<PAGE>

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

                                   FORM 10-Q
(mark one)

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

               For the quarterly period ended April 26, 1998 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: 333-24939
                             THE FONDA GROUP, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                            13-3220732
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                           Identification Number)

                             2920 NORTH MAIN STREET
                            OSHKOSH, WISCONSIN 54901
                                 (920) 235-1036
   (Address and telephone number of registrant's principal executive offices)


         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. 
         Common Stock $.01 par value as of June 1, 1998:             100 Shares




                                       1
<PAGE>


                             THE FONDA GROUP, INC.
                         QUARTERLY REPORT ON FORM 10-Q
                               TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION



<TABLE>
<CAPTION>
<S>                                                                                    <C>
Item 1. Financial Statements (unaudited):                                               Page

          Balance Sheets as of April 26, 1998 and July 27, 1997 (audited)                3

          Statements of Income for the three and nine months ended April 26, 1998 
          and April 27, 1997                                                             4

          Statements of Cash Flows for the nine months ended April 26, 1998
          and April 27, 1997                                                             5

          Notes to Financial Statements                                                  6


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


PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K                                               15

SIGNATURES                                                                              16
</TABLE>












                                       2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                             THE FONDA GROUP, INC.
                                 BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>

                                                                               APRIL 26,           JULY 27,
                                                                                 1998                1997
                                                                           ---------------    ----------------
                                                                            (unaudited)
<S>                                                                               <C>                 <C>    
ASSETS
Current assets:
    Cash                                                                          $ 3,655             $ 5,908
    Accounts receivable, less allowance for doubtful
      accounts of $569 and $961, respectively                                      26,751              30,009
    Due from affiliates                                                             5,920               1,207
    Inventories                                                                    38,450              40,834
    Deferred income taxes                                                           6,855               6,780
    Refundable income taxes                                                             -               1,657
    Other current assets                                                            1,212               4,178
                                                                           ---------------    ----------------
         Total current assets                                                      82,843              90,573
Property, plant and equipment, net                                                 48,907              59,261
Goodwill, net                                                                      22,047              15,405
Other assets, net                                                                  24,877              14,365
                                                                           ---------------    ----------------
                                                                                $ 178,674           $ 179,604
                                                                           ===============    ================

LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
   Accounts payable                                                              $ 11,634             $ 7,340
   Accrued expenses                                                                21,706              24,611
   Current maturities of long-term debt                                               466                 619
                                                                           ---------------    ----------------
      Total current liabilities                                                    33,806              32,570
Long-term debt                                                                    122,443             122,368
Other liabilities                                                                   1,676               1,436
Deferred income taxes                                                               7,368               6,144
                                                                           ---------------    ----------------
      Total liabilities                                                           165,293             162,518
Redeemable common stock, $.01 par value, 7,000 shares issued,
   6,500 shares outstanding at July 27, 1997                                            -               2,076
Stockholders equity                                                                13,381              15,010
                                                                           ===============    ================
                                                                                $ 178,674           $ 179,604
                                                                           ===============    ================
</TABLE>

                                         See notes to financial statements.





                                       3
<PAGE>

                             THE FONDA GROUP, INC.
                              STATEMENTS OF INCOME
                                  (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED                      NINE MONTHS ENDED
                                          -------------------------------      ------------------------------------
                                              APRIL 26,        APRIL 27,           APRIL 26,           APRIL 27,
                                                1998             1997                1998                1997
                                          --------------    -------------      ---------------   ------------------
<S>                                            <C>              <C>                  <C>                 <C>      
Net sales                                      $ 66,923         $ 60,165             $203,597            $ 184,544
Cost of goods sold                               56,494           48,742              167,520              148,820
                                          --------------    -------------      ---------------   ------------------
     Gross profit                                10,429           11,423               36,077               35,724
Selling, general and
  administrative expenses                         8,671            7,699               26,003               24,128
Other income, net                                (9,099)               -               (9,566)                   -
                                          --------------    -------------      ---------------   ------------------
     Income from operations                      10,857            3,724               19,640               11,596
Interest expense, net                             3,148            2,257                9,151                6,798
                                          --------------    -------------      ---------------   ------------------
     Income before income taxes                   7,709            1,467               10,489                4,798
Provision for income taxes                        3,238              616                4,406                2,015
                                          --------------    -------------      ---------------   ------------------
     Income before extraordinary
       expense                                    4,471              851                6,083                2,783
Extraordinary expense, net                            -            3,495                    -                3,495
                                          ==============    =============      ===============   ==================
     Net income (loss)                          $ 4,471         $ (2,644)             $ 6,083               $ (712)
                                          ==============    =============      ===============   ==================
</TABLE>


                       See notes to financial statements.


