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 June 30, 2000

                        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>

                               Unifrax Corporation

                                    Form 10-Q

                                      Index

                                                                        Page No.

PART I.      FINANCIAL INFORMATION

Item 1.      Condensed Consolidated Financial Statements (Unaudited)

             Condensed Consolidated Balance Sheets at
                  June 30, 2000 and December 31, 1999..........................1

             Condensed Consolidated Statements of Income for the
                  Three-month and six-month periods
                  ended June 30, 2000 and 1999.................................2

             Condensed Consolidated Statements of Cash Flows for the
                  Six-months ended June 30, 2000 and 1999......................3

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

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations.....................8

Item 3.      Qualitative and Quantitative Disclosure About Market Risk........10

PART II.     OTHER INFORMATION

Item 1.      Legal Proceedings................................................11
Item 2.      Changes in Securities and Use of Proceeds........................11
Item 3.      Defaults on Senior Securities   .................................11
Item 4.      Submission of Matters to a Vote of Security Holders .............11
Item 5.      Other Information................................................11
Item 6.      Exhibits and Reports on Form 8-K.................................11

Signatures....................................................................12

<PAGE>

PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

                               Unifrax Corporation

                      Condensed Consolidated Balance Sheets

                  (Unaudited - In Thousands, Except Share Data)


<TABLE>
<S>                                                                  <C>                 <C>


                                                                     December 31           June 30
                                                                        1999                 2000
                                                                        ----                 ----
ASSETS
Current assets:
     Accounts receivable, less allowances of $821
         and $614, respectively                                      $    14,697         $   14,735
     Inventories                                                           9,403              9,335
     Deferred income taxes                                                 2,705              2,705
     Prepaid expenses and other current assets                               233                370
                                                                     -----------
Total current assets                                                      27,038             27,145

Property, plant and equipment, at cost                                    76,455             78,086
     Less accumulated depreciation and amortization                      (40,854)           (42,830)
                                                                     -----------         ----------
                                                                          35,601             35,256

Deferred income taxes                                                     19,334             17,143
Financing costs, net of accumulated amortization
     of $2,392 and $2,767, respectively                                    2,529              2,307
Other assets                                                                  76                 69
              -------------                                          -----------
                                                                     $    84,578         $   81,920
                                                                     ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:

     Current portion of long term debt                                     6,250              1,750
     Accounts payable                                                      3,642              2,528
     Accrued expenses                                                      7,699              8,260
                                                                     -----------         ----------
Total current liabilities                                                 17,591             12,538

Long term debt                                                           100,900             99,200
Accrued postretirement benefit cost                                        3,356              3,413
Other long-term obligations                                                  162                164
                                                                     -----------
Total liabilities                                                        122,009            115,315

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 $2,836 and $2,911, respectively,
     including dividends in arrears)                                          --                 --
Additional paid-in capital                                                42,520             42,520
Accumulated deficit                                                      (79,387)           (75,280)
Accumulated other comprehensive income                                      (564)              (635)
                                                                     -----------         -----------
Total stockholders' deficit                                              (37,431)           (33,395)
                                                                     -----------
                                                                     $    84,578         $   81,920
                                                                     ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

<PAGE>

                               Unifrax Corporation

                   Condensed Consolidated Statements of Income

                           (Unaudited - In Thousands)

<TABLE>
<S>                                         <C>                                 <C>

                                            Three Months Ended June 30          Six Months Ended June 30
                                            --------------------------          ------------------------
                                              1999              2000              1999             2000
                                              ----              ----              ----             ----
Net sales                                   $ 20,520          $ 22,782          $ 41,693         $ 46,776

Cost of goods sold                            10,755            10,982            21,978           22,319
                                              ------          --------          --------         --------
Gross margin                                   9,765            11,800            19,715           24,457

Selling, general and
   administration expenses                     5,299             6,353            11,076           12,776
                                              ------          --------          --------         --------
Operating income                               4,466             5,447             8,639           11,681

Other expense, net                               (53)              (27)             (135)             (32)
                                              ------          --------          --------         --------
Income before interest expense
    and income taxes                           4,413             5,420             8,504           11,649

Interest expense                              (2,858)           (2,672)           (5,789)          (5,340)
                                              ------          --------          --------         --------
Income before income taxes                     1,555             2,748             2,715            6,309

Provision for income taxes                       558               965             1,057            2,202
                                              ------          --------          --------         --------
Net income                                    $  997          $  1,783          $  1,658         $  4,107
                                              ======          ========          ========         ========

</TABLE>

See accompanying notes to condensed consolidated financial statements.

