
guaranteed on a senior  subordinated  basis by Carson Products  Company ("Carson
Products"),  a direct wholly-owned  subsidiary of the Company.  Johnson Products
Co., Inc. ("Johnson Products"),  and Dermablend,  Inc. ("Dermablend"),  formerly
indirect  wholly-owned  subsidiaries  of the  Company,  were  merged into Carson
Products  during 1999.  The following  tables  present  condensed  consolidating
financial   information  for  the  Company,   the  guarantor   subsidiary,   the
non-guarantor   subsidiaries   of  the  Company   (other  than   inconsequential
non-guarantor  subsidiaries)  and the  eliminations  necessary  to arrive at the
consolidated financial statements of the Company and its subsidiaries.  Separate
financial  statements  for the  guarantor  subsidiary  are not  included and the
guarantor  subsidiary  is not  filing  separate  reports  under  the  Securities
Exchange Act of 1934, as amended, because the guarantor subsidiary has fully and
unconditionally  guaranteed  the Notes,  and separate  financial  statements and
other disclosures concerning the guarantor subsidiary are not deemed material to
investors.

Non-guarantor  subsidiaries  include  Carson  Holdings,  Limited  ("Carson South
Africa"),  Carson UK Limited ("Carson UK") and Carson Management Company. Carson
UK is an indirect wholly-owned  subsidiary of the Company.  Carson South Africa,
an indirect  52.5%-owned  non-guarantor  subsidiary  of the  Company,  has three
wholly-owned  subsidiaries  which  are  also  non-guarantors:   Carson  Products
(Proprietary)  Limited,  Carson Products West Africa Limited and Carson Products
East  Africa  (EPZ)  Limited.   The  financial   information   for  these  three
non-guarantor  subsidiaries is included in the consolidated financial statements
of Carson South Africa.  Carson  Management  Company is a direct  majority-owned
subsidiary of the Company.




                                       8
<PAGE>

Consolidating Statement of Operations for the Three Months Ended March 31, 2000
<TABLE>
<CAPTION>
                                                    Carson, Inc.       Guarantor      Non-guarantor                    Consolidated
                                                        (parent)       subsidiary      subsidiaries     Eliminations    Carson, Inc.
                                                    --------------------------------------------------------------------------------
<S>                                                   <C>              <C>              <C>              <C>              <C>
Net sales                                             $      --        $  27,420        $  10,511        $      --        $  37,931
Cost of goods sold                                           --           13,509            5,704               --           19,213
                                                    --------------------------------------------------------------------------------
       Gross profit                                          --           13,911            4,807               --           18,718
Marketing and selling expenses                               --            7,130            3,086               --           10,216
General and administrative expenses                          --            5,792            1,697               --            7,489
                                                    --------------------------------------------------------------------------------
       Operating income                                      --              989               24               --            1,013
Other income (expense)                                       --           (4,665)             104               --           (4,561)
Equity in subsidiary earnings (net of taxes)             (3,564)              --               --            3,564               --
                                                    --------------------------------------------------------------------------------
       Income (loss)before income taxes and
            minority interest                            (3,564)          (3,676)             128            3,564           (3,548)
Income taxes                                                 --               --              (60)              --              (60)
                                                    --------------------------------------------------------------------------------
Income (loss) before minority interest                   (3,564)          (3,676)              68            3,564           (3,608)
Minority interest                                            --               --               44               --               44
                                                    --------------------------------------------------------------------------------
Net income (loss)                                     $  (3,564)       $  (3,676)       $     112        $   3,564        $  (3,564)
                                                    ================================================================================
</TABLE>


