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 June 30, 1998

                                       OR

           [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                            THE EXCHANGE ACT OF 1934

                       Commission file number: 333-42201

                       BEAR ISLAND PAPER COMPANY, L.L.C.
             (Exact name of registrant as specified in its charter)

                     Virginia                           06-0980835
          (State or other jurisdiction of            (I.R.S. Employer
           Incorporation or organization)         Identification Number)

                              10026 Old Ridge Road
                                  Ashland, VA
                    (Address of Principal Executive Offices)

                                     23005
                                   (Zip Code)

                                 (804) 227-3394
              (Registrant's telephone number, including area code)

             Former Name, Former Address and Former Fiscal Year, if
                   Changed Since Last Report: Not Applicable

         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  and
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  issuer's
classes of common stock, as of the latest practicable date: Not Applicable.

<PAGE>

<PAGE>
<TABLE>

                                             BEAR ISLAND PAPER COMPANY, L.L.C.
                                                           INDEX
<CAPTION>
<S> <C>

                                                                                                                  Page(s)
 Part I.  Financial Information

     Item 1

       Condensed Balance Sheets                                                                                       1

       Condensed Statements of Income                                                                                 2

       Condensed Statements of Cash Flows                                                                             3

       Notes to Condensed Financial Statements                                                                        4


     Item 2

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


 Part II.  Other Information

     Item 6.  Exhibits and Reports on Form 8-K                                                                       11


 Signatures                                                                                                          12



</TABLE>


<PAGE>
<TABLE>

PART I.  FINANCIAL INFORMATION
ITEM I.  FINANCIAL STATEMENTS
                                             BEAR ISLAND PAPER COMPANY, L.L.C.
                                                 CONDENSED BALANCE SHEETS
<CAPTION>
<S> <C>

                                                                                       June 30,          December 31,
                                               ASSETS                                    1998                1997
                                                                                    ----------------   -----------------
                                                                                      (Unaudited)
 Current assets:
     Cash and short-term investments                                                $     2,498,087    $      1,353,049
     Accounts receivable                                                                 14,381,232          14,133,335
     Inventories                                                                         12,825,907          14,213,313
     Other current assets                                                                   234,137             147,911
                                                                                    ----------------   -----------------

             Total current assets                                                        29,939,363          29,847,608

 Property, plant and equipment                                                          198,177,624         195,084,008
 Less accumulated depreciation                                                            5,849,415             822,264
                                                                                    ----------------   -----------------

             Net property, plant and equipment                                          192,328,209         194,261,744
                                                                                    ----------------   -----------------

 Deferred financing costs                                                                 8,424,153           8,375,199
                                                                                    ----------------   -----------------

               Total assets                                                         $   230,691,725    $    232,484,551
                                                                                    ================   =================


                                  LIABILITIES AND MEMBER'S EQUITY

 Current liabilities:
     Current portion of long-term debt                                                      953,959             880,304
     Accounts payable and accrued liabilities                                             9,193,118           9,446,785
     Accrued interest payable                                                             1,350,608           1,344,915
                                                                                    ----------------   -----------------

               Total current liabilities                                                 11,497,685          11,672,004

 Long-term debt                                                                         188,950,000         195,555,000
                                                                                    ----------------   -----------------

               Total liabilities                                                        200,447,685         207,227,004
                                                                                    ----------------   -----------------

 Member's equity:
     Contributed capital                                                                 26,916,392          25,469,737
     Retained earnings (accumulated deficit)                                              3,327,648           (212,190)
                                                                                    ----------------   -----------------

             Total member's equity                                                       30,244,040          25,257,547
                                                                                    ----------------   -----------------

               Total liabilities and member's equity                                $   230,691,725    $    232,484,551
                                                                                    ================   =================
 See accompanying notes to the condensed financial statements.


                                                            1

<PAGE>


                                             BEAR ISLAND PAPER COMPANY, L.L.C.
                                              CONDENSED STATEMENTS OF INCOME
                                                        (UNAUDITED)
<CAPTION>


                                                   Company           Predecessor         Company          Predecessor
                                                ---------------    ----------------  ----------------   ----------------
                                                   Three months ended June 30,           Six months ended June 30,
                                                -----------------------------------  -----------------------------------
                                                      1998               1997              1998               1997

 Net sales                                      $   31,124,443     $    28,830,607   $    61,504,911    $    55,890,306
 Cost of sales                                      23,271,112          25,727,609        45,946,249         51,201,507
                                                ---------------    ----------------  ----------------   ----------------

