<PAGE>   1


================================================================================






                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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, 2001


                        Commission File Number: 333-10611

                               UNIFRAX CORPORATION
             (Exact name of registrant as specified in its charter)


         Delaware                                         34-1535916
(State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation)

               2351 Whirlpool Street, Niagara Falls, NY 14305-2413
               (Address of principal executive offices) (Zip Code)
       Registrant's telephone number, including area code: (716) 278-3800

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




     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
                                             ---    ---









================================================================================




<PAGE>   2



                               UNIFRAX CORPORATION
                                    FORM 10-Q
                                      INDEX

                                                                        Page No.
                                                                        --------

PART I.      FINANCIAL INFORMATION

Item 1.      Condensed Consolidated Financial Statements (Unaudited)

             Condensed Consolidated Balance Sheets at
                  December 31, 2000 and March 31, 2001........................1

             Condensed Consolidated Statements of Income for the
                  Three-month periods ended March 31, 2000 and 2001...........2

             Condensed Consolidated Statements of Cash Flow for the
                  Three-month periods ended March 31, 2000 and 2001...........3

             Notes to Condensed Consolidated Financial Statements.............4

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations...................10

Item 3.      Qualitative and Quantitative Disclosure About Market Risk.......12

PART II.     OTHER INFORMATION

Item 1.      Legal Proceedings...............................................13
Item 2.      Changes in Securities and Use of Proceeds.......................13
Item 3.      Defaults on Senior Securities   ................................13
Item 4.      Submission of Matters to a Vote of Security Holders ............13
Item 5.      Other Information...............................................13
Item 6.      Exhibits and Reports on Form 8-K................................13

Signatures...................................................................14




<PAGE>   3





PART I.   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
                               UNIFRAX CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (UNAUDITED - IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                                       DECEMBER 31     MARCH 31
                                                                                       -----------     --------
                                                                                          2000           2001
                                                                                        ---------      ---------

<S>                                                                                     <C>            <C>
ASSETS
Current assets:
Cash                                                                                    $   2,649      $   2,455
Marketable securities and investments                                                         200            272
Accounts receivable, trade, less allowance of $1,977 and $1,636, respectively              37,068         35,114
Accounts receivable, Saint-Gobain                                                          10,091         10,568
Inventories                                                                                17,134         17,111
Deferred income taxes                                                                       2,114          2,086
Prepaid expenses and other current assets                                                     691          1,220
                                                                                        ---------      ---------
Total current assets                                                                       69,947         68,826

Property, plant and equipment, at cost                                                    117,163        116,079
   Less accumulated depreciation and amortization                                         (45,812)       (48,119)
                                                                                        ---------      ---------
                                                                                           71,351         67,960

Deferred income taxes                                                                      17,288         17,038
Financing costs, net of accumulated amortization of $2,358 and $2,797, respectively         3,009          2,740
Marketable securities and investments                                                         591            825
Other assets                                                                                  346            330
                                                                                        ---------      ---------
                                                                                        $ 162,532      $ 157,719
                                                                                        =========      =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt                                                       $   8,880      $   6,456
Accounts payable                                                                           11,497          9,732
Accrued liabilities                                                                        18,200         19,628
                                                                                        ---------      ---------
Total current liabilities                                                                  38,577         35,816

Long-term debt                                                                            126,023        123,636
Accrued postretirement benefit cost                                                         3,491          3,522
Other long-term obligations                                                                 1,037          1,000
Deferred income taxes                                                                       1,573          1,516

Minority interest                                                                             887            851

STOCKHOLDERS' DEFICIT
Common stock--$0.01 par value; 40,000 shares authorized;
  20,000 shares issued and outstanding                                                          -              -
Redeemable cumulative Series A preferred stock--$0.01 par value;
  non-voting; 30,000 shares authorized; 20,500 shares issued and outstanding                    -              -
Redeemable convertible cumulative Series B preferred stock--$0.01 par value;
  voting; 10,000 shares authorized; 1,667 shares issued and outstanding
   (aggregate liquidation preference of $2,986 and $3,024, respectively,
   including dividends in arrears)                                                              -              -
Additional paid-in capital                                                                 63,020         63,020
Accumulated deficit                                                                       (72,290)       (69,994)
Accumulated other comprehensive income (loss) - cumulative foreign
  currency translation adjustment                                                             214         (1,648)
                                                                                        ---------      ---------
                                                                                           (9,056)        (8,622)
                                                                                        ---------      ---------
                                                                                        $ 162,532      $ 157,719
                                                                                        =========      =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                        1