                                       4
<PAGE>




                             THE FONDA GROUP, INC.
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     NINE MONTHS ENDED
                                                                              ---------------------------------
                                                                                 APRIL 26,         APRIL 27,
                                                                                   1998              1997
                                                                              --------------    ---------------
<S>                                                                                 <C>                 <C>    
Operating activities:                                                          
 Net income (loss)                                                                  $ 6,083             $ (712)
Adjustments to reconcile net income (loss) to net cash
    cash provided by operating activities:
   Depreciation and amortization                                                      4,153              3,475
   Amortization and write-off of debt issuance costs                                    413              2,634
   Elimination of unamortized debt discount                                               -              2,108
   Provision for doubtful accounts                                                      113                 99
   Deferred income taxes                                                              1,051               (910)
   Gain on business disposition                                                      (9,325)                 -
   Gain on sale of equipment                                                           (446)                 -
   Interest capitalized on debt                                                           -                684
   Changes in assets and liabilities (net of
     business acquisitions and disposition):
      Accounts receivable                                                             2,153             (3,973)
      Due from affiliates                                                            (4,713)               994
      Inventories                                                                     1,673             (3,131)
      Income taxes payable/refundable                                                 3,218             (1,320)
      Other current assets                                                            2,885                160
      Accounts payable and accrued expenses                                            (434)               466
      Other                                                                            (482)               105
                                                                              --------------    ---------------
    Net cash provided by operating activities                                         6,342                679
                                                                              --------------    ---------------

Investing activities:
 Capital expenditures                                                                (6,245)            (3,469)
 Proceeds from business disposition                                                  20,843                  -
 Proceeds from sale of equipment                                                        574                  -
 Payments for business acquisitions                                                  (6,901)            (3,416)
 Payment for Management Services Agreement                                           (7,000)                 -
 Note receivable from affiliate                                                           -             (2,600)
                                                                              --------------    ---------------
   Net cash provided by (used in) investing activities                                1,271             (9,485)
                                                                              --------------    ---------------

Financing activities:
 Net increase (decrease) in revolving credit borrowings                                 390            (32,842)
 Proceeds from long-term debt                                                             -            120,000
 Repayments of long-term debt                                                          (468)           (50,989)
 Acquisition of common stock for treasury                                            (9,788)                 -
 Financing costs                                                                          -             (4,696)
                                                                              --------------    ---------------
   Net cash (used in) provided by financing activities                               (9,866)            31,473
                                                                              --------------    ---------------
Net increase (decrease) in cash                                                      (2,253)            22,667
Cash, beginning of period                                                             5,908              1,467
                                                                              ==============    ===============
Cash, end of period                                                                 $ 3,655           $ 24,134
                                                                              ==============    ===============

Supplemental cash flow information:
 Cash paid during the period for:
   Interest, including $192 capitalized in Fiscal 1998                              $ 7,484            $ 4,685
   Income taxes, net of refunds                                                       $ 272            $ 1,630
</TABLE>

                       See notes to financial statements.

                                       5
<PAGE>



                             THE FONDA GROUP, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)

1. BASIS OF PRESENTATION

         On March 12, 1998, SF Holdings Group, Inc. ("SF Holdings"), a Delaware
corporation principally owned by the majority stockholder of The Fonda Group,
Inc. (the "Company"), acquired 90% of the total outstanding common stock,
including 48% of the total voting common stock, of Sweetheart Holdings Inc.
("Sweetheart"). In connection therewith, the Company consummated the following
transactions: 

(a)      All of the outstanding shares of the Company were converted into
         shares of SF Holdings pursuant to a merger whereby the stockholders of
         the Company became stockholders of SF Holdings and the Company became
         a wholly-owned subsidiary of SF Holdings (the "Merger"). Each share of
         Class A and Class B common stock of the Company was converted into
         47.6766 shares of Class A or Class B common stock, as the case may be,
         of SF Holdings; 

(b)      The outstanding options to purchase Class A common stock of the
         Company granted to the majority stockholder were converted into
         options to purchase 715,149 shares of Class A common stock of SF
         Holdings; and 

(c)      Outstanding warrants to purchase shares of Class B common stock of the
         Company were exercised and such shares were converted into 564,586
         shares of Class B common stock of SF Holdings.

