<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

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

    For the Quarter Ended September 28, 2003, or
                          ------------------

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

    For the transition period from          to
                                   --------    --------

    Commission File Number 1-9298
                           ------

                               RAYTECH CORPORATION
                 ----------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           Delaware                                     06-1182033
-------------------------------                      ----------------
(STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)


Suite 295, Four Corporate Drive
      Shelton, Connecticut                                06484
---------------------------------------                   -----
(Address of Principal Executive Offices)                (Zip Code)

                                  203-925-8023
                         -------------------------------
                         (REGISTRANT'S TELEPHONE NUMBER)

--------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the Registrant (1) has filed all reports 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
                           -----               -----

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12B-2 OF THE ACT).

                       YES                  NO   X
                           -----               -----

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTIONS 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT.

                       YES   X              NO
                           -----               -----

As of October 31, 2003, 41,737,306 shares of common stock were outstanding and
the aggregate market value of these shares (based upon the closing price of
Raytech common stock on the New York Stock Exchange) on such date held by
non-affiliates was approximately $25.0 million.


                                  Page 1 of 34


<PAGE>

                               RAYTECH CORPORATION
                               -------------------

                                      INDEX


                                                                   Page
                                                                  Number
                                                                  ------

PART I.   FINANCIAL INFORMATION:

Item 1.   Financial Statements

          Condensed Consolidated Balance
          Sheets at September 28, 2003 (Unaudited)
          and December 29, 2002                                      3

          Condensed Consolidated Statements of Operations
          (Unaudited) for the thirteen weeks ended
          September 28, 2003 and September 29, 2002                  4

          Condensed Consolidated Statements of Operations
          (Unaudited) for the thirty-nine weeks ended
          September 28, 2003 and September 29, 2002                  5

          Condensed Consolidated Statements of Cash Flows
          (Unaudited) for the thirty-nine weeks ended
          September 28, 2003 and September 29, 2002                  6

          Condensed Consolidated Statements of Changes in
          Shareholders' Equity (Unaudited) for the thirty-nine
          weeks ended September 28, 2003 and September 29, 2002      7

          Notes to Condensed Consolidated Financial Statements
          (Unaudited)                                                8

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations             22

Item 3.   Quantitative and Qualitative Disclosures
          About Market Risk                                         30

Item 4.   Controls and Procedures                                   30


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                         31

Item 6.   Exhibits and Reports on Form 8-K                          31

          Signature                                                 32

          Certifications                                            33




                                      -2-
<PAGE>

RAYTECH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------

                                                           September 28, 2003  December 29, 2002
At                                                             (unaudited)       (unaudited)
------------------------------------------------------------------------------------------------

<S>                                                        <C>                    <C>
ASSETS
Current assets
  Cash and cash equivalents                                       $ 11,631         $ 19,983
  Restricted cash                                                    4,863            2,027
  Trade accounts receivable, less allowance
    of $1,050 and $824                                              28,546           26,640
  Inventories, net                                                  33,442           34,057
  Income taxes receivable                                              550            4,793
  Other current assets                                               2,497            5,078
-------------------------------------------------------------------------------------------
      Total current assets                                          81,529           92,578
-------------------------------------------------------------------------------------------

Property, plant and equipment                                      139,881          131,378
  Less accumulated depreciation                                    (37,633)         (25,257)
-------------------------------------------------------------------------------------------
      Net property, plant and equipment                            102,248          106,121
-------------------------------------------------------------------------------------------

Intangible assets, net                                              68,893           70,562
Deferred income taxes                                                  -             21,906
Other assets                                                         3,019            3,054
-------------------------------------------------------------------------------------------
Total assets                                                      $255,689         $294,221
===========================================================================================


LIABILITIES
Current liabilities
  Notes payable and current portion of long-term debt             $ 12,058         $ 15,091
  Current portion of pension obligation                              8,030            8,030
  Accounts payable                                                  15,785           15,089
  Accrued liabilities                                               30,102           26,258
  Payable to the PI Trust                                            3,380            4,793
-------------------------------------------------------------------------------------------
      Total current liabilities                                     69,355           69,261
-------------------------------------------------------------------------------------------

Long-term debt                                                       4,233            4,293
Pension obligation                                                   8,553           12,815
Postretirement benefits other than pension                          14,519           13,800
Deferred payable to the PI Trust                                    18,664           42,356
Deferred income taxes                                                5,530              -
Other long-term liabilities                                            857              827
-------------------------------------------------------------------------------------------
Total liabilities                                                  121,711          143,352
-------------------------------------------------------------------------------------------
Minority interest                                                    9,380            8,759

Commitments and contingencies
SHAREHOLDERS' EQUITY
Capital stock
  Cumulative preferred stock, no par value,
    5,000,000 shares authorized, none issued and
    outstanding                                                        -                 -
  Common stock, par value $1.00, 50,000,000 shares
    authorized, 41,737,306 and 41,701,554 issued and
    outstanding                                                     41,737           41,701
Additional paid in capital                                         117,574          117,458
Accumulated deficit                                                (27,080)          (8,402)
Accumulated other comprehensive loss                                (7,633)          (8,647)
-------------------------------------------------------------------------------------------

      Total shareholders' equity                                   124,598          142,110
-------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                       $ 255,689      $   294,221
===========================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.



                                      -3-
<PAGE>


                               RAYTECH CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                        (in thousands, except share data)
                                   (unaudited)





---------------------------------------------------------------------------
                                                              September 29,
For the 13 Weeks Ended                     September 28, 2003     2002
                                                               (as revised)
---------------------------------------------------------------------------

Net sales                                      $ 47,878          $ 51,740
Cost of sales                                   (42,341)          (43,174)
--------------------------------------------------------------------------

  Gross profit                                    5,537             8,566

Selling, general and
  administrative expenses                        (8,366)           (7,960)
--------------------------------------------------------------------------

  Operating (loss) profit                        (2,829)              606

Interest expense                                   (241)             (309)
Other income, net                                23,694               300
--------------------------------------------------------------------------

Income before provision for
  environmental claims, income taxes
  and minority interest                          20,624               597
Provision for environmental claims               (5,500)           (5,400)
--------------------------------------------------------------------------

Income (loss) before provision for income
 taxes and minority interest                     15,124            (4,803)
(Provision) benefit for income taxes            (32,061)            1,787
-------------------------------------------------------------------------

Loss before minority interest                   (16,937)           (3,016)

Minority interest                                  (129)             (173)
--------------------------------------------------------------------------

Net loss                                       $(17,066)         $ (3,189)
==========================================================================

Basic loss per share                           $   (.41)         $   (.08)
==========================================================================

Diluted loss per share                         $   (.41)         $   (.08)
==========================================================================


The accompanying notes are an integral part of these statements.




                                      -4-
<PAGE>


                               RAYTECH CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                        (in thousands, except share data)
                                   (unaudited)




--------------------------------------------------------------------------
                                                             September 29,
For the 39 Weeks Ended                     September 28, 2003    2002
                                                              (as revised)
--------------------------------------------------------------------------

Net sales                                      $ 157,706       $ 159,754
Cost of sales                                   (135,148)       (129,577)
-------------------------------------------------------------------------

  Gross profit                                    22,558          30,177

Selling, general and
  administrative expenses                        (25,210)        (23,734)
------------------------------------------------------------------------

  Operating (loss) profit                         (2,652)          6,443

Interest expense                                    (756)           (765)
Other income, net                                 24,272              83
------------------------------------------------------------------------

Income before provision for environmental
  claims, income taxes and minority interest      20,864           5,761
Provision for environmental claims                (7,262)         (5,400)
------------------------------------------------------------------------

Income before provision for income
 taxes and minority interest                      13,602             361
Provision for income taxes                       (31,659)           (201)
------------------------------------------------------------------------
(Loss) income before minority interest           (18,057)            160

Minority interest                                   (621)           (949)
------------------------------------------------------------------------

Net loss                                       $ (18,678)      $    (789)
========================================================================

Basic loss per share                           $    (.45)      $    (.02)
========================================================================

Diluted loss per share                         $    (.45)      $    (.02)
========================================================================


The accompanying notes are an integral part of these statements.



                                      -5-
<PAGE>


                               RAYTECH CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                 (in thousands)
                                   (unaudited)




---------------------------------------------------------------------------
                                                              September 29,
For the 39 Weeks Ended                       September 28,         2002
                                                 2003         (as revised)
---------------------------------------------------------------------------
Cash flows from operating activities:

  Net loss                                     $(18,678)          $   (789)
  Depreciation and amortization                  13,849             13,024
  Other operating activities                      6,742             (2,405)
--------------------------------------------------------------------------
    Net cash provided by
      operating activities                        1,913              9,830
--------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                           (6,880)            (6,919)
  Proceeds on sales of property,
    plant and equipment                             -                   58
--------------------------------------------------------------------------
    Net cash used in
      investing activities                       (6,880)            (6,861)

Cash flows from financing activities:
  Net (payments) proceeds on short-term notes    (3,243)               768
  Principal payments on long-term debt           (1,791)              (830)
  Proceeds from long-term borrowings              1,298                121
  Proceeds from exercise of stock options           152                464
--------------------------------------------------------------------------
    Net cash (used in) provided by
      financing activities                       (3,584)               523

Effect of exchange rate changes on cash             199                158

Net change in cash and cash equivalents          (8,352)             3,650

Cash and cash equivalents at
  beginning of period                            19,983             14,463
--------------------------------------------------------------------------

Cash and cash equivalents at end of period     $ 11,631           $ 18,113
==========================================================================

The accompanying notes are an integral part of these statements.