<PAGE>   4



                               UNIFRAX CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                           (UNAUDITED - IN THOUSANDS)



                                          THREE MONTHS ENDED MARCH 31
                                          ---------------------------
                                              2000          2001
                                            --------      --------


Net sales                                   $ 23,994      $ 43,620


Cost of goods sold                            11,336        22,799
                                            --------      --------
Gross profit                                  12,658        20,821

Selling, general and
   administration expenses                     6,423        12,829
                                            --------      --------
Operating income                               6,235         7,992

Other income (expense), net                       (6)         (121)
                                            --------      --------
Income before interest, income taxes
  and minority interest                        6,229         7,871

Interest expense                              (2,668)       (3,549)
                                            --------      --------
Income before income taxes and minority
  interest                                     3,561         4,322

Provision for income taxes                     1,237         1,501
                                            --------      --------
Income before minority interest                2,324         2,821

Minority interest                                  -            57
                                            --------      --------
Net Income                                  $  2,324      $  2,764
                                            ========      ========




See accompanying notes to condensed consolidated financial statements.





                                        2

<PAGE>   5



                               UNIFRAX CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (UNAUDITED - IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED MARCH 31
                                                                   ---------------------------
                                                                       2000          2001
                                                                      -------      -------
<S>                                                                   <C>          <C>
OPERATING ACTIVITIES
Net income                                                            $ 2,324      $ 2,764

Depreciation and amortization                                           1,301        2,778
Other adjustments and changes in operating assets and liabilities       2,363         (483)
                                                                      -------      -------
Cash provided by operating activities                                   5,988        5,059

INVESTING ACTIVITIES
Capital expenditures                                                   (1,851)        (756)
Other                                                                      13         (638)
                                                                      -------      -------
Cash used in investing activities                                      (1,838)      (1,394)

FINANCING ACTIVITIES
Dividend paid                                                               -         (468)
Borrowings under revolving loan                                         7,000        4,000
Repayments of revolving loan                                           (8,900)      (6,353)
Repayment of term loan                                                 (2,250)      (1,038)
                                                                      -------      -------
Cash used in financing activities                                      (4,150)      (3,859)
                                                                      -------      -------

Net change in cash                                                          -         (194)
Cash--beginning of period                                                   -        2,649
                                                                      -------      -------
Cash--end of period                                             $           -      $ 2,455
                                                                      =======      =======
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                        3

<PAGE>   6



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
Unifrax Corporation ("The Company" or "Unifrax") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation have
been included. Results for the period ended March 31, 2001, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2001. For further information, refer to the consolidated financial statements
and the notes thereto for the year ended December 31, 2000, included in the
Company's annual report on Form 10-K filed with the Securities and Exchange
Commission. All capitalized terms used in these notes to condensed consolidated
financial statements that are not defined herein have the meanings given to them
in such consolidated financial statements and notes to consolidated financial
statements.

NOTE B - BUSINESS ACQUISITION

On October 4, 2000, the Company acquired the capital stock of certain companies
and certain assets of other companies that comprised the high performance
insulating ceramic fibers business (the "Ceramic Fiber Business") of
Saint-Gobain (the "Acquisition"). The Ceramic Fiber Business is engaged in the
manufacture, cutting, processing and/or sale of insulating fibers operating in a
temperature regime of 1000 degrees (Celsius) or higher.

The Acquisition has been accounted for under the purchase method of accounting,
and the results of operations of the Ceramic Fiber Business have been included
in the consolidated statements of operations since the date of acquisition. The
initial purchase price of $58,500,000 has been allocated to the assets acquired
and liabilities assumed based upon their estimated fair values. This allocation,
however, is subject to adjustment based upon the final purchase price
adjustment, which is pending.