         The financial statements as of April 26, 1998 and for the three and
nine months ended April 26, 1998 and April 27, 1997 are unaudited but, in the
opinion of management, include all adjustments (consisting only of normal
recurring adjustments and accruals) which the Company considers necessary for a
fair presentation of the operating results for these periods. Results for
interim periods are not necessarily indicative of results for the entire year.
Certain amounts for prior periods have been reclassified to conform with
current period presentation.

2.  INVENTORIES

         Inventories consist of the following (in thousands):

                                        APRIL 26,          JULY 27,
                                           1998              1997
                                      --------------    ---------------
     Raw materials                         $ 16,130           $ 18,143
     Work in process                            278                391
     Finished goods                          20,010             20,345
     Other                                    2,032              1,955
                                      ==============    ===============
                                           $ 38,450           $ 40,834
                                      ==============    ===============



                                       6
<PAGE>


3.  STOCKHOLDERS' EQUITY

         The changes in stockholders' equity consist of the following (in
thousands):


<TABLE>
<CAPTION>
                                                                                       NINE MONTHS ENDED
                                                                                   APRIL 26,        APRIL 27,
                                                                                      1998             1997
                                                                                 --------------   --------------
<S>                                                                                   <C>              <C>     
Balance at beginning of fiscal year                                                   $ 15,010         $ 11,873
  Net income (loss)                                                                      6,083             (712)
  Treasury stock repurchase                                                             (9,787)               -
  Accretion of redeemable common stock                                                     (48)             (49)
  Transfer of liquidation value of redeemable common stock                               2,123                -
                                                                                 ==============   ==============
Balance at end of period                                                              $ 13,381         $ 11,112
                                                                                 ==============   ==============
</TABLE>

         In connection with the Merger, as discussed in Note 1, the $2.1
million accreted value of the redeemable common stock at that date was credited
to Stockholders' Equity.

         In September 1997 and January 1998, the Company redeemed 61,865 and
10,635 shares of Class A common stock (pre-Merger shares) for $8.4 million and
$1.4 million, respectively. The redemption was made pursuant to an offer by the
Company to repurchase up to 74,000 shares of common stock (pre-Merger shares)
at $135 per share from its stockholders on a pro rata basis. The Company has
completed such stock repurchase. On March 12, 1998, such treasury stock was
canceled in the Merger.

4. OTHER INCOME, NET

         On March 24, 1998, the Company consummated an agreement to sell
substantially all of the fixed assets and certain related working capital of
its Natural Dam tissue mill (the "Mill"), pursuant to which the Company
realized net proceeds of $24.6 million, including a note receivable of $3.7
million, and recorded a pre-tax gain of $9.3 million. The Mill had net sales,
excluding intercompany sales and operating income of $19.3 million and $4.1
million, respectively, in Fiscal 1997, $12.7 million and $0.9 million in the
Fiscal 1998 nine month period and $13.8 million and $2.7 million in the Fiscal
1997 nine month period.

         In February 1998, the Company decided to close its Jacksonville,
Florida facility and relocate such manufacturing capacity and equipment to
other sites. The Company accrued $0.3 million primarily related to severance
and continuing lease costs after the facility closed.

5. EXTRAORDINARY EXPENSE, NET

         In the third quarter of fiscal 1997, the Company incurred a $3.5
million extraordinary expense (net of a $2.5 million income tax benefit) in
connection with the early retirement of debt. The expense consisted of the
write-off of unamortized debt issuance costs, elimination of unamortized debt
discount and prepayment penalties.

6. RELATED PARTY TRANSACTIONS

         On March 12, 1998, the Company entered into an agreement with Creative
Expressions Group, Inc. ("CEG"), an affiliate of the Company, whereby CEG will
manufacture and distribute certain party goods products currently manufactured
by the Company for a period of five years, subject to extension. In connection
therewith, the Company will receive an annual royalty equal to 5% of CEG's cash
flow, as determined in accordance with a formula specified in such agreement.
Pursuant to such agreement, during a transition period, the Company is
manufacturing such party goods products for CEG on a contract basis. The
Company believes that the terms of such agreement are at least as favorable as
those it could otherwise 


                                       7
<PAGE>

have obtained from unrelated third parties and were negotiated on an arm's
length basis. In Fiscal 1997, the Company's net sales of such party goods
products were approximately $30 million. For the nine months ended April 25,
1998, net sales to CEG were $7.1 million and royalty income was not
significant. Receivables from CEG at April 25, 1998 were $5.0 million.