                                       9
<PAGE>


Consolidating Statement of Operations for the Three Months Ended March 31, 1999

<TABLE>
<CAPTION>
                                                     Carson, Inc.     Guarantor      Non-guarantor                    Consolidated
                                                         (parent)     subsidiaries    subsidiaries      Eliminations    Carson, Inc.
                                                   ---------------------------------------------------------------------------------
<S>                                                   <C>              <C>              <C>              <C>              <C>
Net sales                                             $       --       $  30,684        $  10,969        $      --        $  41,653
Cost of goods sold                                            --          14,441            5,444               --           19,885
                                                   ---------------------------------------------------------------------------------
       Gross profit                                           --          16,243            5,525               --           21,768
Marketing and selling expenses                                --           8,153            2,171               --           10,324
General and administrative expenses                           --           5,677            1,550               --            7,227
                                                   ---------------------------------------------------------------------------------
       Operating income                                       --           2,413            1,804               --            4,217
Other income (expense)                                        --          (4,062)             675               --           (3,387)
Equity in subsidiary earnings (net of taxes)                 180              --               --             (180)              --
                                                   ---------------------------------------------------------------------------------
       Income (loss) before income taxes and
             minority interest                               180          (1,649)           2,479             (180)             830
Income taxes                                                  --             611             (721)              --             (110)
                                                   ---------------------------------------------------------------------------------
       Income (loss) before minority interest                180          (1,038)           1,758             (180)             720
Minority interest                                             --              --             (540)              --             (540)
                                                   ---------------------------------------------------------------------------------
       Net income (loss)                              $      180       $  (1,038)       $   1,218        $    (180)       $     180
                                                   =================================================================================
</TABLE>



                                       10

<PAGE>


Consolidating Balance Sheet as of March 31, 2000
<TABLE>
<CAPTION>
                                               Carson, Inc.     Guarantor  Non-guarantor                Consolidated
                                                   (parent)    subsidiary   subsidiaries  Eliminations  Carson, Inc.
                                               ---------------------------------------------------------------------
<S>                                               <C>           <C>           <C>           <C>           <C>
Assets
Current assets:
    Cash                                          $    ----     $    ----     $   4,968     $    ----     $   4,968
    Accounts receivable, net                            646        21,236        13,212        (4,008)       31,086
    Inventories, net                                   ----        18,923         7,592          ----        26,515
    Investments                                        ----          ----         2,290          ----         2,290
    Other current assets                               ----           348           195          ----           543
Property, plant and equipment, net                     ----        28,208         8,509           (35)       36,682
Investments                                            ----          ----         3,054          ----         3,054
Intangible assets, net and other assets                ----       118,895        10,094          ----       128,989
Investment in subsidiary                             48,306        38,864          ----       (87,170)         ----
                                               ---------------------------------------------------------------------
Total assets                                      $  48,952     $ 226,474     $  49,914     $ (91,213)    $ 234,127
                                               =====================================================================

Liabilities and stockholders' equity
 Current liabilities:
    Accounts payable                              $    ----     $   4,511     $   7,077     $  (4,008)    $   7,580
    Other current liabilities                          ----        11,305         2,701          ----        14,006
Long-term debt                                         ----       140,962          ----          ----       140,962
Other liabilities                                        50        21,984           643          ----        22,677
Common stock and paid in capital                     81,653        28,616        42,831       (71,447)       81,653
Other equity accounts                               (10,979)      (18,127)      (13,394)       31,521       (10,979)
Retained earnings (Accumulated deficit)             (21,772)       37,223        10,056       (47,279)      (21,772)
                                               ---------------------------------------------------------------------
Total liabilities and stockholders' equity        $  48,952     $ 226,474     $  49,914     $ (91,213)    $ 234,127
                                               =====================================================================
</TABLE>


                                       11

<PAGE>


Consolidating Balance Sheet as of December 31, 1999
<TABLE>
<CAPTION>
                                               Carson, Inc.     Guarantor  Non-guarantor               Consolidated
                                                   (parent)    subsidiary  subsidiaries  Eliminations  Carson, Inc.
                                               ---------------------------------------------------------------------
<S>                                               <C>           <C>           <C>           <C>           <C>
Assets
Current assets:
    Cash                                          $    ----     $   3,395     $   5,345     $    ----     $   8,740
    Accounts receivable, net                            646        25,171        13,990        (4,348)       35,459
    Inventories, net                                   ----        19,433         8,899          ----        28,332
    Investments                                        ----          ----         2,435          ----         2,435
    Other current assets                               ----           268           239          ----           507
Property, plant and equipment, net                     ----        27,933         9,292           (35)       37,190
Investments                                            ----          ----         3,248          ----         3,248
Intangible assets, net and other assets                ----       120,165        10,572          ----       130,737
Investment in subsidiary                             53,273        41,413          ----       (94,686)         ----
                                               ---------------------------------------------------------------------
Total assets                                      $  53,919     $ 237,778     $  54,020     $ (99,069)    $ 246,648
                                               =====================================================================