The following unaudited pro forma information presents the results of operations
of the Company as if the Acquisition had taken place at January 1, 2000. These
pro forma results of operations have been prepared for comparative purposes only
and do not purport to be indicative of the results of operations which actually
would have resulted had the Acquisition occurred on the date indicated, or which
may result in the future.

                                         Three months ended
                                         ------------------
                                           March 31, 2000
                                           --------------
                                           (In thousands)

Net sales                                     $ 43,115
Net income                                       2,700

In addition, on January 27, 2001, the Company acquired a further 83,350 fully
paid up equity shares of Orient Cerlane Ltd. for approximately $433,000,
including related expenses, increasing its ownership to 63.13%


                                        4

<PAGE>   7



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE C - INVENTORIES

The components of inventory consist of the following (in thousands):

                                                    December 31      March 31
                                                       2000            2001
                                                     -------         -------

                  Raw materials and supplies         $ 5,662         $ 6,585
                  Work in process                      1,187           1,405
                  Finished products                    9,802           8,273
                                                     -------         -------
                                                      16,651          16,263

                  Adjustment to LIFO Cost                483             848
                                                     -------         -------
                                                     $17,134         $17,111
                                                     =======         =======



NOTE D - CONTINGENCIES

CERAMIC FIBERS

Regulatory agencies and others, including the Company, are currently conducting
scientific research and employee monitoring to determine the potential health
impact resulting from the inhalation of airborne ceramic fibers. To date,
studies of workers with occupational exposure to airborne ceramic fiber have
found no clinically significant relationship between prior or current exposure
to ceramic fiber and disease in humans; however, independent animal studies have
indicated that ceramic fiber inhaled by test animals at elevated doses can
produce respiratory disease, including cancer. The results of this research have
been inconclusive as to whether or not ceramic fiber exposure presents an
unreasonable risk to humans.

From time to time Unifrax and other manufacturers of ceramic fibers have been
named as defendants in lawsuits alleging death or personal injury or worker's
compensation claims as a result of exposure in the manufacture and handling of
ceramic fiber and other products. The amount of any liability that might
ultimately exist with respect to these claims or any other unasserted claims is
presently not determinable. The Company believes the lawsuits brought against it
have been without merit and the litigation currently pending, or to its
knowledge threatened, will not have a material adverse effect on the financial
condition or results of operations of the Company. The Company's belief is based
on the fact that, although animal studies have indicated that ceramic fiber
inhaled by test animals at elevated doses can cause disease, there is no
evidence that exposure to refractory ceramic fiber has resulted in disease in
humans.

Consistent with customary practice among manufacturers of ceramic fiber
products, the Company has entered into agreements with distributors of its
product in the United States whereby it agreed to indemnify the U.S.
distributors against losses resulting from ceramic fiber claims and the costs to
defend against such claims. To the best of the Company's knowledge, there have
been no historical, nor are there any current, ceramic fiber exposure claims
made against these indemnification agreements. Consequently, the amount of any
liability that might ultimately exist with respect to these indemnities is
presently not determinable.


                                        5

<PAGE>   8



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

Pursuant to the Recapitalization Agreement, BP America Inc. and certain of its
affiliates (collectively "BP America"), have agreed to indemnify the Company
against liabilities for personal injury and wrongful death attributable to
exposure which occurred prior to October 30, 1996 (the "BP Closing") to
refractory ceramic fibers manufactured by the Company. BP America has agreed to
indemnify the Company against all liabilities arising from exposure claims
pending at the time of the BP Closing. For all other claims arising from alleged
exposure occurring solely prior to the BP Closing, BP America has agreed to
indemnify the Company against 80% of all losses, until the total loss which the
Company incurs reaches $3.0 million, after which time BP America has agreed to
indemnify the Company against 100% of such losses. BP America has agreed to
indemnify the Company against all punitive damages attributable to the conduct
of the Company prior to the BP Closing. Where losses arise from alleged exposure
both before and after closing, the losses will be allocated between BP America
and the Company, pro rata, based on the length of exposure or pursuant to
arbitration if initiated by the Company. To date the Company has incurred no
claims losses applicable to the $3.0 million total mentioned above.