         On March 12, 1998, the Company amended certain terms of the $2.6
million Promissory Note dated February 27, 1997, made by CEG in favor of the
Company (the "CEG Note"). The 10% annual interest on the CEG Note was converted
to pay-in-kind, the note's 2002 maturity was extended for an additional three 
years and the note was made subordinate to Senior Debt (as such term is defined
therein). In connection with such amendment, Fonda was also issued a warrant to
purchase, for a nominal amount, 2.5% of CEG's common stock. The Company
believes that the terms of such loan and the amendments thereto are no more
favorable to CEG than those that CEG could otherwise have obtained from
unrelated third parties and such terms were negotiated on an arm's length
basis.

         On March 12, 1998, SF Holdings and the Company agreed to file
consolidated Federal income tax returns and entered into a Tax Sharing
Agreement, pursuant to which the Company will pay SF Holdings its allocable
share of the consolidated group's Federal income tax liability, which, in
general, will equal the tax liability the Company would have paid if it had
filed a separate Federal income tax return.

         On March 12, 1998 the Company entered into an agreement with SF
Holdings whereby the Company acquired for $7.0 million substantially all of SF
Holdings' rights under a Management Services Agreement dated August 31, 1993,
as amended, and pursuant to which the Company will have the right, subject to
the direction of the board of directors of Sweetheart, to manage Sweetheart's
day-to-day operations. In consideration of the Company's performance of
services, the Company will be entitled to receive management fees from
Sweetheart of $.7 million, $.9 million and $1.1 million in the first, second
and third years, respectively, and $1.6 million per year for the remaining five
years of the Management Services Agreement. The Company believes that the terms
of such agreement are at least as favorable as those it could otherwise have
obtained from unrelated third parties and were negotiated on an arm's length
basis.

7.  OTHER BUSINESS DEVELOPMENTS

         In January 1998, the Company acquired certain net assets of
Leisureway, Inc., a manufacturer of white paper plates, for $7.2 million,
including deferred payments of $0.3 million and acquisition costs, subject to a
working capital adjustment. The excess of the purchase price over the Company's
preliminary evaluation of the fair value of the net assets acquired was $7.5
million and has been recorded as goodwill.

         In February 1998, the Company reached an agreement with the owner of
the co-generation facility hosted by the Company at the Mill, whereby the owner
of such facility will terminate its obligation to supply steam to the Mill and
to make certain land lease payments in return for a lump sum cash payment and
the delivery of certain equipment. The consummation of this agreement is
subject to various conditions, including the negotiation and execution of a
definitive agreement and the consummation of a master restructuring agreement
among Niagara Mohawk Power Corporation and sixteen independent power producers,
including the owner of such facility. The Company expects to record a gain upon
the consummation of the transaction contemplated by this agreement, however,
there can be no assurance that such transaction will be consummated.

8.  SUBSEQUENT EVENTS

         In May 1998, the Company purchased a 38.2% ownership interest in Fibre
Marketing Group, LLC ("Fibre Marketing"), a limited liability company engaged
in the waste paper recovery business, from a director of the Company for $0.2
million. Four M Corporation, an affiliate of the Company, owns a 50% interest
in Fibre Marketing. In Fiscal 1997, net sales to Fibre Marketing were $3.6
million. The Company 


                                       8
<PAGE>

believes that the terms on which it purchased such interest was at least as
favorable as those it could otherwise have obtained from an unrelated third
party and were negotiated on an arms length basis.

         In May 1998, the Company decided to close its administrative offices
in St. Albans, Vermont and relocate such offices, including its principal
executive offices, to Oshkosh, Wisconsin. The costs associated with such
relocation will be recorded in the fourth fiscal quarter.





                                       9
<PAGE>

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

         The following discussion contains forward-looking statements which
involve risks and uncertainties. The Company's actual results or future events
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not limited to, raw
material costs, labor market conditions, the highly competitive nature of the
industry, and developments with respect to contingencies.

GENERAL

         The Company is a converter and marketer of paperboard and tissue
products. The selling prices for the Company's raw materials fluctuate. This is
particularly true with respect to commodity products, such as coated and
uncoated white paper plates. The Company's selling prices historically follow
the changes in raw material prices. The actual impact on the Company from raw
materials price changes is affected by a number of factors including the level
of inventories at the time of a price change, the specific timing and frequency
of price changes, and the lead and lag time that generally accompanies the
implementation of both raw materials and subsequent selling price changes.
However, over time the Company believes that it is able to maintain relatively
stable margins between its selling prices and raw materials prices.

         The Company's operations are moderately seasonal. Income from
operations tends to be greater during the first and fourth quarters of the
fiscal year than during the second and third quarters.