                                      -6-
<PAGE>



                               RAYTECH CORPORATION
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
      --------------------------------------------------------------------
                                 (IN THOUSANDS)
                                   (UNAUDITED)




<TABLE>
<CAPTION>
                                                                  ACCUMULATED
                                        ADDITIONAL                  OTHER
                                COMMON    PAID IN   ACCUMULATED  COMPREHENSIVE
                                 STOCK     CAPITAL     DEFICIT        LOSS             TOTAL
                                                    (AS REVISED)                   (AS REVISED)
----------------------------------------------------------------------------------------------


<S>                            <C>      <C>         <C>          <C>               <C>
BALANCE,
 DECEMBER 30, 2001             $41,528   $116,843     $ (5,577)     $(8,711)       $ 144,083

COMPREHENSIVE INCOME:

  NET LOSS                         -          -           (789)         -               (789)

  CHANGES DURING
   THE PERIOD                      -          -            -          1,272            1,272
--------------------------------------------------------------------------------------------

TOTAL COMPREHENSIVE
  INCOME                           -          -           (789)       1,272              483
--------------------------------------------------------------------------------------------
STOCK OPTIONS EXERCISED            155        309          -            -                464

BALANCE,
 SEPTEMBER 29, 2002            $41,683   $117,152     $ (6,366)     $(7,439)       $ 145,030
============================================================================================



BALANCE,
 DECEMBER 29, 2002             $41,701  $117,458     $ (8,402)     $(8,647)       $ 142,110

COMPREHENSIVE LOSS:

  NET LOSS                         -         -        (18,678)         -            (18,678)

  CHANGES DURING
   THE PERIOD                      -         -             -         1,014            1,014
-------------------------------------------------------------------------------------------

TOTAL COMPREHENSIVE
  LOSS                             -         -        (18,678)       1,014          (17,664)
--------------------------------------------------------------------------------------------

STOCK OPTIONS EXERCISED             36       116           -           -                152

BALANCE,
 SEPTEMBER 28, 2003            $41,737  $117,574     $(27,080)     $(7,633)       $ 124,598
===========================================================================================
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.



                                      -7-
<PAGE>


                               RAYTECH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                 (dollars in thousands, unless otherwise noted,
                             except per share data)
                                   (Unaudited)


Note A - Summary of Significant Accounting Policies


          For a summary of all significant accounting policies, refer to Note A
to the consolidated financial statements included with the 2002 Form 10-K.

1.        Presentation of Condensed Unaudited Consolidated Financial Statements

          These condensed unaudited consolidated financial statements have been
          prepared pursuant to the requirements of Article 10 of Regulation S-X,
          and in the opinion of management, contain all adjustments necessary to
          fairly present the consolidated financial position of Raytech as of
          September 28, 2003 and the consolidated results of operations and cash
          flows for all interim periods presented. All adjustments are of a
          normal recurring nature. The year-end condensed consolidated balance
          sheet data was derived from audited financial statements but does not
          include all disclosures required by accounting principles generally
          accepted in the United States of America. The financial statements
          contained herein should be read in conjunction with the Company's
          financial statements and related notes filed on Form 10-K for the year
          ended December 29, 2002. Interim results are not necessarily
          indicative of the results for the full year.

2.        Stock-Based Compensation

          Statement of Financial Accounting Standards ("SFAS") No. 123,
          "Accounting for Stock-Based Compensation," encourages a fair value
          based method of accounting for employee stock options and similar
          equity instruments, which generally would result in the recording of
          additional compensation expense in the company's financial statements.
          The Statement also allows the Company to continue to account for
          stock-based employee compensation using the intrinsic value for equity
          instruments using APB Opinion No. 25. The Company has adopted the
          disclosure-only provisions of SFAS No. 123, as amended by SFAS No.
          148, "Accounting for Stock-Based Compensation - Transition and
          Disclosure." Accordingly, no compensation cost has been recognized for
          the stock option plans in the accompanying financial statements.

          SFAS No. 123, as amended by SFAS No. 148, requires the Company to
          disclose pro forma net income and pro forma earnings per share amounts
          as if compensation expense was recognized for options granted after
          1994. Pro Forma net income and the related basic and diluted earnings
          per share amounts would be as follows:




                                      -8-
<PAGE>
Note A, continued

                                                  For the 13 Weeks Ended
                                           September 28, 2003 September 29, 2002
                                                                (as revised)
                                              -------------     -------------
                                                        (Unaudited)
         Net loss:
         As reported                                $(17,066)          $(3,189)
         Less: total stock-based employee
           compensation expense determined
           under fair value based method                (670)              -
                                                      ------             -----
         Pro forma net loss                         $(17,736)          $(3,189)
                                                      ======             =====

         Basic loss per share:
         As reported                                $   (.41)          $  (.08)
         Pro forma                                  $   (.43)          $  (.08)

         Diluted loss per share:
         As reported                                $   (.41)          $  (.08)
         Pro forma                                  $   (.43)          $  (.08)

         During the thirteen weeks ended March 30, 2003, the Company granted
         options for 1,601,000 shares of common stock with an exercise price of
         $5.70 per share. The fair value of these options was estimated at $3.22
         per common share on the date of grant, using the Black-Scholes option
         pricing model with the following assumptions: expected volatility of
         56.7%, dividend yield of 0.00%, risk free interest rate of 3.60% and an
         expected life of the options of six years. During the thirteen weeks
         ended June 29, 2003, the Company granted options for 1,172,000 shares
         of common stock with an exercise price of $5.70 per share. The fair
         value of these options was estimated at $2.05 per common share on the
         date of grant, using the Black-Scholes option pricing model with the
         following assumptions: expected volatility of 62.30%, dividend yield of
         0.00%, risk free interest rate of 2.84% and an expected life of the
         options of six years.

         There was no pro forma impact on net income for the thirteen weeks
         ended September 29, 2002, as all options outstanding during the period
         were fully vested in 1999.

                                                  For the 39 Weeks Ended
                                         September 28, 2003   September 29, 2002
                                                                (as revised)
                                            --------------     --------------
                                                         (Unaudited)
         Net loss:
         As reported                                $(18,678)          $  (789)
         Less: total stock-based employee
           compensation expense determined
           under fair value based method              (1,754)               -
                                                       -----             -----
         Pro forma net loss                         $(20,432)          $  (789)
                                                      ======             =====

         Basic loss per share:
         As reported                                $   (.45)          $  (.02)
         Pro forma                                  $   (.49)          $  (.02)

         Diluted loss per share:
         As reported                                $   (.45)          $  (.02)
         Pro forma                                  $   (.49)          $  (.02)

         During the thirty-nine weeks ended September 28, 2003, the Company
         granted options for 2,773,000 shares of common stock with an exercise
         price of $5.70 per share.


                                      -9-
<PAGE>


Note A, continued


         There was no pro forma impact on net income for the thirty-nine weeks
         ended September 29, 2002, as all options outstanding during the period
         were fully vested in 1999.

3.       Guarantees

         On November 26, 2002, the Financial Accounting Standards Board ("FASB")
         issued Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and
         Disclosure Requirements for Guarantees, Including Guarantees of
         Indebtedness of Others." FIN 45 clarifies the requirements of SFAS No.
         5, Accounting for Contingencies, relating to a guarantor's accounting
         for, and disclosure of, the issuance of certain types of guarantees.
         For certain guarantees issued after December 31, 2002, FIN 45 requires
         a guarantor to recognize, upon issuance of a guarantee, a liability for
         the fair value of the obligations it assumes under the guarantee.

         The Company provides certain warranties relating to the quality and
         performance of its products. The primary product of the Company,
         friction plates, is used in manual and automatic transmissions,
         transfer cases and wet wheel brake systems for heavy duty equipment.
         The Company maintains product liability insurance that covers personal
         injuries and property damage alleged to have been caused by defective
         products. The Company also has insurance to cover the costs of product
         recalls arising from its German and Chinese operations. However, the
         Company currently carries only limited insurance for product recall
         costs in the United States, and none in the U.K., as management
         believes such insurance to be cost prohibitive given the Company's
         warranty experience. Warranty claims have historically been de minimis
         due to the quality of the Company's products and the impact of other
         potential parts interactions in these systems, which may contribute to
         the root cause of any system failure. The costs in 2003 for product
         warranty support have been de minimis. Some sales contracts with
         customers provide that the Company will indemnify the customer and its
         affiliates against certain specified patent, copyright and trade secret
         infringement claims of third parties that are based on the use or sale
         of the Company components. There have been no significant claims to
         date.

4.       Recently Issued Accounting Pronouncements

         In January 2003, FASB Interpretation No. 46 ("FIN 46"), "Consolidation
         of Variable Interest Entities," was issued. The interpretation provides
         guidance on consolidating variable interest entities. The
         interpretation requires variable interest entities to be consolidated
         if the equity investment at risk is not sufficient to permit an entity
         to finance its activities without support from other parties or the
         equity investors lack certain specified characteristics.