The Company cannot avail itself of this indemnity for losses attributable to the
Company's failure to maintain a Product Stewardship Program consistent with the
program maintained by the Company prior to the BP Closing, as modified in a
commercially reasonable manner in accordance with changing regulatory,
scientific and technical factors. BP shall not indemnify the Company with
respect to any liabilities for wrongful death or personal injury to the extent
caused by the failure of the Company to maintain a Product Stewardship Program
consistent with that maintained by the Company prior to the BP Closing. In the
Company's opinion, the Product Stewardship Program has been maintained in a
manner consistent with these requirements. Unifrax intends to defend ceramic
fiber claims vigorously.

Pursuant to a Warranty Agreement executed in conjunction with the Acquisition,
SEPR agreed to indemnify the Company, subject to certain maximums as established
in the Warranty Agreement, against losses resulting from alleged or actual
exposure to ceramic fibers which occurred prior to October 4, 2000 (the "SEPR
Closing"). Where losses arise from alleged exposure both before and after the
SEPR Closing, the losses will be determined pro rata, temporis.

ENVIRONMENTAL MATTERS

The Company is subject to loss contingencies pursuant to various federal, state
and local environmental laws and regulations and is currently involved in
several actions regarding the clean-up of disposal sites alleged to contain
hazardous and/or toxic wastes generated over a number of years. These include
possible obligations to remove or mitigate the effects on the environment of the
placement, storage, disposal or release of certain chemical or petroleum
substances by the Company or by other parties. In addition, The Carborundum
Company has entered into a Consent Decree with the New York State Department of
Environmental Conservation to remediate contamination at the facility located in
Sanborn, New York. While the Company's ultimate clean-up liability at the
various sites is not presently determinable, the Company does not expect to
incur any material liability with respect to any of these sites, individually or
in the aggregate, as a result of its activities at these sites. Furthermore, BP
America has agreed to indemnify the Company for certain environmental
liabilities, which might ultimately exist, under the Recapitalization Agreement.
In addition, BP America has assumed liability for other potential off-site
clean-up obligations associated with Carborundum. The locations at which the
Company has maintained potential off-site liability in the U.S. and the
Carborundum Sanborn, New York facility are described below.


                                        6

<PAGE>   9



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

         Kline Trail Site. In 1984, the Company voluntarily advised the State of
Indiana of potential unauthorized disposal of waste at an Indiana site by a
transporter. No response from the state has been received, and no further
information about the potential for remediation costs at the site has been
received by the Company. It is expected that little or no liability will be
associated with this site.

         PCB Inc., Site. The New Carlisle, Indiana, facility received a request
for information from the EPA in 1994 concerning potential responsibility for
cleanup of the PCB Treatment site located in Kansas City, Kansas and Kansas
City, Missouri. Records indicate that a number of capacitors from the New
Carlisle facility of the Company were sent to the PCB Treatment site. A response
documenting the timely destruction of those materials was submitted to the EPA.
In September 1997 the EPA contacted BP America via letter to verify that a total
of 10,900 pounds of capacitors and transformers had been sent to the site by BP
America/Carborundum. No additional information on clean-up timing or cost has
since been received. Based on the total pounds delivered by all parties to the
site, the liability, if any, ultimately attributable to BP America or the
Company is not expected to have a material adverse effect on the Company's
financial position.

         Shulman Site. The Company has potential liability with respect to the
Shulman site in St. Joseph County, Indiana. The site is a landfill which the
Company believes to have been contaminated by chemicals migrating from an
adjacent facility. Plant trash from the New Carlisle facility was hauled to the
site. An agreement has been reached pursuant to which the Company, as part of a
response group, agreed to assume approximately 5% of certain response costs,
which to date includes $1.7 million for installation of a water line. The
Company's share of that cost is less than $100,000. The owner of the adjacent
facility has assumed the bulk of site remediation costs to date. It is
anticipated that site remediation will ultimately involve installing a clay cap
over the site, the cost of which is not yet known.