<PAGE>

                               Unifrax Corporation

                 Condensed Consolidated Statements of Cash Flows
                           (Unaudited - In Thousands)




<TABLE>
<S>                                                                             <C>

                                                                                Six Months Ended June 30
                                                                                1999                2000
                                                                                ------------------------

OPERATING ACTIVITIES
Net income                                                                      $ 1,658        $   4,107
Depreciation and amortization                                                     2,762            2,585
Other adjustments and changes in operating assets and liabilities                   578            2,471
                                                                                -------        ---------
Cash provided by operating activities                                             4,998            9,163

INVESTING ACTIVITIES
Capital expenditures                                                             (1,899)          (2,827)
Other                                                                                21             (136)
                                                                                -------        ---------
Cash used in investing activities                                                (1,878)          (2,963)

FINANCING ACTIVITIES
Repurchase of Senior Notes                                                       (2,000)               0
Borrowings under revolving loan                                                  18,850           13,350
Repayments of revolving loan                                                    (18,550)         (15,050)
Repayment of term loan                                                           (1,000)          (4,500)
                                                                                -------        ---------
Cash used in financing activities                                                (2,700)          (6,200)


Net change in cash                                                                  420                0
Cash--beginning of period                                                            43                0
                                                                                -------        ---------
Cash--end of period                                                             $   463        $       0

</TABLE>

See accompanying notes to condensed consolidated financial statements.


<PAGE>

                               Unifrax Corporation

              Notes to Condensed Consolidated Financial Statements

                                  June 30, 2000

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 June 30, 2000, are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2000. For further  information,  refer to the consolidated  financial statements
and the notes  thereto for the year ended  December  31,  1999,  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               June 30
                                             1999                    2000
                                         ------------              -------
         Raw materials and supplies      $ 4,006                   $ 3,367
         Work in process                   1,480                     1,495
         Finished products                 3,459                     3,969
                                         -------                   -------
                                           8,945                     8,831
         Adjustment to LIFO Cost             458                       504
                                         -------                   -------
                                         $ 9,403                   $ 9,335
                                         =======                   =======

<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,   studies  of  workers
withoccupational  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 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 whereby it agreed to indemnify the 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.

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 the 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
Closing.  For all other claims arising from alleged  exposure  occurring  solely
prior to 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  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  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.  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.

<PAGE>

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.

The Company may be named as a potentially  responsible party ("PRP") pursuant to
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended  ("CERCLA" or "Superfund") or comparable state law in connection with
off-site  disposal of hazardous  substances at three sites,  and 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 sites
at which the  Company is a  potential  PRP 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 may have  potential  off-site  liability  and the
Carborundum Sanborn, New York facility are described below.


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 under $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 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  costscould 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.

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-Closing  asbestos exposure.  None of the current or past products of Unifrax
are asbestos-containing materials, as defined by OSHA (29 CFR 1900.1001(b)). For
these claims related to pre-Closing  Carborundum Company matters, BP America has
responsibility under the  Recapitalization  Agreement and is managing the claims
directly.

NOTE D - COMPREHENSIVE INCOME

Comprehensive  income for the three-month  and six-month  periods ended June 30,
1999 and 2000 consisted of the following (in thousands):

<TABLE>
<S>                                         <C>                                 <C>

                                            Three months ended June 30          Six months ended June 30
                                               1999             2000              1999            2000
                                               ----             ----              ----            ----
Net income                                  $  997           $ 1,783            $ 1,658         $ 4,107
Change in foreign currency
   translation adjustment                      (34)              (31)              (223)            (71)
                                            ------           -------            -------         -------
Comprehensive income                        $  963           $ 1,752            $ 1,435         $ 4,036
                                            ======           =======            =======         =======
</TABLE>


NOTE E - SUBSEQUENT EVENTS

On July 31, 2000,  the Company  announced  that it had entered into a definitive
agreement to acquire Carborundum  Insulation  Technology,  the worldwide ceramic
fibers  business of Compagne de  Saint-Gobain.  The  acquisition,  which will be
financed through a combination of bank debt and seller financing, is expected to
close by the end of the third quarter of 2000.

<PAGE>

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,  the impact
     of environmental  regulations on the Company's  operations and property and
     related  governmental  regulations,  and  the  continuing  availability  of
     certain raw materials.

     Three Months Ended June 30, 2000  Compared With Three Months Ended June 30,
     1999

     Net sales for the second quarter of 2000 increased by $2.3 million or 11.0%
     from $20.5 million in 1999 to $22.8 million in 2000, due to higher sales in
     some traditional market applications,  including  petrochemicals and steel,
     and in automotive  catalytic  converter  support  systems,  offset by lower
     sales in porosity-controlled products due to changes in automotive industry
     airbag system designs.

     Gross profit increased by $2.0 million, or 20.8%, from $9.8 million in 1999
     to $11.8  million  in 2000.  Gross  profit  as a  percentage  of net  sales
     increased  from 47.6% in 1999 to 51.8% in 2000.  The gross profit  increase
     was due to the higher sales and improved plant operating  efficiencies  and
     lower overall production costs.

     Selling,  general and administration expenses increased by $1.1 million, or
     19.9%,  from $5.3 million in 1999 to $6.4  million in 2000,  primarily as a
     result of increased  provisions  for incentive  compensation  in 2000,  and
     nonrecurring   reductions  of  liabilities   associated  with  the  product
     stewardship  programs and retiree  medical and insurance  programs in 1999.
     Selling,  general and  administration  expense as a percentage of net sales
     increased from 25.8% in 1999 to 27.9% in 2000.