YEAR 2000

         The Company has implemented Year 2000 compliance programs designed to
ensure that its computer systems and applications will function properly beyond
1999. The Company expects such programs to be substantially completed by the
end of 1999. The Company believes that adequate resources, both internal and
external, have been allocated for this purpose. Spending for these Year 2000
compliance programs, including Fiscal 1998 spending, is estimated to be $1.8
million and will be funded by cash flow from operations or borrowings under the
Company's credit facility. However, there can be no assurance that the Company
will identify all Year 2000 date conversion problems in its computer systems in
advance of their occurrence or that the Company will be able to successfully
remedy all problems that are discovered. Failure by the Company and/or their
significant vendors and customers to complete Year 2000 compliance programs in
a timely manner could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the revenue stream
and financial stability of existing customers may be adversely impacted by Year
2000 problems which could cause fluctuations in the Company's revenues and
operating profitability.

RECENT DEVELOPMENTS

         On March 24, 1998, the Company consummated an agreement with Cellu
Tissue Holdings, Inc. ("Cellu"), whereby Cellu acquired substantially all of
the fixed assets and certain related working capital (the "Mill Disposition")
of the Natural Dam tissue mill in Gouverneur, New York (the "Mill"), and the
Company realized net proceeds of $24.6 million, including a note receivable of
$3.7 million, and recorded a pre-tax gain of $9.3 million. The Mill produced
tissue mill products, primarily specialty "jumbo" rolls of tissue.



                                      10
<PAGE>

         In February 1998, the Company reached an agreement with Kamine
Besicorp Natural Dam L.P. ("Kamine"), the owner of the co-generation facility
hosted by the Company at the Mill, whereby Kamine will terminate its obligation
to supply steam to the Mill and to make certain land lease payments in return
for a lump sum cash payment and the delivery of certain equipment. The
consummation of this agreement is subject to various conditions, including the
negotiation and execution of a definitive agreement and the consummation of a
master restructuring agreement among Niagara Mohawk Power Corporation and
sixteen independent power producers, including Kamine. The Company expects to
record a gain upon the consummation of the transaction contemplated by this
agreement, however, there can be no assurance that such transaction will be
consummated.

         On May 27, 1998, the Company decided to close its administrative
offices in St. Albans, Vermont and to relocate such offices, including its
principal executive offices, to the Company's Oshkosh, Wisconsin facility. The
costs associated with such relocation will be recorded in the fourth fiscal
quarter.

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED                             NINE MONTHS ENDED
                            -------------------------------------------  ----------------------------------------------
                              APRIL 26, 1998        APRIL 27, 1997         APRIL 26, 1998         APRIL 27, 1997
                            -------------------   -------------------    --------------------   -------------------
                                        % OF                   % OF                   % OF                   % OF
                                         NET                   NET                     NET                   NET
                             AMOUNT     SALES      AMOUNT     SALES        AMOUNT     SALES       AMOUNT    SALES
                            ---------- --------   ----------  -------    ----------- --------   ----------- -------
                                                             (Dollars in millions)
<S>                          <C>          <C>       <C>          <C>       <C>          <C>      <C>          <C>  
Net sales                    $  66.9      100.%     $  60.2      100.%     $  203.6     100.%    $  184.5     100.%
Cost of goods sold              56.5       84.4        48.7       81.0        167.5      82.3       148.8      80.6
                            ---------- --------   ----------  -------    ----------- --------   ----------- -------
Gross profit                    10.4       15.6        11.4       19.0         36.1      17.7        35.7      19.4
Selling, general and
  administrative expenses        8.7       13.0         7.7       12.8         26.0      12.8        24.1      13.1
Other income, net               (9.1)     (13.6)                               (9.6)     (4.7)
                            ---------- --------   ----------  -------    ----------- --------   ----------- -------
Income from operations          10.9       16.2         3.7        6.2         19.6       9.6        11.6       6.3
Interest expense, net            3.1        4.7         2.3        3.8          9.2       4.5         6.8       3.7
                            ---------- --------   ----------  -------    ----------- --------   ----------- -------
Income before taxes              7.7       11.5         1.5        2.4         10.5       5.2         4.8       2.6
Income tax expense               3.2        4.8         0.6        1.0          4.4       2.2         2.0       1.1
                            ---------- --------   ----------  -------    ----------- --------   ----------- -------
Income before
  extraordinary expense      $   4.5        6.7%    $   0.9        1.4%     $    6.1      3.0%   $    2.8       1.5%
                            ========== ========   ==========  =======    =========== ========   =========== =======
</TABLE>