         Sanborn Site. Under the terms of an agreement with BP America, Unifrax
leases a portion of the present manufacturing facilities on this site. The
Carborundum Company's Sanborn, New York site was used by a number of former
Carborundum operations. Testing in the area has found that contamination by
volatile organic compounds is present in the soil and groundwater. Neither past
nor current operations of Unifrax are believed to have contributed to, or to be
contributing to, the existence of this contamination. While The Carborundum
Company entered into a Consent Decree with the State of New York under which it
was to conduct remedial activities at the site, BP America has taken title to
and assumed liability for the remediation of this property as of October 30,
1996. Efforts to remediate the site, chiefly by means of soil vapor extraction,
are expected to continue for some time.

         Under the terms of the Recapitalization Agreement, BP America assumed
liability, and the rights to recovery from third parties, for environmental
remediation and other similar required actions with respect to certain
environmental obligations of Unifrax including the above, which existed as of
the BP Closing.

         Pursuant to the Warranty Agreement executed in conjunction with the
sale of its ceramic fiber business to Unifrax, SEPR also agreed to indemnify the
Company against certain environmental liabilities related to activities
conducted at the various acquired sites prior to the SEPR Closing, subject to
certain maximums as established in the Warranty Agreement.




                                        7

<PAGE>   10



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

         The Company may, in the future, be involved in further environmental
assessments or clean-ups. While the ultimate requirement for any such
remediation, and its cost, is presently not known, and while the amount of any
future costs could be material to the results of operations in the period in
which they are recognized, the Company does not expect these costs, based upon
currently known information and existing requirements, will have a material
adverse effect on its financial position.

LEGAL PROCEEDINGS

In addition to the ceramic fiber and environmental matters discussed above,
BP/Carborundum and Unifrax are involved in litigation relating to various claims
arising out of their operations in the normal course of business, including
product liability claims. While the outcomes of this litigation could be
material to the results of operations in the period recognized, based on the
current claims asserted the management of the Company believes that the ultimate
liability, if any, resulting from such matters will not have a material adverse
effect on the Company's financial position.

The Carborundum Company has been named in numerous legal claims alleging pre-BP
Closing asbestos exposure. None of the current or past Unifrax-related products
are asbestos-containing materials, as defined by OSHA (29CFR1900.1001(b)). For
these claims related to pre-BP Closing Carborundum Company matters, BP America
has responsibility under the Recapitalization Agreement and is managing the
claims directly.

Also, SEPR has indemnified Unifrax for any future asbestos claims which may
arise related to alleged pre-SEPR Closing asbestos exposures associated with
products or sites sold by SEPR to Unifrax.

NOTE E - COMPREHENSIVE INCOME

Comprehensive income for the three-month periods ended March 31, 2000 and 2001
consisted of the following (in thousands):

                                                       2000         2001
                                                       ----         ----
                  Net income                         $ 2,324      $ 2,764
                  Change in foreign currency
                      translation adjustment             (40)      (1,862)
                                                     -------      -------
                  Comprehensive income               $ 2,284      $   902
                                                     =======      =======


NOTE F - INTEREST RATE SWAP AGREEMENT

Effective October 1, 1999, the company entered into interest rate swap
agreements to effectively convert fixed- rate debt with a notional principal
amount of $25,000,000 to variable-rate debt. Under the agreements the Company
receives from, or pays to, the banks an amount computed as the difference
between interest based upon a fixed rate of 6.2% per annum, and interest based
upon the established LIBOR rate, which at March 31, 2001 was 5.3%.





                                        8

<PAGE>   11



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001


NOTE G - EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

Financial Accounting Standards Board Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities (Statement 133), requires
companies to recognize all of their derivative instruments as either assets or
liabilities in the statement of financial position at fair value. The accounting
for changes in the fair value (i.e., gains or losses) of a derivative instrument
depends on whether it has been designated and qualifies as part of a hedging
relationship and further, on the type of hedging relationship. For those
derivative instruments that are designated and qualify as hedging instruments, a
company must designate the hedging instrument, based upon the exposure being
hedged, as either a fair value hedge, cash flow hedge or a hedge of a net
investment in a foreign operation.