Liabilities and stockholders' equity
Current liabilities:
    Accounts payable                              $    ----     $  12,794     $   7,927     $  (4,348)    $  16,373
    Other current liabilities                          ----        10,857         3,339          ----        14,196
Long-term debt                                         ----       138,314          ----          ----       138,314
Other liabilities                                        50        23,148           698          ----        23,896
Common stock and paid in capital                     81,653        28,616        42,831       (71,447)       81,653
Other equity accounts                                (9,576)      (16,728)      (11,075)       27,803        (9,576)
Retained earnings (Accumulated deficit)             (18,208)       40,777        10,300       (51,077)      (18,208)
                                               ---------------------------------------------------------------------
Total liabilities and stockholders' equity        $  53,919     $ 237,778     $  54,020     $ (99,069)    $ 246,648
                                               =====================================================================
</TABLE>


                                       12
<PAGE>


Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2000

<TABLE>
<CAPTION>
                                                  Carson, Inc.     Guarantor  Non-guarantor                   Consolidated
                                                      (parent)    subsidiary   subsidiaries    Eliminations    Carson, Inc.
                                               ----------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>            <C>            <C>
Operating Activities:
   Net income (loss)                                 $ (3,564)      $ (3,676)      $    112       $   3,564      $  (3,564)
   Adjustments to reconcile net income (loss)
   to net cash provided by (used in) operating
   activities:
      Depreciation and amortization                      ----          1,635            358            ----          1,993
      Interest deferred on secured term loan             ----          2,648           ----            ----          2,648
      Minority interest in earnings of
      subsidiary                                         ----           ----            (44)           ----            (44)
      Other, net                                        3,564            281            184          (3,564)           465
      Changes in operating assets and
      liabilities                                        ----         (3,728)          (382)           ----         (4,110)
                                               ----------------------------------------------------------------------------
         Total adjustments                              3,564            836            116          (3,564)           952
                                               ----------------------------------------------------------------------------
      Net cash provided by (used in )
      operating activities                               ----         (2,840)           228            ----         (2,612)
                                               ----------------------------------------------------------------------------
Investing Activities:
   Additions to property, plant and
   equipment                                             ----           (855)           (27)           ----           (882)
                                               ----------------------------------------------------------------------------
      Net cash used in investing activities              ----           (855)           (27)           ----           (882)
                                               ----------------------------------------------------------------------------
Financing Activities:
   Intercompany dividends                                ----            300           (300)           ----           ----
                                               ----------------------------------------------------------------------------
      Net cash provided by financing activities          ----            300           (300)           ----           ----
                                               ----------------------------------------------------------------------------
Effect of Exchange Rate Changes                          ----           ----           (278)           ----           (278)
                                               ----------------------------------------------------------------------------
Net decrease in Cash and Cash Equivalents                ----         (3,395)          (377)           ----         (3,772)
Cash and Cash Equivalents at Beginning of
Period                                                   ----          3,405          5,335            ----          8,740
                                               ----------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period           $   ----       $     10       $  4,958       $    ----      $   4,968
                                               ============================================================================
</TABLE>


