<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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


                                    FORM 10Q

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

                  For the quarterly period ended June 30, 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


<TABLE>
<CAPTION>
                                                                                               Page No.
                                                                                               --------
PART I. FINANCIAL INFORMATION

<S>                                                                                               <C>
Item 1.  Condensed Consolidated Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheets at
              December 31, 2000 and June 30, 2001..................................................1

         Condensed Consolidated Statements of Income for the
              Three-month and six-month periods ended June 30, 2000 and 2001.......................2

         Condensed Consolidated Statements of Cash Flows for the
              Six months ended June 30, 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................................13

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings........................................................................14
Item 2.  Changes in Securities and Use of Proceeds................................................14
Item 3.  Defaults on Senior Securities............................................................14
Item 4.  Submission of Matters to a Vote of Security Holders......................................14
Item 5.  Other Information........................................................................14
Item 6.  Exhibits and Reports on Form 8-K.........................................................14

Signatures........................................................................................15
</TABLE>



<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         JUNE 30
                                                                                          -----------        ---------
                                                                                             2000               2001
                                                                                           ---------         ---------

<S>                                                                                        <C>               <C>
ASSETS
Current assets:
Cash                                                                                       $   2,649         $   5,164
Marketable securities and investments                                                            200               215
Accounts receivable, trade, less allowance of $1,977 and $1,766, respectively                 37,068            35,759
Accounts receivable, Saint-Gobain                                                             10,091               246
Inventories                                                                                   17,134            17,200
Deferred income taxes                                                                          2,114             2,072
Prepaid expenses and other current assets                                                        691             2,067
                                                                                           ---------         ---------
Total current assets                                                                          69,947            62,723
Property, plant and equipment, at cost                                                       117,163           116,211
   Less accumulated depreciation and amortization                                            (45,812)          (50,197)
                                                                                           ---------         ---------
                                                                                              71,351            66,014
Deferred income taxes                                                                         17,288            16,034
Financing costs, net of accumulated amortization of $2,358 and $3,066, respectively            3,009             2,471
Marketable securities and investments                                                            591               912
Other assets                                                                                     346               322
                                                                                           ---------         ---------
                                                                                           $ 162,532         $ 148,476
                                                                                           =========         =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt                                                          $   8,880         $   6,503
Accounts payable                                                                              11,497             8,017
Accrued liabilities                                                                           18,200            17,131
                                                                                           ---------         ---------
Total current liabilities                                                                     38,577            31,651

Long-term debt                                                                               126,023           116,395
Accrued postretirement benefit cost                                                            3,491             3,561
Other long-term obligations                                                                    1,037               833
Deferred income taxes                                                                          1,573             1,505

Minority interest                                                                                887               863

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 $3,061, respectively,
   including dividends in arrears)                                                                 -                 -
Additional paid-in capital                                                                    63,020            63,020
Accumulated deficit                                                                          (72,290)          (66,707)
Accumulated other comprehensive income (loss) - cumulative foreign
    currency translation adjustment                                                              214            (2,645)
                                                                                           ---------         ---------
                                                                                              (9,056)           (6,332)
                                                                                           ---------         ---------
                                                                                           $ 162,532         $ 148,476
                                                                                           =========         =========
</TABLE>

See accompanying notes to condensed consolidated financial statement


                                       1
<PAGE>   4


                               UNIFRAX CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                           (UNAUDITED - IN THOUSANDS)


<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED JUNE 30          SIX MONTHS ENDED JUNE 30
                                      --------------------------         -------------------------
                                         2000             2001             2000             2001
                                       --------         --------         --------         --------
<S>                                    <C>              <C>              <C>              <C>
Net sales                              $ 22,782         $ 42,397         $ 46,776         $ 86,017

Cost of goods sold                       10,982           22,316           22,319           45,115
                                       --------         --------         --------         --------
Gross margin                             11,800           20,081           24,457           40,902

Selling, general and
   administration expenses                6,353           12,130           12,776           24,959
                                       --------         --------         --------         --------
Operating income                          5,447            7,951           11,681           15,943

Other expenses net                          (27)             (26)             (32)            (147)
                                       --------         --------         --------         --------
Income before interest, income
   taxes, and minority interest           5,420            7,925           11,649           15,796

Interest expense                         (2,672)          (3,077)          (5,340)          (6,626)
                                       --------         --------         --------         --------
Income before income taxes and
   minority interest                      2,748            4,848            6,309            9,170

Provision for income taxes                  965            1,510            2,202            3,011
                                       --------         --------         --------         --------
Income before minority interest           1,783            3,338            4,107            6,159
Minority interest                             -               51                -              108
                                       --------         --------         --------         --------

Net income                             $  1,783         $  3,287         $  4,107         $  6,051
                                       ========         ========         ========         ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                       2
<PAGE>   5


                               UNIFRAX CORPORATION

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



<TABLE>
<CAPTION>
                                                                         SIX MONTHS ENDED JUNE 30
                                                                         ------------------------
                                                                           2000             2001
                                                                           ----             ----