     Operating income increased by $1.0 million,  or 22.0%, from $4.5 million in
     1999 to $5.5 million in 2000. Operating income as a percentage of net sales
     increased  from 21.8% in 1999 to 23.9% in 2000,  as a result of the factors
     previously indicated.

<PAGE>

     Interest  expense  decreased by $0.2 million,  or 6.5% from $2.9 million in
     1999 to $2.7  million  in 2000 due to the lower  level of long  term  debt,
     offset  in  part  by  higher  interest  rates  on  certain   variable  rate
     borrowings.  Interest  expense  decreased as a percentage of net sales from
     13.9% in 1999 to 11.7% in 2000.

     Provision  for income  taxes  increased  by $0.4 million or 72.9% from $0.6
     million in 1999 to $1.0  million  in 2000.  The  effective  income tax rate
     decreased from 35.9% in 1999 to 35.1% in 2000.

     Net income  increased by $0.8 million or 78.8% from $1.0 million in 1999 to
     $1.8 million in 2000, as a result of the factors previously indicated.  Net
     income as a percentage of net sales  increased from 4.9% in 1999 to 7.8% in
     2000.

     Six Months Ended June 30, 2000 Compared With Six Months Ended June 30, 1999

     Net sales for the first six  months of 2000  increased  by $5.1  million or
     12.2%  from $41.7  million  in 1999 to $46.8  million in 2000 due to higher
     sales in some traditional markets,  including  petrochemical and steel, and
     in automotive catalytic converter support systems, offset by lower sales in
     porosity-controlled  products due to changes in automotive  industry airbag
     system designs.

     Gross profit increased by $4.8 million, or 24.1% from $19.7 million in 1999
     to $24.5  million  in 2000.  Gross  profit  as a  percentage  of net  sales
     increased  from 47.3% in 1999 to 52.3% in 2000.  The gross profit  increase
     was  due  to  the  higher  sales  volume  and  improved   plant   operating
     efficiencies and lower overall production costs.

     Selling,  general and administration  expenses increased by $1.7 million or
     15.3% from $11.1 million in 1999 to $12.8 million in 2000,  increasing as a
     percentage of net sales from 26.6% in 1999 to 27.3% in 2000, primarily as a
     result of increased  provisions  for incentive  compensation  in 2000,  and
     nonrecurring   reductions  of  liabilities   associated  with  the  product
     stewardship programs and retiree medical and insurance programs in 1999.

     Operating income  increased by $3.1 million,  or 35.2% from $8.6 million in
     1999 to $11.7  million in 2000.  Operating  income as a  percentage  of net
     sales  increased  from  20.7% in 1999 to 25.0% in 2000,  as a result of the
     factors previously indicated.

     Interest  expense  decreased  by $0.5  million or 7.8% from $5.8 million in
     1999 to $5.3  million  in 2000 due to the  lower  level of long  term  debt
     offset  in  part  by  higher  interest  rates  on  certain   variable  rate
     borrowings.  Interest  expense as a percentage of net sales  decreased from
     13.9% in 1999 to 11.4% in 2000.

     Provision  for income  taxes  increased by $1.1 million or 108.3% from $1.1
     million in 1999 to $2.2  million  in 2000.  The  effective  income tax rate
     decreased from 38.9% in 1999 to 34.9% in 2000, primarily as a result of the
     effective income tax rates of the Company's foreign subsidiaries.

     Net income increased by $2.4 million or 147.7% from $1.7 million in 1999 to
     $4.1  million in 2000,  as a result of higher  sales volume and the factors
     previously  indicated.  Net income as a percentage  of net sales  increased
     from 4.0% in 1999 to 8.8% in 2000.

     Liquidity and Capital Resources

     During the six-month  period ended June 30, 2000,  the Company's cash flows
     from  operating  activities  increased by $4.2 million or 83.3%,  from $5.0
     million in 1999 to $9.2 million in 2000.  This  increase was  primarily the
     result of the higher net income.

     Cash used by investing activities increased by $1.1 million, or 57.8%, from
     $1.9  million  in 1999 to $3.0  million  in  2000,  due to  higher  capital
     spending related principally to the Company's capacity expansion project at
     its Tonawanda, New York facility.

     Cash used by  financing  activities  increased  by $3.5  million  from $2.7
     million in 1999 to $6.2  million in 2000.  During 2000 the  Company  repaid
     $4.5 million of its term loan.

     Management  believes  that cash flows  from  operations  and the  available
     credit  facility will be sufficient to fund normal  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, 1999,  the Company had Federal and State net operating loss
     carryforwards  totaling approximately $15.5 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 C to the 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  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 new standard  must be adopted for year 2001  financial  reporting.  The
     Company has not yet adopted the standard and the impact of compliance  with
     SFAS No. 133 has not yet been determined.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.

<PAGE>

PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings

          Reference  is  made  to  the  information  included  in  Note C to the
          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

               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:        08/11/00                       By: /s/ William P. Kelly
      ------------------------                  -------------------------------
                                                William P. Kelly, President and
                                                Chief Executive Officer

Date:        08/11/ 00                      By: /s/ Mark D. Roos
      ---------------------------               -------------------------------
                                                Mark D. Roos, Vice President
                                                and Chief Financial Officer