                                       13
<PAGE>


Consolidating Statement of Cash Flows for the Three Months Ended March 31, 1999

<TABLE>
<CAPTION>

                                                  Carson, Inc.     Guarantor  Non-guarantor                   Consolidated
                                                      (parent)  subsidiaries   subsidiaries    Eliminations    Carson, Inc.
                                               ----------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>            <C>            <C>
Operating Activities:
   Net income (loss)                                 $    180       $ (1,039)      $  1,219       $    (180)     $     180
   Adjustments to reconcile net income (loss)
   to net cash provided by (used in) operating
   activities:
      Depreciation and amortization                      ----          1,439            320            ----          1,759
      Minority interest in earnings of
      subsidiary                                         ----           ----            540            ----            540
      Other, net                                         (180)           561            137             180            698
      Changes in operating assets and
      liabilities                                        ----         (5,247)          (574)           ----         (5,821)
                                               ----------------------------------------------------------------------------
         Total adjustments                               (180)        (3,247)           423             180         (2,824)
                                               ----------------------------------------------------------------------------
      Net cash provided by (used in )
      operating activities                               ----         (4,286)         1,642            ----         (2,644)
                                               ----------------------------------------------------------------------------
Investing Activities:
   Additions to property, plant and
   equipment                                             ----         (1,237)          (827)           ----         (2,064)
                                               ----------------------------------------------------------------------------
      Net cash used in investing activities              ----         (1,237)          (827)           ----         (2,064)
                                               ----------------------------------------------------------------------------
Financing Activities:
   Proceeds from long-term borrowings                    ----            805             92            ----            897
   Principal payments on debt                            ----           ----         (6,216)           ----         (6,216)
   Other                                                 ----            441           (499)           ----            (58)
                                               ----------------------------------------------------------------------------
      Net cash provided by financing activities          ----          1,246         (6,623)           ----         (5,377)
                                               ----------------------------------------------------------------------------
Effect of Exchange Rate Changes                          ----           ----           (743)           ----           (743)
                                               ----------------------------------------------------------------------------
Net increase in Cash and Cash Equivalents                ----         (4,277)        (6,551)           ----        (10,828)
Cash and Cash Equivalents at Beginning of
Period                                                   ----         12,320         16,386            ----         28,706
                                               ----------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period           $   ----       $  8,043       $  9,835       $    ----      $  17,878
                                               ============================================================================
</TABLE>


                                       14
<PAGE>


                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition

OVERVIEW

Forward-looking Statements

This report on Form 10-Q for the  quarter  ended March 31, 2000 as well as other
public documents of the Company contain forward-looking statements which involve
risks and uncertainties,  including (i) the proposed acquisition of the Company,
set forth in an Agreement  and Plan of Merger among the Company,  Cosmair,  Inc.
("Cosmair") and its wholly-owned subsidiary,  Crayon Acquisition Corp., pursuant
to which Cosmair, will acquire the Company in a two-step  transaction,  (ii) the
Company's  plans to introduce new products and product  enhancements,  (iii) the
Company's marketing, distribution and manufacturing expansion plans, (iv) future
financial  performance,   (v)  cash  flows  from  operations  and  (vi)  capital
expenditures.  The Company's  actual  results may differ  materially  from those
discussed  in such  forward-looking  statements.  When  used  herein  and in the
Company's future filings, the terms "expects", "plans", "intends",  "estimates",
"projects",  or  "anticipates"  or similar  expressions are intended to identify
forward-looking  statements (within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")).  Such statements reflect
the current  views of the Company with respect to future  events and are subject
to certain risks,  uncertainties  and  assumptions.  In addition to risk factors
that may be described in the Company's  filings with the Securities and Exchange
Commission  (the  "Commission"),  including  this filing,  actual  results could
differ materially from those expressed in any forward-looking statements made by
the  Company.  Additional  risk  factors  include,  but are not  limited to, the
following:  (a) the  Company's  success in  implementing  its  growth  strategy,
including its success in obtaining financing where required, (b) difficulties or
delays in developing and introducing new products or the failure of consumers to
accept new product  offerings,  (c) changes in consumer  preferences,  including
reduced consumer demand for the Company's current  products,  (d) the nature and
extent of future  competition in the Company's  principal  marketing  areas, (e)
political,  economic and demographic  developments in the United States, Africa,
Brazil, the Caribbean,  Europe and other countries where the Company now does or
in the future may do  business, (f)  failure to satisfy  the  conditions  to the
pending merger  transaction prior to the July 31, 2000 termination date, and (g)
the factors giving rise to the statements contained in the Independent Auditors'
Report on the Company's  financial  statements  for the year ended  December 31,
1999 included in the Company's  Annual Report on Form 10-K, which was filed with
the SEC on April 14, 2000 (as further described herein).  The Company assumes no
responsibility to update forward-looking information contained herein.

