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, 1998


                        Commission File Number: 333-10611

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


           Delaware                                         34-1535916
(State or other jurisdiction of                   (Employer Identification No.)
 jurisdiction)

               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>
                               Unifrax Corporation
                                    Form 10-Q
                                      Index

                                                                   Page No.

PART I.      FINANCIAL INFORMATION

Item 1.      Condensed Financial Statements (Unaudited)

             Condensed Consolidated Balance Sheets at
                  March 31, 1998 and December 31, 1997.................1

             Condensed Consolidated Statements of Income for the
                  Three-month periods ended March 31, 1998 and 1997....2

             Condensed Consolidated Statements of Cash Flow for the 
                  Three-months periods ended March 31, 1998 and 1997...3

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

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations.............7

PART II.     OTHER INFORMATION

Item 1.      Legal Proceedings.........................................9
Item 2.      Changes in Securities.....................................9
Item 3.      Defaults on Senior Securities.............................9
Item 4.      Submission of Matters to a Vote of Security Holders ......9
Item 5.      Other Information.........................................9
Item 6.      Exhibits and Report on Form 8-K...........................9

Signatures............................................................10

<PAGE>

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
                                                          1997               1998
                                                          ----               ----
<S>                                                     <C>             <C>
ASSETS
Current assets:
     Cash                                               $     359       $      425
     Accounts receivable, less allowances of $1,254
         and $992, respectively                            12,720           13,693
     Inventories                                            7,885            9,075
     Deferred income taxes                                  2,320            2,320
     Prepaid expenses and other current assets                411              475
                                                         ---------        --------
Total current assets                                       23,695           25,988

Property, plant and equipment, at cost                     70,907           71,251
     Less accumulated depreciation and amortization       (33,391)         (34,528)
                                                         --------         --------
                                                           37,516           36,723
Deferred income taxes                                      24,849           24,338
Organization costs, net of accumulated amortization
     of $891 and $1,062, respectively                       4,030            3,842
Other assets                                                  372              328
                                                         ---------        --------
                                                         $ 90,462         $ 91,219
                                                         =========        ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
     Accounts payable                                     $ 3,206          $ 2,411
     Accrued expenses                                       7,568           10,592
                                                        ----------        --------
Total current liabilities                                  10,774           13,003
Long term debt                                            115,500          112,500
Note payable--affiliate                                     7,000            7,000
Accrued postretirement benefit cost                         3,209            3,278
Other long-term obligations                                   158              159
                                                          --------        --------
Total liabilities                                         136,641          135,940

STOCKHOLDERS' DEFICIT
Common stock--$.01 par value;
 shares authorized--40,000;
 shares issued and outstanding--20,000                         --               --
Redeemable convertible cumulative preferred 
  stock--voting $.01 par value;
  shares authorized--10,000, shares issued and 
  outstanding--1,666.67
  (aggregate liquidation preference of $2,536 
  and $2,574, respectively,
  including dividends in arrears)                              --               --
Additional paid-in capital                                 42,520           42,520
Accumulated deficit                                       (88,406)         (86,913)
Cumulative translation adjustment                            (293)            (328)
                                                       -----------      -----------
Total stockholders' deficit                               (46,179)         (44,721)
                                                        ----------        --------
                                                         $ 90,462         $ 91,219
                                                         =========        ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

<PAGE>

                               Unifrax Corporation

                   Condensed Consolidated Statements of Income
                           (Unaudited - In Thousands)



                                                   Three Months Ended March 31
                                                       1997           1998
                                                       ----           ----

Net Sales                                             $22,028        $21,734

Cost of goods sold                                     11,906         10,912
                                                       ------         ------
Gross profit                                           10,122         10,822

Selling and distribution expenses                       3,220          3,134
Administration expenses                                 1,974          2,066
Research and development expenses                        642             666
                                                   ---------        --------
Operating income                                        4,286          4,956

Interest expense                                       (3,157)        (3,031)
Other income (expense), net                                33             79
                                                   -----------    ----------

Income before income taxes                              1,162          2,004
Provision for income taxes                                510            511
                                                    ---------       --------

Net Income                                           $    652        $ 1,493
                                                     ========        =======


See accompanying notes to condensed consolidated financial statements.