             Gross profit                            7,853,331           3,102,998        15,558,662          4,688,799

 Selling, general and administrative expenses:

     Management fees to Brant-Allen                   (933,733)           (864,918)       (1,845,147)        (1,676,709)
     Other                                            (274,625)           (192,303)         (550,692)          (383,768)
                                                ---------------    ----------------  ----------------   ----------------

             Income from operations                  6,644,973           2,045,777        13,162,823          2,628,322

 Other income (deductions):
     Interest expense                               (4,832,860)         (1,180,156)       (9,714,220)        (2,425,156)
     Other income (expense)                             55,812             142,603            91,235            317,106
                                                ---------------    ----------------  ----------------   ----------------

               Net income                       $    1,867,925     $     1,008,224   $     3,539,838    $       520,272
                                                ===============    ================  ================   ================
 See accompanying notes to the condensed financial statements.



                                                            2
<PAGE>


                          BEAR ISLAND PAPER COMPANY, L.L.C.
                         CONDENSED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)
<CAPTION>

                                                    Company          Predecessor
                                                ----------------   ----------------
                                                    Six months ended June 30,
                                                -----------------------------------
                                                      1998               1997
 Operating activities:
     Net income                                 $     3,539,838    $       520,272
     Adjustments to reconcile net income
           to net cash provided by
           operating activities:
       Depreciation and depletion                     5,003,754          4,975,917
       Amortization of deferred financing
         costs                                          476,316             29,622
     Changes in current assets and liabilities:
       Accounts receivable                             (247,897)           355,583
       Inventory                                      1,387,406          1,371,453
       Other current assets                             (86,226)          (910,121)
       Accounts payable and accrued
         liabilities                                  1,192,988         (3,873,571)
       Accrued interest payable                           5,693            (64,844)
                                                ----------------   ----------------

             Cash provided by operating
                   activities                        11,271,872          2,404,311
                                                ----------------   ----------------

 Investment activities:
     Purchases of property, plant and
           equipment                                 (3,070,219)        (2,436,016)
                                                ----------------   ----------------

             Net cash used in investing
                   activities                        (3,070,219)        (2,436,016)
                                                ----------------   ----------------

 Financing activities:
     Proceeds from issuance of long-term
           debt                                                            417,861
     Principal payments on long-term debt            (6,531,345)        (5,457,317)
     Payment of deferred financing costs               (525,270)
     Distribution to partners                                               34,771
                                                ----------------   ----------------

             Net cash used in financing
                   activities                        (7,056,615)        (5,004,685)
                                                ----------------   ----------------

             Net increase (decrease) in cash          1,145,038         (5,036,390)

 Cash and short-term investments, beginning
       of period                                      1,353,049         13,625,322
                                               -----------------  -----------------

               Cash and short-term
                     investments, end of
                     period                     $     2,498,087    $     8,588,932
                                                ================   ================

 Noncash financing activities:
     Contributions from Brant-Allen             $     1,446,655
                                                ================

 See accompanying notes to the condensed financial statements.
</TABLE>


                                                            3

<PAGE>


                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   In the opinion of management, the accompanying condensed financial
     statements of Bear Island Paper Company, L.L.C. (the "Company") contain all
     adjustments necessary to present fairly, in all material respects, the
     Company's financial position as of June 30, 1998 and December 31, 1997 and
     the Company's condensed results of operations for the three- and six-month
     periods ended June 30, 1998 and the condensed results of operations of the
     predecessor, Bear Island Paper Company, L.P. (the "Predecessor"), for the
     three- and six-month periods ended June 30, 1997 as well as the condensed
     cash flows of the Company and Predecessor for the six-month periods ended
     June 30, 1998 and 1997, respectively. All adjustments are of a normal and
     recurring nature. These condensed financial statements should be read in
     conjunction with the financial statements and notes thereto included in the
     Company's Form 10K filed on April 30, 1998. The December 31, 1997 balance
     sheet data was derived from audited financial statements, but does not
     include all disclosures required by generally accepted accounting
     principles.

     The results of operations for the six-month period ended June 30, 1998
     should not be regarded as necessarily indicative of the results that may
     be expected for the entire year.