For derivative instruments that are designated and qualify as a fair value hedge
(i.e., hedging the exposure to changes in the fair value of an asset or a
liability or an identified portion thereof that is attributable to a particular
risk), the gain or loss on the derivative instrument as well as the offsetting
loss or gain on the hedged item attributable to the hedged risk are recognized
in current earnings during the period of the change in fair values.

The Company has entered into an interest rate swap agreement for interest rate
risk exposure management purposes. The interest rate swap agreement utilized by
the Company effectively modifies the Company's exposure to interest risk by
converting $25,000,000 of the Company's fixed-rate debt to floating rate debt.
This agreement involves an exchange of the obligation to make fixed rate
interest payments for the obligation to make floating rate interest payments
over the life of the agreement without an exchange of the underlying principal
amount. As a result of adoption of Statement 133 as of January 1, 2001, the
Company recognized the fair value of the interest rate swap agreement as a
current asset, and increased the balance of its long term debt to fair value by
the amount of $186,000, respectively.


NOTE H - STOCKHOLDERS EQUITY

SERIES A PREFERRED STOCK

On January 20, 2001, the Company declared and paid a dividend on its Redeemable
cumulative Series A preferred stock of $22.822 per share on 20,500 shares, for a
total of $467,849.














                                        9

<PAGE>   12




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD LOOKING STATEMENTS

Statements included in this Management Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this document that do not
relate to present or historical conditions are "forward looking statements"
within the meaning of that term in Section 27A of the Securities Act of 1933, as
amended, and of Section 21F of the Securities Exchange Act of 1934, as amended.
Forward looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe," "anticipate," "expect,"
"estimate," "project," "will continue," "will result," or words or phrases of
similar meaning. Additional oral or written forward looking statements may be
made by the Company from time to time, and such statements may be included in
documents filed with the Securities and Exchange Commission. Such forward
looking statements involve risks and uncertainties which could cause results or
outcomes to differ materially from those expressed in such forward looking
statements. Among the important factors on which such statements are based are
assumptions concerning the continuing strength of the ceramic fiber market on
which the Company is substantially dependent, changing prices for ceramic fiber
products, acceptance of new products, the status of health and safety issues
affecting the ceramic fiber industry in general and the Company in particular,
the Company's continuing ability to operate under the restrictions imposed by
the substantial indebtedness which it is subject to, the risks associated with
international operations, foreign laws, and with transactions in foreign
currencies, risks associated with the impact of environmental regulations on the
Company's operations and property and related governmental regulations, and the
continuing availability of certain raw materials, including vermiculite which is
purchased from an overseas source.

THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2000

Net Sales in the first quarter of 2001 increased by $19.6 million or 81.8% from
$24.0 million in 2000 to $43.6 million in 2001. Sales for the first quarter of
2001 included the addition of the Saint-Gobain worldwide ceramic fiber business
which was acquired by Unifrax in October 2000 (the "Acquisition"). Sales in the
quarter reflect flat or weaker volume year-over-year in some traditional
furnace-related markets and in porosity-controlled products for automotive
airbag systems.

Gross Profit increased by $8.2 million or 64.5% from $12.6 million in 2000 to
$20.8 million in 2001. Gross Profit as a percentage of net sales decreased from
52.8% in 2000 to 47.7% in 2001. The increase in gross profit was due to the
higher sales volume related to the Acquisition. The lower overall gross profit
percentage of net sales reflects the effect of lower gross margins in some of
the recently-acquired businesses, and slightly weaker margins in North America.

Selling, general, and administrative expenses increased by $6.4 million or 99.7%
from $6.4 million in 2000 to $12.8 million in 2001. SG&A expenses for the first
quarter of 2001 included the addition of the Saint-Gobain worldwide ceramic
fiber business acquired by Unifrax in October 2000. SG&A expenses were also
higher due to additional depreciation and amortization costs associated with the
Acquisition and higher third party professional services and product stewardship
expenses. Selling, general, and administrative expenses as a percentage of net
sales increased from 26.8% in 2000 to 29.4% in 2001.