         In October 2003, the FASB deferred the effective date of FIN 46 for all
         variable interest entities to the first reporting period ending after
         December 15, 2003. The Corporation is continuing to review the
         provisions of FIN 46 to determine its impact, if any, on future
         reporting periods with respect to interests in variable interest
         entities and does not currently anticipate any material accounting or
         disclosure requirement under the provisions of the interpretation.

         In April, 2003, the FASB issued Financial Accounting Standard No. 149
         ("SFAS No. 149") "Amendment of Statement 133 Accounting for Derivative
         Instruments and Hedging Activities." This Statement amends and
         clarifies



                                      -10-
<PAGE>


Note A, continued

         financial accounting and reporting for derivative instruments,
         including certain derivative instruments embedded in other contracts
         and for hedging activities under FASB Statement No. 133. SFAS No. 149
         is effective for contracts entered into or modified after June 30,
         2003, with all provisions applied prospectively. Amendments relating to
         implementation issues that were previously cleared by the FASB and were
         effective for fiscal quarters beginning before June 15, 2003 should
         continue to be applied in accordance with their respective effective
         dates. Raytech is evaluating the impact, if any, that this statement
         may have on future reporting. Management's initial review has
         determined that the statement is not currently applicable to Raytech.

         In May, 2003, the FASB issued Financial Accounting Standard No. 150
         (SFAS No. 150), "Accounting for Certain Financial Instruments with
         Characteristics of both Liabilities and Equities. This Statement
         establishes standards regarding the manner in which an issuer
         classifies and measures certain types of financial instruments having
         characteristics of both liabilities and equity. SFAS No. 150 is
         generally effective for financial instruments entered into or modified
         after May 31, 2003 and for contracts in existence at the start of the
         first interim period beginning after June 15, 2003 for mandatorily
         redeemable financial instruments issued by non-public companies;
         however, the effective date is for fiscal periods beginning after
         December 15, 2004. Raytech currently does not have financial
         instruments with the characteristics described in the standard.


Note B - Inventories

Inventories, net, consist of the following:

                               September 28, 2003    December 29, 2002
                                  (Unaudited)
                                ---------------       --------------

         Raw material               $ 11,701            $ 11,049
         Work in process               8,748               8,349
         Finished goods               12,993              14,659
                                      ------              ------
                                    $ 33,442            $ 34,057
                                      ======              ======


Note C - Earnings Per Share
                                        For the               For the
                                    13 Weeks Ended        13 Weeks Ended
                                   September 28, 2003   September 29, 2002
                                                            (as revised)
                                     -------------        --------------
                                                  (Unaudited)
Basic EPS Computation
Numerator:

  Net loss                           $   (17,066)            $    (3,189)
                                          ======                   =====

Denominator:
  Weighted average shares             41,701,554              41,528,520
  Weighted average stock
    options exercised                     35,752                 121,703
                                      ----------              ----------
  Adjusted weighted average shares    41,737,306              41,650,223)
                                      ==========              ==========

Basic loss per share                 $      (.41)            $      (.08)
                                             ===                     ===



                                      -11-
<PAGE>


Note C, continued


Diluted EPS Computation
-----------------------
Numerator:

  Net loss                           $   (17,066)            $    (3,189)
                                          ======                   =====

Denominator:
  Weighted average shares             41,701,554              41,528,520
  Weighted average stock
    options exercised                     35,752                 121,703
  Dilutive potential common shares           -                       -
                                      ----------              ----------

  Adjusted weighted average shares    41,737,306              41,650,223
                                      ==========              ==========

Diluted loss per share               $      (.41)           $      (.08)
                                             ===                    ===

         The potential common shares of 3,063,659 were not included in the
computation of diluted earnings per share for the thirteen weeks ended September
28, 2003 because of their anti-dilutive effect due to the Company incurring a
net loss for the period.

         The potential common shares of 142,052 for the thirteen weeks ended
September 29, 2002 were not included in the computation of diluted earnings per
share because of their anti-dilutive effect due to the Company incurring a net
loss for the period.

                                        For the               For the
                                    39 Weeks Ended        39 Weeks Ended
                                  September 28, 2003    September 29, 2003
                                                            (as revised)
                                     -------------        --------------
                                                (Unaudited)
Basic EPS Computation
Numerator:
  Net loss                           $   (18,678)            $      (789)
                                          ======                     ===

Denominator:
  Weighted average shares             41,701,554              41,528,520
  Weighted average stock
    options exercised                     22,633                  51,800
                                      ----------              ----------
  Adjusted weighted average shares    41,724,187              41,580,320
                                      ==========              ==========

Basic loss per share                 $      (.45)            $      (.02)
                                             ===                     ===


Diluted EPS Computation
Numerator:
  Net loss                           $   (18,678)            $      (789)
                                          ======                     ===

Denominator:
  Weighted average shares             41,701,554              41,528,520
  Weighted average stock
    options exercised                     22,633                  51,800
  Dilutive potential common shares           -                       -
                                      ----------              ----------

  Adjusted weighted average shares    41,724,187              41,580,320
                                      ==========              ==========

Diluted loss per share               $      (.45)            $      (.02)
                                             ===                     ===



                                      -12-
<PAGE>


Note C, continued


         The potential common shares of 3,063,659 were not included in the
computation of diluted earnings per share for the thirty-nine weeks ended
September 28, 2003 because of their anti-dilutive effect due to the Company
incurring a net loss for the period.

         The potential common shares of 76,600 for the thirty-nine weeks ended
September 29, 2002 were not included in the computation of diluted earnings per
share because of their anti-dilutive effect due to the Company incurring a net
loss for the period.

         In February 2002, lawyers claiming to represent the Committee of Equity
Holders filed a motion in U.S. Bankruptcy Court to compel Raytech to either
issue up to approximately 700,000 additional shares to the pre-reorganization
holders of shares in Raytech or their successors, or to proportionately reduce
the shareholdings of the general unsecured creditor shareholders under the Plan
of Reorganization. The ultimate outcome of this matter is unknown; however, it
is possible that its resolution could cause the Company to issue additional
shares to the original shareholder group, or to retire shares held by the
general unsecured creditor shareholder group. This might directly impact the
earnings per share calculations of the Company. The Company has filed a motion
for summary judgment asking the Court to dismiss the action, and the Court has
denied that motion.


Note D - Segment Reporting


         The Company's operations are categorized into three business segments
based on management structure, product type and distribution channel, as
described below.

         The Wet Friction segment produces specialty engineered products for
heat resistant, inertia control, energy absorption and transmission applications
used in an oil immersed environment. The Company markets its products to
automobile and heavy duty original equipment manufacturers ("OEM"), as well as
to farm machinery, mining, truck and bus manufacturers.

         The Dry Friction segment produces engineered friction products, which
are not used in an oil immersed environment, and are primarily used in original
equipment automobile and truck manual transmissions. The clutch facings produced
by this segment are marketed to companies who assemble the manual transmission
systems used in automobiles and trucks.

         The Aftermarket segment produces specialty engineered products used for
wet friction applications, primarily for automobile and light truck
transmissions. In addition to these products, this segment markets transmission
filters and other transmission related components. The focus of this segment is
marketing to warehouse distributors and certain retail operations in the
automotive aftermarket.

Information relating to operations by industry segment follows:




                                      -13-
<PAGE>

Note D, continued


OPERATING SEGMENTS
                                              For the               For the
                                          13 Weeks Ended        13 Weeks Ended
                                         September 28, 2003   September 29, 2002
                                                                  (as revised)
                                           -------------        --------------
                                                       (Unaudited)
Net Sales
Wet Friction                                   $ 28,010             $ 33,614
Aftermarket                                      11,394               11,049
Dry Friction                                     10,592                9,451
Intersegment elimination (1)                     (2,118)              (2,374)
                                                 ------               ------
Net sales to external customers                $ 47,878             $ 51,740
                                                 ======               ======

Operating (Loss) Profit (2)
Wet Friction                                   $ (2,762)            $    713
Aftermarket                                       1,628                1,370
Dry Friction                                        739                  925
Corporate                                        21,019               (2,411)
                                                 ------                -----
Consolidated                                   $ 20,624             $    597
                                                 ======                =====


                                              For the               For the
                                          39 Weeks Ended        39 Weeks Ended
                                        September 28, 2003    September 29, 2002
                                                                 (as revised)
                                           -------------        --------------
                                                  (Unaudited)

Net Sales
Wet Friction                                 $  96,422              $ 105,265
Aftermarket                                     34,173                 35,639
Dry Friction                                    33,702                 26,041
Intersegment elimination (1)                    (6,591)                (7,191)
                                               -------                -------
Net sales to external customers              $ 157,706              $ 159,754
                                               =======                =======

Operating (Loss)Profit (2)
Wet Friction                                 $  (5,189)             $   4,370
Aftermarket                                      5,871                  6,196
Dry Friction                                     3,608                  1,873
Corporate                                       16,574                 (6,678)
                                               -------                -------
Consolidated                                 $  20,864              $   5,761
                                               =======                =======


(1)      The Company records intersegment sales at an amount negotiated between
         the segments. All intersegment sales are eliminated in consolidation.
(2)      The Company's management reviews the performance of its reportable
         segments on an operating profit basis, consisting of (loss) income
         before provision for environmental claims, income taxes and minority
         interest.