<PAGE>



                               Unifrax Corporation

                 Condensed Consolidated Statements of Cash Flows
                           (Unaudited - In Thousands)
<TABLE>
<CAPTION>

                                                                        Three Months Ended March 31
                                                                            1997                1998
                                                                            ----                ----
<S>                                                                      <C>                 <C>
OPERATING ACTIVITIES
Net income                                                               $   652             $ 1,493
Depreciation and amortization                                              1,186               1,426
Other adjustments and changes in operating assets and liabilities          1,064                 544
                                                                        --------            --------
Cash provided by operating activities                                      2,902               3,463

INVESTING ACTIVITIES
Capital expenditures                                                      (2,992)               (416)
Deferred software and other costs                                             --                  --
Proceeds from sales of property, plant and equipment                           9                  19
                                                                         --------           ---------
Cash used in investing activities                                         (2,983)               (397)

FINANCING ACTIVITIES
Borrowings under revolving loan                                             800                4,900
Repayments of revolving loan                                                  0               (6,900)
Repayment of term loan                                                    (1,250)             (1,000)
                                                                         --------            --------
Cash used in financing activities                                           (450)             (3,000)

Net (decrease) increase in cash                                             (531)                 66
Cash--beginning of period                                                   898                  359
                                                                   -------------           ---------
Cash--end of period                                                $        367            $     425
                                                                   =============           =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.



<PAGE>


                               Unifrax Corporation
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 1998


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, 1998, are not necessarily
indicative of the results that may be expected for the year ending  December 31,
1998. For further  information,  refer to the consolidated  financial statements
and the notes  thereto for the year ended  December  31,  1997,  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 - INVENTORIES

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

                              December 31                   March 31
                                 1997                         1998
                              -----------                   --------

  Raw materials and supplies       $1,598                    $1,475
  Work in process                   1,551                     1,726
  Finished products                 4,410                     5,379
                                   ------                    ------
                                    7,559                     8,580
  Adjustment to LIFO Cost             326                       495
                                 --------                  --------
                                  $ 7,885                    $9,075
                                  =======                    ======

<PAGE>
NOTE C - CONTINGENCIES

Ceramic Fibers

Regulatory agencies and others,  including the Company, are currently conducting
scientific  research to determine the potential health impact resulting from the
inhalation of airborne  ceramic  fibers.  To date,  the results of this research
have been  inconclusive as to whether or not ceramic fiber exposure  presents an
unreasonable risk to humans.

Various legal  proceedings  and claims have been made against  manufacturers  of
ceramic  fibers,  including the Company,  alleging death or personal injury 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 is presently not determinable.

Consistent  with  customary  practice  among   manufacturers  of  ceramic  fiber
products,  the Company has entered  into  agreements  with  distributors  of its
product  whereby the Company has agreed to indemnify  the  distributors  against
losses  resulting from ceramic fiber claims and the costs to defend against such
claims.  The amount of any liability that might ultimately exist with respect to
these indemnities is presently not determinable.

Pursuant    to    the    Unifrax    Corporation    Recapitalization    Agreement
("Recapitalization  Agreement"),  BP America Inc. and certain of its  affiliates
(collectively  "BPA"),  has agreed to indemnify the Company against  liabilities
for personal  injury and wrongful  death  attributable  to exposure prior to the
Closing to refractory ceramic fibers manufactured by the Company. BPA has agreed
to indemnify the Company  against all  liabilities  arising from exposure claims
pending at the time of the Closing.  For all other  claims  arising from alleged
exposure  occurring  solely prior to Closing,  BPA 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 BPA has agreed to indemnify the Company
against 100% of such losses. BPA has agreed to indemnify the Company against all
punitive  damages  attributable  to the conduct of the Company prior to Closing.
Where losses  arise from alleged  exposure  both before and after  Closing,  the
losses will be  allocated  between BPA and the Company,  pro rata,  based on the
length of exposure or pursuant to arbitration if initiated by the Company.

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  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 Closing.  Unifrax
intends to defend ceramic fiber claims vigorously.

Environmental Matters

The Company is subject to loss contingencies  pursuant to various federal, state
and local environmental laws and regulations. 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.

Under the terms of the Recapitalization  Agreement,  BPA 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 existing as of the Closing Date.

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,  to have a material adverse effect on its
financial position.

Prior to divestment, the Company owned a site in Sanborn, NY, at which extensive
remediation  activity  is  currently  being  undertaken.  The site was used by a
number of former  Carborundum  operations  other than the  Company.  Testing has
indicated that certain  contamination  is present in the soil.  Neither past nor
current  operations of the Company are believed to have contributed to, or to be
contributing   to,  the  existence  of  the   contamination.   BPA  has  assumed
responsibility for implementing  remedial  activities  specified by the State of
New York which required removal of the  contamination,  chiefly by means of soil
vapor  extraction.  Under the terms of an agreement,  BPA has taken title to and
assumed  liability for the  remediation of this property as of October 30, 1996.
Unifrax leases a portion of the present manufacturing facilities on this site.

Legal Proceedings

The  Company is  involved in  litigation  relating to claims  arising out of its
operations in the normal course of business, including product liability claims.
From  time to time  the  Company  has  been  named as a  defendant  in  lawsuits
involving  alleged injury  suffered from exposure to ceramic fiber.  The Company
believes that it is not presently a party to any litigation the outcome of which
would have a material  adverse  effect on its financial  condition or results of
operations.  Pursuant to the Recapitalization Agreement, BPA agreed to indemnify
the  Company,  subject to  certain  limitations,  against  all  currently  known
lawsuits and certain future lawsuits alleging exposure to ceramic fiber.