<S>                                                                      <C>              <C>
OPERATING ACTIVITIES
Net income                                                               $  4,107         $  6,051

Depreciation and amortization                                               2,585            5,363
Other adjustments and changes in operating assets and liabilities           2,471            4,137
                                                                         --------         --------
Cash provided by operating activities                                       9,163           15,551

INVESTING ACTIVITIES
Capital expenditures                                                       (2,827)          (2,470)
Other                                                                        (136)            (519)
                                                                         --------         --------
Cash used in investing activities                                          (2,963)          (2,989)

FINANCING ACTIVITIES
Dividends paid                                                                  -             (468)
Borrowings under revolving loan                                            13,350           12,350
Repayments of revolving loan                                              (15,050)         (15,364)
Proceeds from term loan borrowing                                               -            1,500
Repayment of term loan                                                     (4,500)          (6,350)
Repayment of promissory note to Saint-Gobain                                    -           (1,500)
                                                                         --------         --------
Cash used in financing activities                                          (6,200)          (9,832)
Net effect of exchange rate changes on cash                                     -             (215)
                                                                         --------         --------

Net change in cash                                                              -            2,515
Cash--beginning of period                                                       -            2,649
                                                                         --------         --------
Cash--end of period                                                      $      -         $  5,164
                                                                         ========         ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   6


                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 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 June 30, 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 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. The purchase price adjustment process was completed
during the second quarter with no significant change in the original
allocations. In connection with the Acquisition, Saint-Gobain agreed to
compensate the Company for certain liabilities that the Company would be
responsible for discharging. Accordingly, during the quarter ended June 30,
2001, Saint-Gobain remitted $9,006,000 to the Company.

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.
                                                     Six months ended
                                                        June 30, 2000
                                                     --------------------
                                                        (In thousands)

                           Net sales                    $   85,017
                           Net income                        4,979


On January 27, 2001, the Company acquired a further 83,350 shares of Orient
Cerlane Ltd. representing approximately 4.2% of shares outstanding at that time,
for approximately $433,000, including related expenses, increasing its ownership
to 63.13%.


                                       4
<PAGE>   7


                              1UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001

NOTE C - INVENTORIES

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

<TABLE>
<CAPTION>
                                                         December 31                     June 30
                                                                2000                        2001
                                                        ------------                  ----------

<S>                                                        <C>                          <C>
                  Raw materials and supplies               $   5,662                    $   6,242
                  Work in process                              1,187                        1,454
                  Finished products                            9,802                        8,656
                                                            --------                     --------
                                                              16,651                       16,352

                  Adjustment to LIFO Cost                        483                          848
                                                            --------                     --------
                                                            $ 17,134                     $ 17,200
                                                            ========                     ========
</TABLE>


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
                                  JUNE 30, 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
                                  JUNE 30, 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. EPA has offered a settlement for less than $100,000. Based
on that offer and information 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
                                  JUNE 30, 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 and six-month periods ended June 30,
2000 and 2001 consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                Three months ended June 30       Six months ended June 30
                                    2000            2001            2000           2001
                                  -------         -------         -------         -------

<S>                               <C>             <C>             <C>             <C>
Net income                        $ 1,783         $ 3,287         $ 4,107         $ 6,051
Change in foreign currency
   translation adjustment             (31)           (997)            (71)         (2,859)
                                  -------         -------         -------         -------
Comprehensive income              $ 1,752         $ 2,290         $ 4,036         $ 3,192
                                  =======         =======         =======         =======
</TABLE>



NOTE F - INTEREST RATE SWAP AGREEMENTS

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 June 30, 2001 was 4.1%.


                                       8
<PAGE>   11



                               UNIFRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001


Statement of Financial Accounting Standards 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's interest rate swap agreements involve 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 agreements 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 agreements ($147,000 at June 30, 2001) as a current
asset, with an offsetting increase in the balance of its long term debt.

NOTE G - 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 JUNE 30, 2001 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2000

Net sales for the second quarter of 2001 increased by $19.6 million or 86.1%
from $22.8 million in 2000 to $42.4 million in 2001. Sales for the second
quarter of 2001 included the addition of the Saint-Gobain worldwide ceramic
fiber business which was acquired by Unifrax in October 2000 (the
"Acquisition").

Gross profit increased by $8.3 million or 70.2% from $11.8 million in 2000 to
$20.1 million in 2001. Gross profit as a percentage of net sales decreased from
51.8% in 2000 to 47.4% in 2001. The increase in gross profit was due to the
higher sales volume. The lower overall gross profit percentage of net sales
reflects the effect of lower gross margins in some of the recently-acquired
businesses, and weaker margins in North America.

Selling, general, and administrative expenses increased by $5.8 million or 90.9%
from $6.3 million in 2000 to $12.1 million in 2001. SG&A expenses for the second
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. Selling, general, and administrative expenses as a percentage of
net sales increased from 27.9% in 2000 to 28.6% in 2001.