Note E - Income Taxes


         During the thirteen-week period ended September 28, 2003, the Company
recorded a tax provision of $32.1 million on income of $15.1 million compared to
a tax benefit of $1.8 million on losses of $4.8 million for the same period in
the prior year. The provision in the current period includes $.4 million from
applying the annualized effective tax rate for the Company's profitable



                                      -14-
<PAGE>


Note E, continued


foreign entities in Germany and China, and Allomatic Products Company, which is
consolidated for financial reporting purposes, but not for tax purposes. Also,
in the current period, due to certain industry dynamics and the Company's
deteriorating profitability in its domestic Wet Friction segment, including the
effect of charges associated with environmental remediation, the Company did not
recognize any tax benefits associated with the cumulative 2003 operating losses
incurred by the Company's U.S. operations due to doubts concerning their future
recoverability. Previously, through the twenty-six-week period ended June 29,
2003, the Company had recorded a tax benefit for losses incurred by the
Company's U.S. operations through that period. This change resulted in a tax
provision of $1.7 million in the current period. In addition, for similar
reasons, during the thirteen-week period ended September 28, 2003, the Company
recorded a valuation allowance of $30.0 million against certain deferred tax
assets due to doubts concerning their future recoverability. The establishment
of the valuation allowance includes a provision of $23.7 million against
deferred income tax assets that inure to the benefit of the Raytech Personal
Injury Trust in accordance with the Tax Assignment and Assumption Agreement, as
more fully described below. As a result, the deferred payable to the Trust was
reduced by an equal amount which was recorded in other income, net. Further, the
Company continues its practice of not recording any tax benefits associated with
the operating losses incurred by the Company's U.K. operations due to concerns
about their future recoverability. The effective tax benefit rate of 37.2% in
the same period of the prior year reflects the statutory rate for each tax
jurisdiction and the effects of certain permanent tax differences.

         For the thirty-nine-week period ended September 28, 2003, the Company
recorded a tax provision of $31.7 million on income of $13.6 million compared to
a provision of $.2 million on income of $.4 million for the same period in the
prior year. The provision in the current year-to-date period reflects the
estimated annualized taxes associated with the Company's profitable foreign
entities and Allomatic Products Company of $1.7 million, and the establishment
of the valuation allowance against certain U.S. deferred tax assets of $30.0
million, as mentioned in the preceding paragraph. The effective rate of 55.7% in
the thirty-nine-week period ended September 29, 2002, reflects the Company's
statutory rate as adjusted for state and foreign taxes, and the effects of
certain permanent differences, primarily due to contributions to the Raymark
pension plans.

         Pursuant to the Tax Benefits Assignment and Assumption Agreement (the
"Agreement"), all tax benefits received by the Company due to the reorganization
are to be passed onto the PI Trust as received. At December 29, 2002, the
Company has tax loss carryforwards of $74.8 million and tax credit carryforwards
of $1.2 million. The net operating loss carryforwards are allocated between
Raytech Corporation and the PI Trust in the amounts of $2.8 million and $72.0
million, respectively. The tax credit carryforwards all inure to the benefit of
the PI Trust. Additionally, future payments to the PI Trust and others will
create additional tax deductions, which will inure to the benefit of the PI
Trust in accordance with the Agreement. These include deductions for payments to
the PI Trust of tax benefits associated with the utilization of the operating
losses allocated to the PI Trust, and contributions made to the Raymark pension
plans. If Raytech Corporation generates additional losses in future periods,
exclusive of losses attributable to the payments discussed above, those losses
will be retained by



                                      -15-
<PAGE>



Note E, continued


the Company. The method of allocation in utilizing current and future operating
losses, if any, between the PI Trust and Raytech Corporation has not been
determined at this time. Additional tax recoveries expected to be received in
future periods are recorded as deferred tax assets and a deferred payable to the
PI Trust which amounted to $18.7 million at September 28, 2003.

         At September 28, 2003, the Company has recorded a tax receivable in the
amount of $.6 million, net of Federal income tax, due from state governments for
returns filed in 2002. In accordance with the Agreement, this amount inures to
the benefit of the PI Trust. The Company has received $1.3 million and $4.2
million net of Federal tax and interest, in the thirteen-week and the
thirty-nine-week periods ended September 28, 2003, respectively, as a partial
recovery of state taxes. The State of Indiana has completed its audit of Raytech
for the years 1992 through 2001. As a result of the audit, Raytech was denied
refunds claimed for Indiana Gross Income tax paid in the years 1992 through 1997
of $1.0 million and certain interest on amounts refunded. Raytech filed a
protest with respect to these items with the Indiana Department of Revenue, and
a hearing was held on August 20, 2003. On September 18, 2003, Raytech received
an order denying the claim for refund. In response to the order, Raytech has
filed a petition with the Indiana Tax Court requesting a refund of Indiana gross
income tax and interest on amounts refunded. Pursuant to the Agreement, any tax
refunds received will be payable, net of Federal tax, to the PI Trust.

         The Company is under an IRS audit for 1996 through 2001. Any tax
assessment, up to the amount of the refunds previously received as a result of
the bankruptcy, arising from this audit or any other years in the carryback
period, are, pursuant to the Agreement, the responsibility of the PI Trust. and
will therefore reduce the deferred tax asset associated with, and liability
payable to, the PI Trust.

         The Company owns 57% of the stock of Allomatic Products Company
("APC"). The Company has not recorded a deferred tax liability for the
undistributed earnings of APC since management expects that those earnings will
be distributed to the Company in a tax-free transaction. However, the deferred
tax liability on the undistributed earnings of APC would be approximately $1.3
million at September 28, 2003, if all of APC's earnings were to be distributed
through dividends.





                                      -16-
<PAGE>



Note F - Goodwill and Other Intangible Assets

                               September 28, 2003         December 29, 2002
                               Gross                    Gross
                             Carrying   Accumulated    Carrying   Accumulated
                              Amount    Amortization    Amount    Amortization
                              ------    ------------    ------    ------------
                                   (Unaudited)

Finite life intangible
  assets:
  Unpatented technology      $ 16,262       $4,851     $ 16,262    $  3,396
  Distribution base             5,716          714        5,716         500
                               ------        -----       ------      ------
    Sub-total                  21,978       $5,565       21,978    $  3,896
                               ------        =====       ------      ======

Indefinite life intangible
  assets:
  Trademarks                   17,713                    17,713
                               ------                    ------
Goodwill                       34,767                    34,767
                               ------                    ------

Intangible assets, net       $ 68,893                  $ 70,562
                               ======                    ======

The weighted-average amortization periods for the unpatented technology and the
distribution base are 8.6 and 20.0 years, respectively. Amortization expense for
the thirteen-week periods ended September 28, 2003 and September 29, 2002
amounted to $556. Amortization expense for the thirty-nine-week periods ended
September 28, 2003 and September 29, 2002 amounted to $1,669 and $1,668,
respectively.

Estimated annual amortization expense is as follows:

                 For the year ending:

                    2003                 $ 2,226
                    2004                   2,226
                    2005                   2,226
                    2006                   2,226
                    2007                   1,926

Trademarks and goodwill will not be amortized but will be reviewed for
impairment annually. The Company's three operating segments have been defined as
reporting units for purposes of testing goodwill for impairment. The amount of
goodwill has been assigned to each of the Company's segments. During the
thirteen weeks ended June 29, 2003, the Company performed its annual impairment
review of the reporting units in accordance with SFAS No. 142, "Goodwill and
Other Intangible Assets," as of March 31, 2003. The effort, which was performed
with assistance from a third party valuation firm, indicated that no impairment
adjustment was necessary. Accordingly, there were no changes in the carrying
amount of trademarks or goodwill during the thirty-nine weeks ended September
29, 2003.


                                      -17-
<PAGE>



Note G - Litigation


         The Company is subject to certain legal matters that have arisen in the
ordinary course of business, and management does not expect these matters will
have a material adverse effect on the Company. In addition, the Company is
involved in the following litigation.

         In April 1996, the Indiana Department of Environmental Management
("IDEM") advised Raybestos Products Company ("RPC"), a wholly-owned subsidiary
of the Company, that it may have contributed to the release of lead and PCB's
(polychlorinated biphenyls) found in a drainage ditch (the "Site") near its
Indiana facility. In June 1996, IDEM named RPC as a potentially responsible
party ("PRP"). RPC notified its insurers of the IDEM action and one insurer
responded by filing a complaint in January 1997 in the U.S. District Court,
Southern District of Indiana, captioned Reliance Insurance Company vs. RPC
seeking a declaratory judgment that any liability of RPC is excluded from its
policy with RPC. In January 2000, the District Court granted summary judgment to
RPC, indicating that the insurer has a duty to defend and indemnify losses
stemming from the IDEM claim. However, in June 2001, Reliance Insurance Company
was placed in liquidation in Pennsylvania. The Company has filed a claim for
such defense and indemnity cost reimbursement in the liquidation proceedings but
has not yet received any decision on its claim. Three additional insurers have
been added to the Reliance case as ordered by the District Court.