Various other legal proceedings and claims have been made against the Company in
the  ordinary  course of  business.  While the amounts  could be material to the
results of operations in the period recognized,  in the opinion of management of
the Company,  the ultimate  liability,  if any, resulting from such matters will
not have a material adverse effect on the Company's financial position.

<PAGE>
PART I.    FINANCIAL INFORMATION

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.
Additional  oral or written  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,  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 a source in China.

Three  Months  Ended March 31, 1998  Compared  With Three Months Ended March 31,
1997

Net sales for the first  quarter of 1998  decreased by $0.3 million or 1.3% from
$22.0  million  in 1997 to $21.7  million  in 1998,  due to lower  sales in some
traditional blanket applications and in porosity-controlled products.

Gross profit  increased by $0.7 million,  or 6.9%, from $10.1 million in 1997 to
$10.8 million in 1998.  Gross profit as a percentage of net sales increased from
46.0% in 1997 to 49.8% in 1998.  The gross profit  increase was primarily due to
fewer outside purchases and resales of ceramic fiber.

Selling and distribution  expenses decreased by $0.1 million, or 2.7%, from $3.2
million in 1997 to $3.1  million in 1998 as a result of the lower sales  volume.
Selling and distribution expense as a percentage of net sales decreased slightly
from 14.6% in 1997 to 14.4% in 1998.

Administration expenses increased by $0.1 million, or 4.7%, from $2.0 million in
1997 to $2.1  million  in 1998  due to  higher  property  taxes.  Administrative
expenses as a percentage of net sales were 9.0 % in 1997 and 9.5% in 1998.

Research and development expenses remained relatively constant in 1997 and 1998,
increasing as a percentage  of net sales from 2.9% in 1997 to 3.1% in 1998,  due
to the lower sales in 1998.

Operating income increased by $0.7 million,  or 15.6%, from $4.3 million in 1997
to $5.0 million in 1998. Operating income as a percentage of net sales increased
from  19.5%  in 1997 to 22.8% in 1998,  as a result  of the  factors  previously
indicated.

Interest expense decreased by $0.2 million, or 4.0% from $3.2 million in 1997 to
$3.0 million in 1998 due to the lower level of long term debt.  Interest expense
decreased as a percentage of net sales from 14.3% in 1997 to 13.9% in 1998.

Provision  for income  taxes  remained  at $0.5  million  in 1997 and 1998.  The
effective  income  tax  rate  decreased  from  43.9%  in 1997 to  25.5% in 1998,
primarily as a result of  recognizing  deferred tax benefits  resulting from the
Recapitalization which were previously unrecognized.

Net income increased by $0.8 million or 129.0% from $0.7 million in 1997 to $1.5
million in 1998, as a result of the factors previously indicated.  Net income as
a percentage of net sales increased from 3.0% in 1997 to 6.9% in 1998.

Liquidity and Capital Resources

During the  three-month  period ended March 31, 1998,  the Company's  cash flows
from operating  activities increased by $0.6 million or 19.3%, from $2.9 million
in 1997 to $3.5  million in 1998.  This  increase  was  primarily  the result of
increased net income offset somewhat by increased working capital requirements.

Cash outflows from  investing  activities  decreased by $2.6 million,  or 86.7%,
from $3.0 million in 1997 to $0.4 million in 1998.  This  decrease was primarily
due to lower capital spending.

Cash  outflows  from  financing  activities  increased by $2.5 million from $0.5
million in 1997 to $3.0  million in 1998.  During the first  quarter of 1998 the
Company  made a voluntary  prepayment  of  principal of $1.0 million on its Term
Loan and repaid $2.0 million  against its revolving  credit  facility.  The $0.5
million  remaining  borrowing against the revolving credit facility at March 31,
1998, was repaid in full on April 1, 1998.

Management  believes that cash flows from  operations  and the available  credit
facility will be sufficient to fund operating and capital  expenditure needs for
1998.


PART II.   OTHER INFORMATION

Item 1.      Legal Proceedings

             None.

Item 2.      Changes in Securities

             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

             27.1        Financial Data Schedule

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

<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.



                                             UNIFRAX CORPORATION



Date: May 11, 1998                           By: /s/ William P. Kelly
      ------------                               --------------------
                                                William P. Kelly, President and
                                                Chief Executive Officer


Date: May 11, 1998                           By: /s/ Mark D. Roos
      ------------                           --------------------
                                                 Mark D. Roos, Vice President
                                                 and Chief Financial Officer