General

The Company is a  manufacturer  and marketer of hair care and shaving  products.
The majority of the Company's net sales are derived from five  categories of the
health and beauty aids market:  chemicals (hair relaxers and texturizers),  hair
color, men's depilatory products,  hair dress/conditioning and combout/oil sheen
products.


                                       15
<PAGE>


In the quarters ended March 31, 2000 and 1999, 31.7% and 29.5%, respectively, of
the net sales of the Company were to customers  outside the United  States.  The
following table presents the Company's net sales by geographic  region for these
periods:

                            Quarter Ended      % of     Quarter Ended      % of
                            March 31,1999     Total     March 31,1998     Total

     ---------------------------------------------------------------------------
     Net sales to:
     United States               $ 25,906      68.3%         $ 28,968      69.5%
     South Africa                   8,864      23.4             8,608      20.7
     Europe                         1,647       4.3             2,360       5.7
     Other International            1,514       4.0             1,717       4.1
     ---------------------------------------------------------------------------
     Total                       $ 37,931     100.0%         $ 41,653     100.0%


Most of the  Company's  sales are recorded in United  States  Dollars.  However,
sales by Carson South Africa to South  Africa,  Botswana,  Lesotho,  Namibia and
Swaziland  are  denominated  in South  African  Rand,  and sales by Carson South
Africa's  subsidiary in Ghana ("Carson Ghana") are denominated in Ghanian Cedis.
The Company is therefore  exposed to foreign currency price risk as the exchange
rates of the rand and the cedi fluctuate,  and there is a potential for gains or
losses on the consolidated level. The Company does not view the exposure to rand
exchange rate  fluctuations  as  significant  because Carson South Africa incurs
most of its costs in rand.  Assets and  liabilities  of Carson  South Africa are
translated for consolidation purposes from South African Rand into United States
Dollars  at the  rate of  currency  exchange  at the end of the  fiscal  period.
Revenues and expenses are  translated  at average  monthly  prevailing  exchange
rates.  Resulting  translation  differences  are  recognized  as a component  of
stockholders'  equity.  Gains and losses from foreign currency  transactions are
included in other income in the consolidated statement of operations.

Results of Operations

Quarter Ended March 31, 2000 Compared to Quarter Ended March 31, 1999

Net Sales.  Consolidated  net sales for the  quarter  ended  March 31, 2000 were
$37.9  million,  a decrease  of $3.7  million,  or 8.9%,  from net sales for the
quarter  ended March 31, 1999 of $41.7  million.  This decrease is summarized as
follows (dollars are in thousands):

                                Quarter Ended       Quarter Ended
                               March 31, 2000      March 31, 1999      % Change
                             ---------------------------------------------------
Domestic Hair Care                   $ 20,476            $ 24,921        (17.8)
Export                                  3,161               4,078        (22.5)
Dermablend Group                        5,430               4,046         34.2
South Africa                            8,864               8,608          3.0
                             -------------------------------------
   Consolidated                      $ 37,931            $ 41,653         (8.9)
                             =====================================


                                       16
<PAGE>


Domestic hair care net sales above include  domestic sales of Carson and Johnson
hair care products.  Carson products include the principal brands Dark & Lovely,
Excelle,  Beautiful  Beginnings,  Dark & Natural,  Magic and Let's Jam.  Johnson
products   include  the  principal   brands  Gentle   Treatment,   Ultra  Sheen,
Sta-Sof-Fro,  Ultra Star,  Classy Curl and Curly Perm. Export includes net sales
of Carson and  Johnson  hair care  products  in Europe  and other  international
markets,  excluding  Africa.  Dermablend  Group  net  sales  includes  sales  of
Dermablend corrective cosmetics, Posner cosmetics and Dark and Lovely Cosmetics.