         The U.S. Environmental Protection Agency ("EPA") became involved in the
Site in December 2000 and issued a Unilateral Administrative Order under CERCLA
("Order") demanding removal of contaminated soils from the Site. RPC has
substantially completed the investigation and remediation required under the
Order. The Company has estimated that the cost to comply with the Order will be
approximately $18.6 million of which $13.0 million has been spent through
September 28, 2003. The remaining balance of $5.6 million is included in accrued
liabilities. It is at least reasonably possible that there may be additional
assessments from the EPA.

         On May 6, 2003, the EPA indicated that RPC is potentially liable for
PCB contamination downstream of the Site area that is the subject of the Order.
the EPA has not issued an order to RPC regarding this downstream area. However,
the Company has engaged in negotiations with the EPA concerning such possible
additional remediation. The Company has recorded a provision in the current
quarter for $2.4 million as the potential liability for future cleanup costs on
this project. Regardless of the outcome of these negotiations, the Company might
be required to do additional remediation downstream of the Site area that is the
subject of the Order at the Site.

         Before EPA became involved in the Site, IDEM and RPC had entered into
an Agreed Order providing for a risk-based remediation of the contamination
different from the EPA's Order. After IDEM withdrew from the Agreed Order, an
Indiana State Superior Court ruled that IDEM's purported withdrawal from the
Agreed Order was illegal and ordered IDEM to reinstate the Agreed Order and IDEM
complied. In July 2002, RPC filed an action against IDEM for breach of contract
claiming damages based on the difference between the costs of cleanup under the
EPA Order and the IDEM Agreed Order. The outcome of this litigation is not
known.


                                      -18-
<PAGE>


Note G, continued


         On May 15, 2001, the United States Environmental Protection Agency
("EPA") issued a Pre-filing Notice and Opportunity to Confer to RPC. This notice
stated that EPA is contemplating filing a civil action against RPC for
violations of various environmental statutes and is offering RPC the opportunity
to participate in pre-filing negotiations to resolve this matter before
initiation of litigation. EPA stated that it has reason to believe that RPC
committed violations of the Clean Air Act, Clean Water Act, Resource
Conservation and Recovery Act and Toxic Substances Control Act and that RPC
could be subject to substantial penalty. At the time, based on advice of
counsel, the Company recorded a provision of $.3 million related to the
Pre-filing Notice. By letter dated September 3, 2003, EPA stated that penalties
for violations alleged in the Pre-filing Notice could total approximately $180
million and suggested that the parties resolve the Pre-filing Notice claims as
follows: RPC should pay approximately $2.4 million in fines and undertake
compliance activities, on-site investigative work that EPA estimated would cost
about $1.0 million, and corrective action to resolve the Pre-filing Notice. The
parties have not yet begun formal negotiation of this EPA proposal. The Company
provided a provision of $3.1 million in the thirteen-week period ended September
28, 2003 based on the EPA position.

         In February 2002, lawyers claiming to represent the Committee of Equity
Holders filed a motion in U.S. Bankruptcy Court to compel Raytech to either
issue up to approximately 700,000 additional shares to the pre-reorganization
holders of shares in Raytech or their successors, or to proportionately reduce
the shareholdings of the general unsecured creditor shareholders under the Plan
of Reorganization. The ultimate outcome of this matter is unknown; however, it
is possible that its resolution could cause the Company to issue additional
shares to the original shareholder group, or to retire shares held by the
general unsecured creditor shareholder group. This might directly impact the
earnings per share calculations of the Company. The Company has filed a motion
for summary judgment asking the Court to dismiss the action and the court has
denied that motion.

         On January 8, 2002, the Michigan Department of Environmental Quality
("MDEQ") sent the Company a letter alleging responsibility for trichloroethylene
("TCE") contamination at a Ferndale, Michigan, industrial site that Advanced
Friction Materials Company ("AFM") leased from 1974 to 1985. The Company
acquired AFM in 1998. The Company is cooperating with the MDEQ in evaluating the
subsurface of the site to obtain data concerning the alleged contamination. The
Company's liability at this site is indeterminable at this time.

         On April 22, 2003, Automation by Design, Inc. filed a civil action
against RPC in U.S. District Court for the Southern District of Indiana. The
complaint alleges copyright infringement and breach of contract in connection
with RPC's purchase of certain equipment. In answer to plaintiff's compliant,
RPC has denied liability and has filed counterclaims for breach of contract and
declaratory judgment. On October 22, 2003, Automation by Design filed a motion
to amend its complaint to include Raytech Corporation and Production Design
Services, Inc. as defendants. RPC has agreed to defend and indemnify Production
Design Services, Inc., which is manufacturing certain equipment for RPC.


                                      -19-
<PAGE>

Note G, continued


         The IDEM conducted a site review in May 2003 at the Crawfordsville,
Indiana, facility of RPC. In July 2003, IDEM sent RPC a report of such
inspection. This report stated that IDEM believes that RPC has violated certain
environmental law requirements. The IDEM report stated that the agency intends
to notify enforcement authorities but did not specify any fines for the alleged
violations. In November 2003, the Company received a Notice of Violation and
Proposed Agreed Order relating to the May 2003 inspection. The draft order
proposes penalties of $67 thousand. The Company will be reviewing the Notice and
will respond to IDEM within the next 60 days. The Company has not recorded a
charge for this potential liability in the quarter ended September 28, 2003.


Note H - Restricted Cash

         Restricted cash relates to the following:

                                     September 28, 2003   December 29, 2002
                                     ------------------   -----------------
                                        (Unaudited)
         Payable to the Trust              $3,182                $  -
         Letters of credit                  1,628                 1,617
         Other                                 53                   410
                                            -----                 -----
                                           $4,863                $2,027
                                            =====                 =====

         The letters of credit collateralize certain obligations relating
primarily to workers' compensation.


Note I - Revision of Interim Financial Statements

         The accompanying condensed unaudited consolidated statements of
operations for the thirteen and thirty-nine weeks ended September 29, 2002, and
the condensed unaudited consolidated statements of cash flows and of changes in
shareholders' equity, as well as the accompanying notes, have been revised from
those previously reported to reflect lower depreciation expense and the related
tax effects.

         The Company determined subsequent to the filing of the Form 10-Q for
the quarter ended September 29, 2002, that depreciation expense had been
overstated in both the second quarter filing, at June 30, 2002, by $475 and in
the third quarter filing, at September 29, 2002, by $368. The quarterly
reporting herein reflects the corrected amounts for the thirteen and thirty-nine
weeks ended September 29, 2002.

         The effect of this revision is as follows:


                                      -20-
<PAGE>

Note I, continued,

                                For the 13 Weeks Ended   For the 39 Weeks Ended
                                  September 29, 2002       September 29, 2002
                                  ------------------       ------------------
                                As Previously    As      As Previously    As
                                   Reported    Revised     Reported     Revised
                                   --------    -------     --------     -------
                                                   (Unaudited)

Net sales                         $ 51,740    $ 51,740    $159,754     $159,754
Gross profit                         8,198       8,566      29,334       30,177
Income before provision for
  environmental claims, income
  taxes and minority interest          229         597       4,918        5,761
Net loss                            (3,428)     (3,189)     (1,320)        (789)
Basic loss per share                  (.08)       (.08)       (.03)        (.02)
Diluted loss per share                (.08)       (.08)       (.03)        (.02)
Accumulated deficit                 (6,897)     (6,366)     (6,897)      (6,366)


Note J - Debt

         In September 2003, the Company and the domestic lender, per the
agreement, exercised a one-year extension of the borrowing agreement. The
Company entered into a new three-year agreement with the lender in November 2003
on terms and conditions similar to the original agreement. Additionally, in
October 2003, the Company entered into a new loan agreement with a new domestic
lender for $7.0 million priced at 1.65 basis points over LIBOR with a five-year
term. The proceeds from this new facility will be used to pay environmental
costs and pension costs.


Note K - Other Income, Net

         During the thirteen-week period ended September 28, 2003, the Company
recognized income of $23.7 million related to the reduction of the deferred
payable to the Raytech Personal Injury Trust as a result of the establishment of
a valuation allowance of an equal amount against the deferred tax asset that
will inure to the benefit of the Trust in accordance with the Tax Assignment and
Assumption Agreement. See Note E - Income Taxes for more details.



                                      -21-
<PAGE>


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


         In preparing the discussion and analysis required by the Federal
securities laws, it is presumed that users of the interim financial information
have read or have access to the discussion and analysis for the preceding fiscal
year.

         As further discussed in Note I to the condensed unaudited consolidated
financial statements, amounts relating to the thirteen and thirty-nine weeks
ended September 29, 2002, have been revised from those previously reported to
reflect lower depreciation expenses and the related tax effects.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995:
--------------------------------------------------------------------------------

         Statements in this "Management's Discussion and Analysis" relating to
management's views of trends, the effects of changing prices, plans, objectives
and other matters for future operating periods are "forward looking statements"
as defined in the Private Securities Litigation Reform Act of 1995. These
forward looking statements are subject to significant risks and uncertainties
that could cause actual results to differ materially from the results in the
statements. Forward looking statements relating to the Company's businesses are
based on assumptions concerning certain factors that are not predictable and are
subject to change. These factors include general economic conditions, worldwide
demand for automotive and heavy duty vehicles, consumer confidence, actions of
the Company's competitors, vendors and customers, factors affecting the
Company's costs such as labor relations and environmental compliance and
remediation, interest and foreign currency exchange rates, technological issues,
accounting standards, and the risks set forth in the section entitled "Risk
Factors" below and in the Company's Report on Form 10-K. The Company has no
obligation to update its forward looking statements.