THREE MONTHS ENDED APRIL 26, 1998 COMPARED TO THREE MONTHS ENDED APRIL 27, 1997

         Net sales increased $6.8 million, or 11.2%, to $66.9 million, in the
three months ended April 26, 1998 compared to $60.2 million in the three months
ended April 27, 1997. The increase was primarily due to increased sales volume
in converting operations from businesses acquired subsequent to the third
quarter of Fiscal 1997. Sales volume in the converting operations increased 18%
in the consumer markets and decreased less than 1% in the institutional
markets. Average selling prices increased 10% in the institutional markets and
decreased 3% in the consumer markets. Net sales of tissue mill products
decreased $0.5 million primarily due to the Mill Disposition on March 24, 1998.

         Gross profit decreased $1.0 million, or 8.7%, to $10.4 million in the
three months ended April 26, 1998 compared to $11.4 million in the three months
ended April 27, 1997. This decrease is primarily the result of a $1.5 million
decrease in gross profit of tissue mill products, partially offset by a $0.5
million increase in gross profit in the converting operations. In the
converting operations, gross profits from businesses acquired subsequent to the
third quarter of Fiscal 1997 


                                      11
<PAGE>

were partially offset by increased costs of paperboard, which were not
recovered through price adjustments. The decrease in gross profit of tissue
mill products was a result of increased sales of lower margin white paper and
reduced sales of higher margin deep tone paper due to competitive market
conditions, as well as increased manufacturing costs resulting from the
start-up of the second paper machine. As a percentage of net sales, gross
profit decreased from 19.0% in the three months ended April 27, 1997 to 15.6%
in the three months ended April 26, 1998 due to the decline in gross profit of
tissue mill products.

         Selling, general and administrative expenses increased $1.0 million,
or 12.6%, to $8.7 million in the three months ended April 26, 1998 compared to
$7.7 million in the three months ended April 27, 1997 primarily due to
increased selling expenses resulting from the increase in net sales. As a
percentage of net sales, selling, general and administrative expenses increased
slightly from 12.8% in the three months ended April 27, 1997 to 13.0% in the
three months ended April 26, 1998.

         Other income, net includes a $9.3 million pre-tax gain on the sale of
the Mill. The gain was partially offset by closure cost accruals relating to
the decision to close the Jacksonville converting facility.

         Income from operations increased $7.1 million to $10.9 million in the
three months ended April 26, 1998 compared to $3.7 million in the three months
ended April 27, 1997 due to the reasons discussed above. Excluding other
income, net, as a percentage of net sales, income from operations decreased
from 6.2% in the three months ended April 27, 1997 to 2.6% in the three months
ended April 26, 1998.

         Interest expense, net of interest income, increased $0.9 million, or
39.4% to $3.1 million in the three months ended April 26, 1998 compared to $2.3
million in the three months ended April 27, 1997. The increase was due to
higher borrowing levels resulting from the issuance in the third quarter of
Fiscal 1997 of $120.0 million of 9 1/2% Senior Subordinated Notes due 2007,
(the "Senior Notes") which replaced higher interest rate debt.

         As a result of the above and a 42% effective tax rate in both periods,
income before extraordinary items was $4.5 million in the three months ended
April 26, 1998 compared to $0.9 million in the three months ended April 27,
1997.

         In the three months ended April 27, 1997, the Company incurred a $3.5
million extraordinary expense (net of a $2.5 million income tax benefit) in
connection with the early retirement of debt consisting of the write-off of
unamortized debt issuance costs, elimination of unamortized debt discount, and
prepayment penalties. As a result of the above, net income was $4.5 million in
the three months ended April 26, 1998 compared to a net loss of $2.6 million in
the three months ended April 27, 1997.


   NINE MONTHS ENDED APRIL 26, 1998 COMPARED TO NINE MONTHS ENDED APRIL 27, 1997

         Net sales increased $19.1 million, or 10.3%, to $203.6 million, in the
nine months ended April 26, 1998 compared to $184.5 million in the nine months
ended April 27, 1997. The increase was primarily due to increased sales volume
in converting operations from businesses acquired subsequent to the third
quarter of Fiscal 1997, and to a lesser extent increased sales volume in
converted tissue products. Sales volume in the converting operations increased
12% in the consumer markets and 7% in the institutional markets. Average
selling prices increased 5% in the 


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<PAGE>

institutional markets and decreased less than 1% in the consumer markets. Net
sales of tissue mill products declined $1.1 million resulting from a shift in
mix due to competitive market conditions, a nine day outage due to a severe ice
storm which interrupted the availability of electricity and steam and the sale
of The Mill on March 24, 1998. Increased sales of commodity white paper from
the new paper machine were offset by reduced sales of deep tone paper due to
competitive market conditions.