Domestic  net sales of Carson  brands  decreased  to $11.0  million in the first
quarter of 2000 from $15.3  million in the first  quarter of 1999.  Domestic net
sales of Carson relaxers, hair colors, maintenance products and shaving products
were down  compared to the first  quarter of 1999.  The decrease in relaxers and
hair  colors  includes  a  charge  of $1.6  million  to net  sales  in 2000  for
anticipated  returns of Dark and Lovely relaxers and hair colors  resulting from
the relaunch of these products.

Domestic  net sales of Johnson  brands  decreased  to $9.4  million in the first
quarter  of 2000 from $9.7  million in the first  quarter of 1999.  Net sales of
Johnson  relaxers were down slightly  while net sales of Johnson hair colors and
maintenance products were up.

Export net sales were down in the first  quarter of 2000  compared  to the first
quarter of 1999 primarily due to decreased sales of Carson brands in Europe.

Net sales of the Dermablend  Group  increased 34.2% to $5.4 million in the first
quarter of 2000  compared  to $4.0  million in the first  quarter of 1999 due to
higher net sales of Dermablend and Posner cosmetics.

Net sales in South Africa increased 3.0% to $8.9 million in the first quarter of
2000 compared to the first quarter of 1999.

Gross Profit.  Consolidated  gross profit was $18.7 million in the quarter ended
March 31, 2000  compared to $21.8 million in the quarter ended March 31, 1999, a
decrease of $3.1 million,  or 14.0%.  Gross margin was 49.4% in 2000 compared to
52.3% in 1999.  This  decrease was  primarily  attributable  to the $1.6 million
charge to net sales recorded in 2000 for anticipated returns of relaxer and hair
color  products  resulting  from the relaunch.  In addition,  gross margins were
somewhat lower in South Africa and the Dermablend Group, due primarily to higher
product costs.

Marketing  and  Selling  Expenses.  Marketing  and  selling  expenses  decreased
slightly $10.2 million in the quarter ended March 31, 2000 from $10.3 million in
the quarter ended March 31, 1999.  This change  consists of reduced  spending on
domestic  hair care products  offset by higher  spending in South Africa and the
Dermablend  Group. As a percentage of net sales,  marketing and selling expenses
increased to 26.9% during 2000 from 24.8% during 1999.

General and Administrative  Expense.  General and  administrative  expenses were
$7.5  million for the first  quarter of 2000  compared  to $7.2  million for the
first  quarter of 1999,  an  increase of $0.3  million,  or 3.6%.  The  increase
resulted primarily from higher  depreciation and computer expenses and also $0.1
million of fees  associated  with the  proposed  acquisition  of the  Company by
L'Oreal.  As a  percentage  of net sales,  general and  administrative  expenses


                                       17
<PAGE>


increased to 40.0% during 2000 from 17.4% during 1999. This percentage  increase
is primarily  due to the $1.6 million  charged to net sales in 2000 for Dark and
Lovely  relaxer and hair color  returns as well as overall  reduced net sales in
2000 of Carson products.

Operating Income.  As a result of the above changes,  operating income decreased
to $1.0  million in the quarter  ended  March 31, 2000 from $4.2  million in the
quarter ended March 31, 1999.

Interest  Expense.  Interest  expense  increased  to $4.8 million in the quarter
ended March 31, 2000 from $4.3 million in the quarter ended March 31, 1999.  The
increased  interest expense was the result of increased debt and higher interest
rates in the first quarter of 2000  compared to the first  quarter of 1999.  The
Company deferred interest payments on its secured term loan in January, February
and March of 2000 and  therefore  paid an annual  interest rate of 16% for these
months compared to an annual rate of 13% for the first quarter of 1999, when all
interest  was paid in cash  monthly.  In addition,  throughout  1999 the Company
deferred the monthly  interest  payment on this debt six times,  thereby  adding
$5.0 million to the outstanding principal balance.

Other Income. Other income decreased to $0.3 million for the quarter ended March
31, 2000 from $0.9 million for the quarter  ended March 31,  1999.  The decrease
was primarily due to lower interest income on cash balances in South Africa.