Risk Factors
------------

         The Company's businesses are subject to certain risks, including but
not limited to those described below, that could cause material changes in its
results of operations or financial condition in the future.

         o        The Company's businesses are greatly affected by general
                  economic conditions. The Company sells components to the
                  automotive and heavy duty equipment industries and in large
                  part is dependent upon consumer demand for automobiles,
                  consumer confidence and business investment in heavy
                  equipment. The Company's businesses sell components for
                  transmissions and brakes to automotive and heavy duty original
                  equipment manufacturers (OEMs) as well as the automotive
                  aftermarket. The economic slowdown and recession of the last
                  three years have resulted in reduced heavy equipment and
                  passenger vehicle production in the United States and in
                  foreign markets and reduced demand in the aftermarket. It is
                  possible that OEM vehicle and equipment production will not
                  increase significantly in 2004 and future years. Continuation
                  of the economic slowdown may adversely affect the Company's
                  revenues in all of its business segments.

         o        The Company's customers are large companies under pressure to
                  cut component costs. The Wet Friction segment's largest
                  customers are experiencing margin erosion due to reduced
                  volume, high labor costs and intense foreign competition. The
                  Company is a relatively small supplier of a limited number of
                  components. Due to their size, the Company's customers are
                  often able to demand component price reductions from their

                                      -22-
<PAGE>

                  suppliers. These customers may also demand technological
                  changes and quality improvements at the Company's expense. In
                  addition, the trend in the automotive aftermarket is toward
                  longer transmission service and replacement cycles due to
                  improved quality. If foreign automotive manufacturers continue
                  to take U.S. market share from the Company's domestic OEM
                  customers and economic conditions do not improve
                  significantly, the Company's revenues will continue to be
                  adversely affected by these factors.

         o        The Company is subject to substantial environmental
                  remediation obligations for past contamination that are not
                  yet fixed in scope or amount. The nature of environmental
                  contamination and its remediation are such that the amount and
                  nature of work necessary is often unknown until late in the
                  process. The level of responsibility of the parties involved
                  and the level of remediation to be required by governmental
                  authorities is also uncertain. The Company also incurs
                  substantial ongoing environmental compliance costs in
                  operating its production facilities. Substantial unanticipated
                  environmental costs could adversely affect profitability. (See
                  "Provision for Environmental Claims" below and Note G -
                  Litigation.)

Significant Accounting Policies
-------------------------------

         Preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. Management believes the most complex and
sensitive judgments, because of their significance to the consolidated financial
statements, result primarily from the need to make estimates about the effects
of matters that are inherently uncertain. Management's Discussion and Analysis
and Note 1 to the Consolidated Financial Statements in the Company's Form 10-K
for fiscal 2002 describe the significant accounting estimates and policies used
by management in the preparation of the consolidated financial statements. In
addition to the significant accounting policies and estimates disclosed in the
Form 10-K, the assessment of the amount of the Company's deferred tax assets
which will be realizable requires the use of significant judgments and
estimates. In making its assessment, the Company evaluates all relevant
evidence, including current industry dynamics within which the Company operates,
to determine if it would be able to realize all or a part of its deferred tax
assets in the future. Should the Company determine that it would not be able to
realize certain of its deferred tax assets, a valuation allowance would be
recorded in the period such a determination is made. Actual results in these
areas could differ from management's estimates. There have been no changes in
the Company's process for evaluating critical accounting estimates during the
thirty-nine-week period ended September 28, 2003.

Results of Operations and Liquidity and Capital Resources
---------------------------------------------------------

         Raytech Corporation recorded a net loss for the thirteen-week period
ended September 28, 2003 of $17.1 million or $.41 loss per basic and diluted
share compared to a net loss of $3.2 million or $.08 loss per basic and diluted
share in the same period in the prior year. The reduction in earnings is due to
lower gross profits in the Wet Friction segment of the business and certain
environmental charges taken in the quarter. The details of the above are more
fully explained in the Management's Discussion and Analysis of this report and
in Note G to the unaudited condensed consolidated financial statements. In
addition, the Company recorded a tax provision of $32.1 million for the
thirteen-week period ended September 28, 2003, which reflects the concern over
future recoverability of certain deferred tax assets, as more fully explained in
Note E. The establishment of the valuation allowance includes a provision of
$23.7 million against deferred



                                      -23-
<PAGE>

income tax assets that inure to the benefit of the Raytech Personal Injury Trust
in accordance with the Tax Assignment and Assumption Agreement. As a result, the
deferred payable to the Trust was reduced by an equal amount which was recorded
in other income, net. The Company recorded a net loss for the thirty-nine-week
period ended September 28, 2003 of $18.7 million or $.45 per basic and diluted
share compared to a net loss of $.8 million or $.02 loss per basic and diluted
share for the same period in the prior year. The increased loss reflects lower
gross profits and additional environmental charges taken in the current period.
In addition, the Company recorded a tax provision of $31.7 million for the
thirty-nine-week period ended September 28, 2003, which reflects the concern
over future recoverability of certain deferred tax assets, as more fully
explained in Note E. The details of the above results are presented below.

Net Sales
---------

         Raytech recorded net sales of $47.9 million for the thirteen-week
period ended September 28, 2003 compared to $51.7 million for the same period in
the prior year, a decrease of $3.8 million or 7.4 percent. The Company recorded
net sales of $157.7 million for the thirty-nine-week period ended September 28,
2003 compared to $159.8 million for the same period in the prior year, a
decrease of $2.1 million or 1.3 percent. An analysis, by segment, of the change
in sales for the thirteen-week- and thirty-nine-week periods are presented
below.

         The Wet Friction segment recorded sales of $28.0 million for the
thirteen-week period ended September 28, 2003 compared to $33.6 million for the
same period in the prior year, a decrease of $5.6 million or 16.7 percent. The
reduced sales reflect lower sales to the heavy duty component of this segment of
$1.2 million during the quarter, lower sales to the automotive OEM component of
the segment of $2.9 million and lower sales in the European component of this
segment of $1.5 million. The reduced sales reflect lower demand for our
customers' products due primarily to the poor economy here in the United States
and in Europe. In addition, competitive pressures have caused both lower pricing
and in some instances a loss of business compared to the prior year. The net
sales for the thirty-nine-week period ended September 28, 2003 of $96.4 million
compares to $105.3 million for the same period in the prior year, a decrease of
$8.9 million or 8.5 percent. The decrease is primarily due to lower sales during
the thirty-nine-week period to the heavy duty component of this segment of $4.4
million, lower sales to the Automotive OEM component of the segment of $2.8
million and lower sales in the European component of the segment of $1.4
million. As noted above, the lower sales reflect lower demand for our customers'
products due principally to poor economic conditions here in the United States
and in Europe. Also, as noted above, competitive pressures have caused both
lower pricing and in some instances loss of business compared to the prior year.

         The Aftermarket segment recorded net sales of $11.4 million for the
thirteen-week period ended September 28, 2003 compared to $11.0 million for the
same period in the prior year, an increase of $.4 million or 3.6 percent. The
net sales for the thirty-nine-week period ended September 28, 2003 of $34.2
million compares to $35.6 million for the same period in the prior year, a
decrease of $1.4 million or 3.9 percent. The improved sales for the
thirteen-week period is due to increased demand from the Company's customer base
but does not reflect an overall economic improvement in the aftermarket for the
Company's products. The results for the thirty-nine-week period represent the
lower demand from the aftermarket and reflects the overall reduced demand for
the aftermarket for transmission products. This lower demand reflects the impact
of improved OEM quality and longevity with regard to the transmission component.



                                      -24-
<PAGE>

         The Dry Friction segment recorded net sales of $10.6 million for the
thirteen-week period ended September 28, 2003 compared to $9.5 million for the
same period in the prior year, an increase of $1.1 million or 11.6 percent. The
increased sales for the quarter reflect higher sales recorded through the
European operation and are due substantially to translation gains compared to
the prior year. The sales recorded in local currency are at the same level as in
the same period in the prior year. The net sales for the thirty-nine-week period
ended September 28, 2003 of $33.7 million compares to $26.0 million for the same
period in the prior year, an increase of $7.7 million or 29.6 percent. The
increase for the thirty-nine-week period is due to volume increases through the
operation in China of $1.8 million and increases through the European operations
of $5.9 million. The increase in Europe is due to a volume increase of $1.9
million and translation gains of $4.0 million for the period.