         Gross profit increased $0.4 million, or 1.0%, to $36.1 million in the
nine months ended April 26, 1998 compared to $35.7 million in the nine months
ended April 27, 1997. This increase is primarily the result of a $3.3 million
increase in gross profit in the converting operations, partially offset by a
$2.9 million decrease in gross profit in tissue mill products. In the
converting operations, gross profits from businesses acquired subsequent to the
third quarter of Fiscal 1997 and higher margins in converted tissue products
were partially offset by increased costs of paperboard, which were not
recovered through price adjustments. The decrease in gross profits of tissue
mill products was due to the increased sales of lower margin white paper and
reduced sales of higher margin deep tone paper, as well as increased
manufacturing costs resulting from the start-up of the second paper machine. As
a result of the ice storm, the Mill sustained property damage and experienced a
temporary shut down. The Company maintains insurance policies that cover losses
of this type, and expects to recover a portion of these costs. The Company
believes that any additional costs would not have a significant effect on it
results of operations. As a percentage of net sales, gross profit decreased
from 19.4% in the nine months ended April 27, 1997 to 17.7% in the nine months
ended April 26, 1998 for the reasons set forth above.

         Selling, general and administrative expenses increased $1.9 million,
or 7.8%, to $26.0 million in the nine months ended April 26, 1998 compared to
$24.1 million in the nine months ended April 27, 1997 primarily due to
increased selling expenses resulting from the increase in net sales. As a
percentage of net sales, selling, general and administrative expenses decreased
slightly from 13.1% in the nine months ended April 27, 1997 to 12.8% in the
nine months ended April 26, 1998.

         Other income, net includes a $9.3 million pre-tax gain on the sale of
the Mill and a $0.4 million gain on the sale of other non-core assets. These
gains were partially offset by closure cost accruals relating to the decision
to close the Jacksonville converting facility.

         Income from operations increased $8.0 million, or 69.4% to $19.6
million in the nine months ended April 26, 1998 compared to $11.6 million in
the nine months ended April 27, 1997 due to the reasons discussed above.
Excluding other income, net, as a percentage of net sales, income from
operations decreased from 6.3% in the nine months ended April 27, 1997 to 4.9%
in the nine months ended April 26, 1998.

         Interest expense, net of interest income, increased $2.4 million, or
34.6% to $9.2 million in the nine months ended April 26, 1998 compared to $6.8
million in the nine months ended April 27, 1997. The increase was due to higher
borrowing levels resulting from the issuance in the third quarter of Fiscal
1997 of the Senior Notes, which replaced higher interest rate debt.

         As a result of the above and a 42% effective tax rate in both periods,
income before extraordinary items was $6.1 million in the nine months ended
April 26, 1998 compared to $2.8 million in the nine months ended April 27,
1997.

         In the nine months ended April 27, 1997, the Company incurred a $3.5
million extraordinary expense (net of a $2.5 million income tax benefit) in
connection with the early retirement of debt consisting of the write-off of
unamortized debt issuance costs, elimination of unamortized debt discount, and
prepayment penalties. As a result of the above, net income was 


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<PAGE>

$6.1 million in the nine months ended April 26, 1998 compared to a net loss of 
$0.7 million in the nine months ended April 27, 1997.

LIQUIDITY AND CAPITAL RESOURCES

         Historically, the Company has relied on cash flows from operations and
borrowings to finance its working capital requirements, capital expenditures
and acquisitions.

         Net cash provided by operating activities for the nine months ended
April 26, 1998 was $6.3 million compared to $0.7 million for the nine months
ended April 27, 1997. The nine month period ended April 26, 1998 includes the
receipt of $2.9 million resulting from the settlement of a lawsuit.

         Historically, the Company's investing activities have been primarily
capital expenditures and business acquisitions. Capital expenditures in the
nine months ended April 26, 1998 were $6.2 million, including $1.8 million
related to the installation of a second paper machine at the Mill. The
remaining $4.4 million in such period and the capital expenditures in the nine
months ended April 27, 1997 were for routine capital improvements. In addition,
during the 1998 period the Company received proceeds of $20.8 million, net of
transaction costs and fees, from the Mill Disposition and paid $7.0 million to
SF Holdings in consideration for its right to manage Sweetheart's day to day
operations pursuant to the Management Services Agreement. (See Note 6 of Notes
to Financial Statements)

         The Company's revolving credit facility provides up to $50 million
borrowing capacity, collateralized by accounts receivable and inventories. At
April 26, 1998, $0.4 million was outstanding under such facility and $36.1
million was the maximum advance available based upon eligible collateral.