2.   Effective December 1, 1997, the Company completed the purchase of the 70%
     partnership interest (the "Acquisition") in the Predecessor (the Company
     and Predecessor are collectively referred to as the "Companies") previously
     owned by subsidiaries of Dow Jones & Company, Inc. ("Dow Jones") and The
     Washington Post Company (the "Washington Post"). Immediately before the
     Acquisition and certain related financings which were used to facilitate
     the funding of the Acquisition, the Predecessor was converted into Bear
     Island Mergerco, L.L.C. ("Mergerco") and Mergerco was then merged into the
     Company with the Company being the surviving entity. The Company is a
     wholly owned subsidiary of Brant-Allen Industries, Inc. ("Brant-Allen"), a
     Delaware corporation.

     The Company accounted for the Acquisition as a purchase. The allocation of
     the purchase price resulted in purchase adjustments being applied to assets
     and liabilities acquired. In this connection, since Brant-Allen was an
     owner of a 30% interest in the Predecessor prior to the Acquisition,
     purchase adjustments were applied to adjust 70% of the basis of the assets
     and liabilities acquired to fair value. As a result of the Acquisition and
     new basis of accounting, the Company's financial statements for the period
     subsequent to the Acquisition are not comparable to the Predecessor's
     financial statements for the periods prior to the Acquisition.




                                       4
<PAGE>

                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     On January 30, 1998, the Company became subject to the information
     requirements of the Securities Exchange Act of 1934, as amended, and
     required to file reports and other information with the United States
     Securities and Exchange Commission.

     During the six months ended June 30, 1998 the board of directors of the
     Company's parent, Brant-Allen, contributed the unpaid  accrued portion of
     the management fee totaling $1,446,655 through June 30, 1998 to the
     Company's capital. This portion of the management fee is limited as to
     payment in cash by the Company to Brant-Allen under the restrictive
     covenants to the $100 million principal amount of 10% Senior Secured Notes
     due 2007 (the "Notes"). The contribution of this accrued liability has been
     reflected as an addition to contributed capital in the accompanying
     condensed balance sheet at June 30, 1998. Brant-Allen's board also agreed
     that until further action is taken by the board, future accrued fees (which
     are not payable in cash because of the Notes' restrictive covenants) should
     be contributed to the Company's capital.


3.   No provision for income taxes is required in the financial statements since
     each member or partner (prior to the Acquisition) is individually liable
     for any income tax that may be payable on its share of the Companies'
     taxable income.


4.   Finished goods and raw materials inventories are valued at the lower of
     cost or market, with cost determined on the first-in, first-out ("FIFO")
     basis. Stores inventories are valued at the lower of average cost or
     market.

     Inventories consisted of:

                                        June 30,        December 31,
                                     ---------------   ----------------
                                           1998              1997
          Raw materials              $    2,575,317    $     4,085,044
          Stores                          9,036,867          9,105,893
          Finished goods                  1,213,723          1,022,376
                                     ---------------   ----------------
                                     $   12,825,907    $@   14,213,313
                                     ===============   ================

<TABLE>
5.   Long-term debt consisted of:
<CAPTION>
<S> <C>
                                                        June 30,         December 31,
                                                    ----------------  -----------------
                                                          1998               1997
          Senior Secured Notes                      $   100,000,000   $    100,000,000

          Term Loan Facility                             69,650,000         70,000,000

          Revolving Credit Facility                      20,000,000         26,000,000

          Long-term purchase obligations                    253,959            435,304
                                                    ----------------  -----------------
                                                        189,903,959        196,435,304
          Less current portion                              953,959            880,304
                                                    ----------------  -----------------
                       Total long-term debt         $   188,950,000   $    195,555,000
                                                    ================  =================

</TABLE>

                                       5
<PAGE>

                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

6.   A component of selling, general and administrative expenses as shown on the
     statements of income includes aggregate management fees charged by
     Brant-Allen. There are restrictions on payment of the management fee.

     The Predecessor was a party to a wood supply contract with Bear Island
     Timberlands Company, L.P. ("Timberlands"), an affiliate, whereby
     Timberlands had guaranteed to supply all of the Predecessor's log and pulp
     chip requirements at prices negotiated annually. Concurrent with the
     Acquisition, the Company modified certain terms of the wood supply contract
     with Bear Island Timberlands Company L.L.C. ("BITCO"), the successor to
     Timberlands and a wholly-owned subsidiary of Brant-Allen. Purchases under
     the wood supply contract approximated $405,500 and $3,314,000 for the
     three- and six-month periods ended June 30, 1998, and $1,145,500 and
     $6,772,000 for the three- and six-month periods ended June 30, 1997,
     respectively.