Operating income increased by $2.5 million or 46.0% from $5.5 million in 2000 to
$8.0 million in 2001, as a result of the factors previously indicated. Operating
income as a percentage of net sales decreased from 23.9% in 2000 to 18.8% in
2001.


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<PAGE>   13


Interest expense increased by $0.4 million or 15.2% from $2.7 million in 2000 to
$3.1 million in 2001 due primarily to the additional debt associated with the
Acquisition of the Saint-Gobain ceramic fiber business, offset in part by lower
interest costs on certain variable rate borrowings. Interest expense decreased
as a percentage of net sales from 11.7% in 2000 to 7.3% in 2001.

Provision for income taxes increased by $0.5 million or 56.5% from $1.0 million
in 2000 to $1.5 million in 2001. The effective income tax rate reduced from
35.1% in 2000 to 31.1% in 2001 primarily as a result of the effective income tax
rates of the Company's foreign subsidiaries.

Net income increased by $1.5 million or 84.4% from $1.8 million in 2000 to $3.3
million in 2001, as a result of the factors previously indicated. Net income as
a percentage of net sales remained at 7.8% in both 2000 and 2001.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2000

Net Sales in the first six months of 2001 increased by $39.2 million or 83.9%
from $46.8 million in 2000 to $86.0 million in 2001. Sales for the first six
months of 2001 included the addition of the Saint-Gobain worldwide ceramic fiber
business which was acquired by Unifrax in October 2000 (the "Acquisition").

Gross profit increased by $16.4 million or 67.2% from $24.5 million in 2000 to
$40.9 million in 2001. Gross profit as a percentage of net sales decreased from
52.3% in 2000 to 47.6% 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 overseas businesses, and weaker margins in North America.

Selling, general, and administrative expenses increased by $12.2 million or
95.4% from $12.8 million in 2000 to $25.0 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. Selling,
general, and administrative expenses as a percentage of net sales increased from
27.3% in 2000 to 29.0% in 2001.

Operating income increased by $4.2 million or 36.5% from $11.7 million in 2000
to $15.9 million in 2001, as a result of the factors previously indicated.
Operating income as a percentage of net sales decreased from 25.0% in 2000 to
18.5% in 2001.

Interest expense increased by $1.3 million or 24.1% from $5.3 million in 2000 to
$6.6 million in 2001 due primarily to the additional debt associated with the
acquisition of the Saint-Gobain ceramic fiber business, offset in part by lower
interest costs on certain variable rate borrowings. Interest expense decreased
as a percentage of net sales from 11.4% in 2000 to 7.7% in 2001.

Provision for income taxes increased by $0.8 million or 36.7% from $2.2 million
in 2000 to $3.0 million in 2001. The effective income tax rate reduced from
34.9% in 2000 to 32.8% in 2001, primarily as a result of the effective income
tax rates of the Company's foreign subsidiaries.

Net income increased by $2.0 million or 47.3% from $4.1 million in 2000 to $6.1
million in 2001, as a result of the factors previously indicated. Net income as
a percentage of net sales decreased from 8.8% in 2000 to 7.0% in 2001.


                                       11
<PAGE>   14


LIQUIDITY AND CAPITAL RESOURCES

During the six-month period ended June 30, 2001, the Company's cash flows from
operating activities increased by $6.4 million or 69.7%, from $9.2 million in
2000 to $15.6 million in 2001. This increase was principally due to higher net
income and depreciation and amortization resulting from the addition of the
Saint-Gobain worldwide ceramic fiber business which was acquired by Unifrax in
October 2000, offset in part by payments of various incentives related to year
2000 performance. In addition, in connection with the Acquisition, Saint-Gobain
agreed to compensate the Company for certain liabilities that the Company would
be responsible for discharging. During the six-month period ended June 30, 2001,
Saint-Gobain remitted $9,006,000 to the Company.

Cash used by investing activities remained constant at $3.0 million, with lower
capital spending in 2001 offset by additional acquisition costs and purchase of
additional equity in the Indian subsidiary.

Cash used by financing activities increased by $3.6 million or 58.6% from $6.2
million in 2000 to $9.8 million in 2001. During the first six months of 2001 the
Company borrowed $1.5 million on its term loan facility and repaid a $1.5
million promissory note to Saint-Gobain. The Company also repaid $6.3 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 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, 2000, the Company had Federal and State net operating loss
carryforwards totaling approximately $13.0 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
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
F to the condensed consolidated financial statements of the Company included
under Item 1 in this Form 10-Q,


                                       12
<PAGE>   15


which is hereby incorporated herein by
reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.












                                       13
<PAGE>   16


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.



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<PAGE>   17


                                   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:     August 10, 2001                  By: /s/ William P. Kelly
        ------------------------             -----------------------------------
                                             William P. Kelly, President and
                                             Chief Executive Officer


  Date:     August 10, 2001                  By: /s/ Mark D. Roos
        ------------------------             -----------------------------------
                                             Mark D. Roos, Sr. Vice President
                                             and Chief Financial Officer



                                       15