Provision for Taxes.  The provision for income taxes decreased to $60,000 in the
quarter ended March 31, 2000 compared to $110,000 in the quarter ended March 31,
1999.  These tax  provisions  were  calculated  on the earnings of the Company's
foreign  subsidiaries.  The Company did not record tax benefits,  or the related
deferred tax assets, on losses incurred by its domestic subsidiaries.

Liquidity and Capital Resources

In the first  quarter  of 2000 the  Company's  cash  balance  decreased  by $3.8
million,  to $5.0  million at March 31, 2000 from $8.7  million at December  31,
1999. Net cash flow used in operations was $2.6 million. Cash was used primarily
to  decrease  accounts  payable,  including a $2.0  million  payment to settle a
dispute  with AM  Cosmetics.  Cash  was  provided  by  collections  of  accounts
receivable and reductions of inventories.

Net cash used in investing  activities in the first quarter of 2000 consisted of
capital  expenditures  of  $0.9  million.  These  capital  expenditures  related
primarily to improvements at the Company's production  facilities in Chicago and
Savannah.

The cash balance was adversely impacted in 2000 by continued  devaluation of the
South African Rand.  The rand devalued  approximately  6.3%,  from 6.16 rand per
dollar at December  31, 1999 to 6.55 rand per dollar at March 31,  2000.  Due to
this  devaluation,  the cash  balances  held in South  Africa  decreased by $0.3
million when converted to U.S. dollars.

As discussed  earlier,  the Company deferred the monthly interest payment on its
Secured  Term Loan six  times in 1999 and  thereby  added  $5.0  million  to the
principal  balance.  The Company  deferred the monthly  interest  payment  three
additional  times in 2000 (and can defer such  monthly  interest  payments up to
three more times during the remainder of 2000) and added another $2.6 million to
the outstanding  principal balance of the Secured Term Loan, which totaled $68.0
million at March 31, 2000.


                                       18
<PAGE>


On May 1, 2000,  the  Company  paid  approximately  $4.5  million  of  interest,
including a $3.8 million semi-annual  interest payment on the subordinated notes
and a $0.7  million  monthly  interest  payment on the  Secured  Term Loan.  The
Company paid these interest payments from cash provided by operations.

Current  operating  budgets and cash flow projections  indicate that the Company
will build cash throughout the second half of 2000. However,  these earnings and
cash  flow   projections  are  based  upon  the  successful   launches  of  new,
reformulated  or  repackaged  products  and  the  achievement  of  sales  levels
substantially  higher than  historical  sales  levels.  As a result,  management
cannot be certain it will have  sufficient  cash resources to meet its long-term
debt repayment  requirements.  Failure to meet debt repayment requirements would
result in the Company being in default of its loan covenants,  in which case the
Company's long-term debt would become immediately due and payable.

The Independent  Auditors' Report on the Company's financial  statements for the
year ended  December 31, 1999  included in the  Company's  Annual Report on Form
10-K,  which was filed with the SEC on April 14,  2000,  contained  a  paragraph
which indicated  substantial  doubt about the Company's ability to continue as a
going concern.


                                       19
<PAGE>


                                  CARSON, INC.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is party to lawsuits  incidental  to its  business.  Management
believes that the ultimate  resolution of these matters will not have a material
adverse  impact on the business or financial  condition  and  operations  of the
Company.

Item 2.  Changes in Securities

     None.

Item 3.  Defaults upon Senior Securities

     None.

Item 4.  Submission of Matters to a Vote of Security Holders

      None.

Item 5.  Other Information

     None.


Item 6.  Exhibits and Reports on Form 8-K

(a)    Exhibits --

     27                  Financial data schedule.


(b)    Reports on Form 8-K --

     None.



                                       20
<PAGE>




                                   SIGNATURES

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

CARSON, INC.





/s/ Robert W. Pierce                                         Date: May 15 , 2000
Robert W. Pierce
Executive Vice President, Finance
Chief Financial Officer and Corporate Secretary
(Principal Accounting and Financial Officer)



                                       21
<PAGE>