Gross Profit
------------

         Raytech recorded gross profit of $5.5 million for the thirteen-week
period ended September 28, 2003 compared to $8.6 million for the same period in
the prior year, a decrease of $3.1 million. The gross profit percentage for the
current thirteen-week period of 11.6 percent compares to the gross profit
percentage of 16.6 percent for the same period in the prior year. The decline in
gross margin reflects reduced margins in the Wet Friction segment in 2003, which
recorded a gross margin percentage of 4.4 percent for the thirteen-week period
ended September 28, 2003 compared to 13.1 percent in the same period in 2002.
The gross profit percentages for the Aftermarket and Dry Friction segments of
25.9 percent and 26.1 percent, respectively, remained consistent compared to the
same period in the prior year. The lower gross profit in the Wet Friction
segment reflects the impact of the $5.6 million in lower sales and higher
production costs. The Company developed a series of additional cost reduction
programs in the second quarter of 2003 aimed at addressing the impact of the
lower sales in the Wet Friction segment. The overall programs established cost
reductions on an annual basis of $11.4 million, which are being implemented over
the next few quarters. Specifically identified cost reduction programs targeted
and achieved $2.4 million in cost reductions for the thirty-nine-week period
ended September 28, 2003 in the Wet Friction segment. An additional $1.7 million
is targeted for the fourth quarter of 2003. The gross profit for the
thirty-nine-week period of $22.6 million compares to $30.2 million for the same
period in the prior year, a decrease of $7.6 million. The gross profit
percentage for the 2003 period of 14.3 percent compares to 18.9 percent for the
same period in 2002. The decline reflects the lower gross profit in the Wet
Friction segment compared to 2002 results. The Wet Friction gross margin
percentage for the thirty-nine-week period ended September 28, 2003 was 7.7
percent compared to 15.4 percent in the same period in 2002. The cost reduction
programs outlined above, which were implemented in the third quarter of 2003,
have helped offset the impact of the $8.9 million in lower sales in the Wet
Friction segment year-to-date. This equates to $8.8 million in lower margin
during the current period. The gross margin percentage for the Aftermarket and
Dry Friction segments of 28.0 percent and 27.7 percent approximate the same
percentages in the 2002 period.

Selling, General and Administrative
-----------------------------------

         The selling, general and administrative expenses for the thirteen-week
period ended September 28, 2003 of $8.4 million compares to $8.0 million for the
same period in the prior year, an increase of $.4 million. The increased costs
are attributable to the Dry Friction segment and the increased SG&A costs
associated with the increased sales volume in the 2003 quarter compared to 2002.
The SG&A expenses for the thirty-nine week period ended September 28, 2003 of
$25.2 million compared to $23.7 million for the same period in the prior year,
an increase of $1.5 million. The year-to-date increase reflects higher costs in
the Dry Friction segment of $1.3 million due to increased sales volume and
additional product development costs during the period. In addition, the Wet
Friction segment


                                      -25-
<PAGE>

reported $.7 million of increased costs due in part to severance and new hire
costs, additional research and development staffing and transportation costs for
new business in Europe. The above was offset by lower costs of $.5 million in
the Aftermarket segment and Corporate.

Interest
--------

         Interest expense for the thirteen-week period ended September 28, 2003
of $.2 million compares to $.3 million for the same period in the prior year, a
decrease of $.1 million. Interest expense for the thirty-nine-week period ended
September 28, 2003 of $.8 million compares to the same amount in the same period
in the prior year. There have been no significant changes in interest expense
during the thirteen-week period or the thirty-nine-week period.

Operating Profits
-----------------

         The following discussion of operating results by industry segment
relates to information contained in Note D - Segment Reporting to the Unaudited
Condensed Consolidated Financial Statements. Operating profit is income before
provision for environmental claims, income taxes and minority interest.

         Raytech Corporation recorded an operating loss of $3.1 million for the
thirteen-week period ended September 28, 2003 compared to operating income of
$.6 million in the same period in the prior year, a decrease of $3.7 million.
The lower operating profits are due to the impact of the reduced sales for the
thirteen-week period of $3.8 million, which contributed to lower gross margin of
$3.1 million, higher SG&A costs of $.4 million and lower other income of $.3
million. The Company recorded an operating loss for the thirty-nine-week period
ended September 28, 2003 of $2.8 million compared to operating income of $5.8
million for the same period in the prior year, a decrease of $8.6 million. The
decrease is due to the impact of lower sales of $2.1 million, which contributed
to lower gross profit of $7.6 million, higher SG&A costs of $1.5 million and to
a lesser extent a change in other income expense. The changes in gross profit
and SG&A are detailed in those sections of this MD&A so labeled. Additional
information relating to operating profit changes are detailed below by segment.

         The Wet Friction segment recorded an operating loss of $2.8 million for
the thirteen-week period ended September 28, 2003 compared to operating income
of $.7 million for the same period in the prior year, a decrease of $3.5
million. The change in operating profit was due substantially to lower gross
profit of $3.2 million. The lower gross profit is due to lower sales
period-over-period of $5.6 million and the impact on production and overhead
costs associated with the lower sales. The Company's goal is to maintain a
relationship between reduced sales and reduced operating profit where for every
dollar of reduced sales the operating profit is reduced $.40. During the first
six months of 2003, operating income was reduced $1.88 for each dollar of sales
reduction. In the thirteen-week period ended September 28, 2003, that
relationship improved to $.62 reduction in operating profit for each dollar of
sales reduction. The impact of the cost reduction programs were a significant
element in improving the relationship. The operating loss for the
thirty-nine-week period ended September 28, 2003 of $5.2 million compares to
operating profit of $4.4 million in the same period in the prior year, a
decrease of $9.6 million. The sales for the period are lower than the prior year
period by $8.9 million, which was the most significant factor in the reduced
gross profit of $8.8 million. In addition to the impact of the lower sales on
production, overhead costs also contributed to the reduced gross margin. The
SG&A costs for both the thirteen-week and thirty-nine-week periods are detailed
under the SG&A heading.


                                      -26-
<PAGE>

         The Aftermarket recorded operating profit of $1.6 million for the
thirteen-week period ended September 28, 2003 compared to an operating profit of
$1.4 million for the same period in the prior year, an increase of $.2 million.
The increased operating profits reflect the impact of the improved sales of $.4
million and lower SG&A costs. The operating profit for the thirty-nine-week
period ended September 28, 2003 of $5.9 million compared to $6.2 million for the
same period in the prior year, a decrease of $.3 million. The decrease in
operating profit reflects the impact of $1.4 million in lower sales
period-over-period. The impact of lower sales was offset by lower SG&A costs of
$.2 million.

         The Dry Friction segment recorded operating profit of $.7 million for
the thirteen-week period ended September 28, 2003 compared to $.9 million for
the same period in the prior year, a decrease of $.2 million. As noted in the
Net Sales analysis, sales increased period-over-period $1.1 million, which
provided increased gross margin of $.3 million. These improvements were offset
by higher SG&A costs of $.4 million and other expenses of $.1 million. The SG&A
cost increase is explained in that section of this MD&A analysis. The operating
profit for the thirty-nine-week period ended September 28, 2003 of $3.6 million
compares to operating profit of $1.9 million for the same period in the prior
year, an increase of $1.7 million. The increase is due to increased sales
period-over-period of $7.7 million from both the European and Asian components
of this segment. The improved operating profits include translation gains of
$4.5 million for the thirty-nine-week period relating to the European
operations.

Other Income, Net
-----------------

         During the thirteen-week period ended September 28, 2003, the Company
recognized income of $23.7 million related to the reduction of the deferred
payable to the Raytech Personal Injury Trust as a result of the establishment of
a valuation allowance of an equal amount against the deferred tax asset that
will inure to the benefit of the Trust in accordance with the Tax Assignment and
Assumption Agreement. See Note E - Income Taxes for more details.

Provision for Environmental Claims
----------------------------------

         The Company recorded a provision in the second quarter of 2003 of $1.8
million for expected final remediation and administrative costs associated with
compliance with the EPA Unilateral Administrative Order, which is discussed in
Note G of this report. The work required under the Order has been completed at
this time and a final report, which documents the compliance actions, has been
filed with the EPA. During the thirteen-week period ended June 29, 2003, the
cost of contaminated soil removal increased over the previously accrued amount
by $1.6 million due to changes in the tonnage required to be removed in order to
comply with the Order compared to the estimate. In addition, the EPA has
estimated the administrative charge for the agency's oversight of the execution
of the Order will be approximately $.4 million. The final determination of this
cost will occur when the EPA accepts the final report from the environmental
engineering firm. Also, during the quarter, the Company settled a disputed
billing amount, which arose in the first stage of the project from the
construction company hired to do the initial cleanup. The resolution of the
dispute resulted in a reduction of $.2 million of amounts previously recorded by
the Company. The construction company was replaced prior to the completion of
the first stage.

         Although the Company has, to the best of its knowledge, complied fully
with the Order issued by the EPA, there exists the potential for additional
remediation. Further, the Company may be required to remediate additional
contiguous parcels of property not subject to the Order, subject to potential
future actions taken by the EPA. The Company has recorded a provision in the
third quarter of 2003 of $2.4 million as its current estimate of the potential
cost to remediate the additional contiguous parcels of property not subject to
the Order as noted above. The estimate of cost noted above is based on
preliminary engineering data at a level of compliance similar to the
requirements contained in the order. The Company is


                                      -27-
<PAGE>

currently negotiating a settlement with the EPA for future remediation on this
site. The outcome of the negotiation could also impact the estimated cost noted
above.