         Pursuant to the terms of the Senior Notes and the revolving credit
facility, the Company is subject to certain affirmative and negative covenants
customarily contained in agreements of this type, including, without
limitation, covenants that restrict, subject to specified exceptions (i)
mergers, consolidations, asset sales or changes in capital structure, (ii)
creation or acquisition of subsidiaries, (iii) purchase or redemption of the
Company's capital stock or declaration or payment of dividends or distributions
on such capital stock, (iv) incurrence of additional indebtedness, (v)
investment activities, (vi) granting or incurrence of liens to secure other
indebtedness, (vii) prepayment or modification of the terms of subordinated
indebtedness and (viii) engaging in transactions with affiliates. In addition,
the revolving credit facility requires that the Company satisfy certain
financial covenants.

         During the nine months ended April 26, 1998, the Company redeemed
72,500 shares of Class A common stock (pre-Merger shares) for $9.8 million
pursuant to an offer by the Company to repurchase up to 74,000 shares of its
common stock (pre-Merger shares) at $135 per share from its stockholders on a
pro rata basis. The Company has completed such stock repurchase.

         During the nine months ended April 26, 1998, the Company did not incur
material costs for compliance with environmental law and regulations.

         The Company believes that cash generated by operations, combined with
amounts available under the revolving credit facility, will be sufficient to
meet the Company's capital expenditure needs, debt service requirements and
working capital needs for the foreseeable future.




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PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits:

Exhibits 3.1 through 10.6 are incorporated herein by reference to the exhibit
with the corresponding number filed as part of the Company's Registration
Statement on Form S-4, as amended (File No. 333-24939).

     EXHIBIT #                      DESCRIPTION OF EXHIBIT

          3.1     Certificate of Incorporation of The Fonda Group, Inc. (the
                  "Company").
          3.2     Amended and Restated By-laws of the Company.
          4.1     Indenture, dated as of February 27, 1997, between the Company
                  and the Bank of New York.
          4.2     Form of 9 1/2% Series A and Series B Senior Subordinated
                  Notes, dated as of February 27, 1997 (incorporated by
                  reference to Exhibit 4.1).
          4.3     Registration Rights Agreement, dated as of February 27, 1997,
                  among the Company, Bear Stearns & Co. Inc. and Dillon, Read &
                  Co. Inc. (the "Initial Purchasers").
         10.1     Second Amended and Restated Revolving Credit and Security
                  Agreement, dated as of February 27, 1997, among the Company,
                  the financial institutions party thereto and IBJ Schroder
                  Bank & Trust Company, as agent.
         10.2     Stock Purchase Agreement, dated as of October 13, 1995,
                  between the Company and Chesapeake Corporation.
         10.3     Asset Purchase Agreement, dated as of October 13, 1995,
                  between the Company and Alfred Bleyer & Co., Inc.
         10.4     Asset Purchase Agreement, dated as of March 22, 1996, among
                  James River Paper Company, Inc., the Company and Newco (the
                  "James River Agreement"). 
         10.5     First Amendment to the James River Agreement, dated as of May
                  6, 1996, among James River, the Company and Newco.
         10.6     Indenture of Lease between Dennis Mehiel and the Company
                  dated as of January 1, 1995.
         10.7*    Assignment and Assumption Agreement, dated as of March 12,
                  1998 between the Company and SF Holdings Group, Inc.
         10.8*    Tax Sharing Agreement, dated as of March 12, 1998 among SF
                  Holdings Group, Inc. and the Company.
         10.9*    License Agreement, dated as of March 12, 1998 between
                  Creative Expressions Group, Inc. and the Company.
         27.1*    Financial Data Schedule.

             *    filed herewith.

(b)        Reports on Form 8-K

A report on Form 8-K (Item 5. Other events) was filed on February 20, 1998.





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                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.

      Date:  June 10, 1998

                                     THE FONDA GROUP, INC.



                                     By:   /s/ HANS H. HEINSEN
                                          ------------------------

                                                 Hans H. Heinsen
                                     Senior Vice President, Chief Financial
                                     Officer and Treasurer (Principal Financial
                                     And Accounting Officer)























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