Operating income increased by $1.7 million or 26.4% from $6.2 million in 2000 to
$7.9 million in 2001, as a result of the factors previously indicated. Operating
income as a percentage of net sales decreased from 26.0% in 2000 to 18.0% in
2001.

Interest expense increased by $0.9 million or 33.0% from $2.7 million in 2000 to
$3.6 million in 2001 due

                                       10

<PAGE>   13



primarily to the additional debt associated with the acquisition of the
Saint-Gobain ceramic fiber business. Interest expense decreased as a percentage
of net sales from 11.1% in 2000 to 8.1% in 2001.

Provision for income taxes increased by $0.3 million or 21.3% from $1.2 million
on 2000 to $1.5 million in 2001. The effective income tax rate remained constant
at 34.7% in both 2000 and 2001.

Net income increased by $0.5 million or 18.9% from $2.3 million in 2000 to $2.8
million in 2001, as a result of the factors previously indicated. Net income as
a percentage of net sales decreased from 9.7% in 2000 to 6.3% in 2001.

LIQUIDITY AND CAPITAL RESOURCES

During the three-month period ended March 31, 2001, the Company's cash flows
from operating activities decreased by $1.4 million or 23.3%, from $6.0 million
in 2000 to $4.6 million in 2001. This decrease was primarily the result of
increased working capital requirements offset partially by higher net income and
increased depreciation and amortization.

Cash used by investing activities reduced by $0.4 million, or 24.2%, from $1.8
million in 2000 to $1.4 million in 2001, due to lower capital spending,
partially offset by acquisition costs and purchase of additional equity in the
Indian subsidiary.

Cash used by financing activities reduced by $0.3 million or 7.0% from $4.2
million in 2000 to $3.9 million in 2001. During the first quarter of 2001 the
Company repaid $1.0 million of its term loans, and paid a dividend of $0.5
million on its Redeemable cumulative Series A preferred stock.

Management believes that cash flows from operations and the available credit
facility will be sufficient to fund operating requirements and planned capital
expenditures over the next 12 months. See "Forward Looking Statements".

As of October 30, 1996, the Company entered into a tax sharing agreement with
the principal stockholder, Unifrax Holding Co. ("Holding"). The results of its
operations are now included in the consolidated U.S. corporate income tax return
of Holding. The Company's provision for income taxes is computed as if the
Company filed its annual tax returns on a separate Company basis. The current
portion of the income tax provision will be satisfied by a payment to or from
Holding.

At December 31, 2000, the Company had U.S. Federal and State net operating loss
carryforwards totaling approximately $13 million which will be available to
offset future taxable income. These net operating loss carryforwards expire in
2011 through 2019.

LEGAL PROCEEDINGS

Reference is made to the information included in Note D to the condensed
consolidated financial statements of the Company included under Item 1 in this
Form 10-Q, which is hereby incorporated herein by reference.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The intended use of the derivative and its

                                       11

<PAGE>   14



designation as either a fair value hedge, a cash flow hedge, or a foreign
currency hedge, will determine when the gains or losses on the derivatives are
to be reported in earnings and when they are to be reported as a component of
other comprehensive income. The Company has adopted SFAS No. 133, as of January
1, 2001. The impact of the adoption is included in the information shown in Note
G to the condensed consolidated financial statements of the Company included
under Item 1 in this Form 10-Q, which is hereby incorporated herein by
reference.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.


































                                       12

<PAGE>   15






PART II.   OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

           Reference is made to the information included in Note D to the
           condensed consolidated financial statements of the Company and
           included in this Form 10-Q, which is hereby incorporated herein by
           reference.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

           None.

ITEM 3.    DEFAULTS ON 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

           None.

(b)        No reports on Form 8-K have been filed during the period covered by
           this report.

                                       13

<PAGE>   16


                                   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.



                                      UNIFRAX CORPORATION



  Date:    05/10/01                   By: /s/ William P. Kelly
        ---------------------            ---------------------
                                      William P. Kelly, President and
                                      Chief Executive Officer


  Date:     05/10/01                  By: /s/ Mark D. Roos
        ---------------------            -----------------
                                      Mark D. Roos, Sr. Vice President
                                      and Chief Financial Officer



                                       14