         On May 15, 2001, the United States Environmental Protection Agency
("EPA") issued a Pre-filing Notice and Opportunity to Confer to Raybestos
Products Company ("RPC"). This notice stated that EPA is contemplating filing a
civil action against RPC for violations of various environmental statutes and is
offering RPC the opportunity to participate in pre-filing negotiations to
resolve this matter before initiation of litigation. EPA stated that it has
reason to believe that RPC committed violations of the Clean Air Act, Clean
Water Act, Resource Conservation and Recovery Act, and Toxic Substances Control
Act and that RPC could be subject to substantial penalty. The Company had
previously recorded a $.3 million provision for settlement of these violations.
By letter dated September 3, 2003, EPA stated that penalties for violations
alleged in the Pre-filing Notice could total approximately $180 million and
suggested that the parties resolve the Pre-filing Notice claims as follows: RPC
should pay approximately $2.4 million and undertake compliance activities,
onsite investigative work that EPA estimated would cost approximately $1
million, and corrective action to resolve the Pre-filing Notice, with no
estimate of such cost of corrective action. The parties have not yet begun
formal negotiation of this EPA proposal. The Company has recorded a provision in
third quarter of 2003 for $3.1 million based on the Notice.

         The IDEM conducted a site review in May 2003 at the Crawfordsville,
Indiana, facility of RPC. In July 2003, IDEM sent RPC a report of such
inspection. This report stated that IDEM believes that RPC has violated certain
environmental law requirements. The IDEM report stated that the agency intends
to notify enforcement authorities but did not specify any fines for the alleged
violations. In November 2003, the Company received a Notice of Violation and
Proposed Agreed Order relating to the May 2003 inspection. The draft order
proposes penalties of $67 thousand. The Company will be reviewing the Notice and
will respond to IDEM within the next 60 days. The Company has not recorded a
charge for this potential liability in the quarter ended September 28, 2003.

Income Taxes
------------

         See Note E - Income Taxes to the condensed unaudited consolidated
financial statements included in Item 1 of this Part I. See the discussion which
follows concerning pension payments and environmental payments.

Liquidity, Capital Resources and Future Liquidity
-------------------------------------------------

         The Company's cash and cash equivalents at September 28, 2003 totaled
$11.6 million compared to $20.0 million at December 29, 2002, a decrease of $8.4
million. Capital expenditures for the thirty-nine-week period totaled $6.9
million which is consistent with planned expenditures and approximates capital
spending for the same period in the prior year. Net cash provided by operating
activities was $1.9 million for the thirty-nine-week period ended September 28,
2003, compared to cash provided by operating activities of $9.8 million in the
prior year period. Cash inflows for other operating activities were $6.7 million
during the current year period, which was primarily comprised of an increase in
restricted cash of $2.8 million, a decrease in deferred income tax of $6.3
million, as more fully explained in Note E, an increase in accrued liabilities
of $3.3 million, and a decrease in other long-term liabilities of $3.8, and a
$4.2 million decrease in an income tax receivable for the PI Trust.

         The debt and available lines of credit at September 28, 2003 and
December 29, 2002 consist of the following:





                                      -28-
<PAGE>


<TABLE>
<CAPTION>
                                          (in thousands)
                       September 29, 2003 (Unaudited)        December 29, 2002
                       -----------------------------   -----------------------------
                       Current  Non-Current    Total   Current  Non-Current    Total
                       -------  -----------    -----   -------  -----------    -----

<S>                  <C>        <C>         <C>       <C>       <C>         <C>
Domestic bank debt   $  8,656   $     -     $  8,656  $ 11,306  $    -      $ 11,306
Foreign bank debt       3,244       4,072      7,316     3,609     4,095       7,704
                       ------       -----     ------    ------     -----      ------
Total bank debt        11,900       4,072     15,972    14,915     4,095      19,010
Leases                    158         161        319       176       198         374
                       ------       -----     ------    ------     -----      ------

Total borrowings     $ 12,058    $  4,233   $ 16,291  $ 15,091  $  4,293    $ 19,384
                       ======       =====     ======    ======     =====      ======
</TABLE>

Available lines of credit:
                                        2003              2002
                                        ----              ----

Domestic                             $ 5,787           $ 5,006
Foreign                                3,842             3,829
                                       -----             -----

Total                                $ 9,629           $ 8,835
                                       =====             =====

         Refer to the Management's Discussion and Analysis section and to Note M
to the consolidated financial statements, both included within the Company's
2002 Form 10-K, for information regarding the Company's obligations and
commitments by year. These obligations and commitments consist of long-term
debt, capital leases and rental agreements.

         The current domestic loan agreement has a covenant requiring the
borrowing companies to maintain a minimum rolling twelve-month earnings before
interest, taxes, depreciation and amortization (EBITDA).

         The Company's domestic borrowing facility matured in September 2003.
The Company and the lender agreed, in accordance with the borrowing agreement,
to extend the facility for one year. The Company and the lender in November 2003
entered into a new three-year agreement under similar terms and conditions as
were included in the prior agreement. In addition, in October 2003, the Company
entered into a new credit facility with another lender for $7.0 million with a
five-year term based on 1.65 basis points over LIBOR. The proceeds from this new
facility will be used to pay environmental costs and pension costs. During the
second quarter, the Dry Friction segment renegotiated its borrowing agreement in
China, lowering the interest rate 3.9 percentage points on the borrowings of
$1.5 million. In addition, the German subsidiary reduced its borrowing rate on
$1.0 million in borrowings by 2.1 percentage points during the second quarter.

         The Company is complying with a Federal Order issued by the U.S.
Environmental Protection Agency ("EPA") at its manufacturing facility in
Crawfordsville, Indiana. See Note G - Litigation. The Company paid $5.7 million
during the thirty-nine weeks ended September 28, 2003 and has a remaining
accrual of $5.6 million for completion of the project, which is included in
other accrued liabilities. The Company recorded an additional provision of $5.5
million in the thirteen-week period ended September 28, 2003. Refer to
"Provision for Environmental Claims" on page 25 for further discussion.

         The Company assumed the liability for the Raymark pension plans as part
of the Chapter 11 reorganization. Funding for the plans in 2003 is expected to
be approximately $7.6 million of which $5.7 million was funded during the
thirty-nine-week period of 2003 compared to $4.9 million in the same period in
the prior year.

         Certain tax issues are discussed in Note E - Income Taxes, which
provide details concerning the status of the current Internal Revenue Service
audit and the use of certain future tax benefits.


                                      -29-
<PAGE>

         Management believes that existing cash balances, the Company's new
lending facility, the renegotiation of the current lending facility and cash
flow from operations during 2003 will be sufficient to meet all of the Company's
obligations arising in the normal course of business, including anticipated
capital investments.

Financial Risks
---------------

         The Company maintains lines of credit with United States and foreign
banks, as well as other creditors. The Company is naturally exposed to various
interest rate risk and foreign currency risk in its normal course of business.

         The Company effectively manages its accounts receivable as evidenced by
the average days sales in trade receivables of 50 days. This allows for reduced
borrowings in supporting inventory and trade receivables. Management does not
anticipate a significant change in fiscal policy in any of its borrowing markets
in 2003 given current economic conditions. Further, the Company can reduce the
short-term impact of interest rate fluctuation through deferral of capital
investment should the need arise.

         The local currencies of the Company's foreign subsidiaries have been
designated as their functional currencies. Accordingly, financial statements of
foreign operations are translated using the exchange rate at the balance sheet
date for assets and liabilities, historical exchange rates for elements of
stockholder's equity and an average exchange rate in effect during the period
for revenues and expenses. Where possible, the Company attempts to mitigate
foreign currency translation effects by borrowing in local currencies to fund
operations. The Company does not believe that the fluctuation in foreign
currency will have a material adverse effect on the Company's overall financial
condition. Additionally, the Company does not enter into agreements to manage
any currency transaction risks due to the immaterial amount of transactions of
this type. The impact of the translation between the Euro and the U.S. dollar
are detailed in the net sales section of Item 2 of the Management's Discussion
and Analysis of Financial Condition and Results of Operations. See Note A -
Summary of Significant Accounting Policies in the Notes to Condensed
Consolidated Financial Statements for a discussion of new accounting
pronouncements during the period.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         See Item 2.


Item 4. Controls and Procedures

     (a)   Based on evaluation of the effectiveness of the design and
           operation of the Company's disclosure controls and procedures,
           which evaluation was made under the supervision and with the
           participation of management, including the Company's principal
           executive officer and principal financial officer, the
           Company's principal executive officer and princi- pal
           financial officer have each concluded that such disclosure
           controls and procedures are effective in ensuring that
           information required to be disclosed by the Company in reports
           that it files under the Exchange Act is recorded, processed,
           summarized and reported within the time periods specified in
           Securities and Exchange Commission rules and forms.

     (b)   There has been no change during the thirteen weeks ended
           September 28, 2003 in the Company's internal controls over
           financial reporting that has materially affected, or is
           reasonably likely to materially affect, the Company' internal
           control over financial reporting.




                                      -30-
<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         See Note G - Litigation.


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              31.1 Section 302 Certification of the Chief Financial Officer
              31.2 Section 302 Certification of the Chief Executive Officer

         (b)  Reports on Form 8-K

              None




                                      -31-
<PAGE>



                                    SIGNATURE


         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.

                                   RAYTECH CORPORATION


                                   By: /s/JOHN B. DEVLIN
                                       ------------------------
                                       John B. Devlin
                                       Vice President, Treasurer
                                       and Chief Financial Officer

Date: November 14, 2003



                                      -32-