     The Predecessor recognized costs of approximately $535,000 and $1,028,000
     for recycling procurement fees paid to BITCO during the three- and
     six-month periods ended June 30, 1997, respectfully, which are included in
     cost of sales in the accompanying condensed financial statements.

     The Companies charged BITCO and Timberlands for certain administrative and
     other expenses. These charges approximated $185,000 and $385,000 during the
     three- and six-month periods ended June 30, 1998 and $345,000 and $718,000
     during the three- and six-month periods ended June 30, 1997, respectively.

     The Company's receivables and payables and the Companies' sales to partners
     and affiliates were as follows:
<TABLE>
<CAPTION>
<S> <C>
                                                                            June 30,        December 31,
                                                                        ----------------  ----------------
                                                                               1998              1997
          Due from Brant-Allen                                          $       119,031   $     1,193,315
          Due from Dow Jones                                                  2,586,526         1,930,538
          Due from BITCO                                                         57,644            42,029
          Due to F. F. Soucy, Inc., a wholly owned subsidiary of
                Brant-Allen                                                      94,592           109,901

                                                    Three Months Ended June 30,           Six Months Ended June 30,
                                                                                      ----------------------------------
                                                      1998               1997               1998              1997
          Net sales to Dow Jones                 $     7,089,597    $     6,370,118   $    13,187,741   $    12,126,025
          Net sales to The Washington Post               *                6,459,575           *              13,592,747
</TABLE>
     Sales to Dow Jones represented approximately 23% and 22% of total sales
     during the three- and six-month periods ended June 30, 1998 and 21% and 22%
     during the three- and six-month periods ended June 30, 1997, respectively.
     Sales to The Washington Post represented approximately 22% and 24% of total
     sales during the three- and six-month periods ended June 30, 1997. The
     remaining sales were to other unaffiliated printing and publishing
     enterprises located primarily in the eastern United States.




                                       6
<PAGE>

                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

7.   The Financial Accounting Standards Board issued Statement No. 131,
     "Disclosures about Segments of an Enterprise and Related Information,"
     ("SFAS No. 131") in June 1997, which became effective for fiscal years
     beginning after December 31, 1997. SFAS No. 131 establishes standards for
     reporting information about operating segments, including related
     disclosures about products and services, geographic areas, and major
     customers. Interim reporting disclosures are not required in the first year
     of adoption and are therefore not provided. At the time of adoption of SFAS
     No. 131, this standard is not expected to have a material impact on the
     financial position or results of operations of the Company since the
     Company operates as one segment.

     Statement of Financial Accounting Standards No. 132 ("SFAS No. 132"),
     "Employers' Disclosures about Pensions and Other Postretirement Benefits,"
     was issued by the Financial Accounting Standards Board in February 1998,
     which is effective for all years beginning after December 31, 1997. This
     statement revises employers' disclosures about pension and other
     postretirement benefit plans. Implementation of SFAS No. 132 is not
     expected to significantly change the Company's current disclosures when
     adopted in the fourth quarter of 1998.

     Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
     "Accounting for Derivative Instruments and Hedging Activities," was issued
     by the Financial Accounting Standards Board in June 1998, which is
     effective for all fiscal quarters of all fiscal years beginning after June
     15, 1999. This statement establishes accounting and reporting standards for
     derivative instruments, including certain derivative instruments embedded
     in other contracts, and for hedging activities. At the time of adopton of
     SFAS No. 133, this standard is not expected to have a material impact on
     the financial position or results of operations of the Company.

                                       7
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

         The following is management's discussion and analysis of certain
significant factors affecting the Company's results of operations and the
Predecessor during the periods included in the accompanying condensed statements
of income and the changes in the Company's financial condition since December
31, 1997.


General

         The Company manufactures and is dependent on one product, newsprint,
which is used in general printing and the newspaper publishing industry and for
advertising circulars. Accordingly, demand for newsprint fluctuates with the
economy, newspaper circulation and purchases of advertising lineage which may
significantly impact the Company's selling price of newsprint and, therefore,
its revenues and profitability. In addition, variation in the balance between
supply and demand as a result of global capacity additions have an increasing
impact on both selling prices and inventory levels in the North American
markets. Capacity is typically added in large blocks because of the scale of new
newsprint machines.

         As a result, the newsprint market is highly cyclical, depending on
changes in global supply, demand and inventory levels. These factors
significantly impact the Company's sales volume and newsprint prices and,
therefore, the Company's revenues and profitability. Given the commodity nature
of newsprint, the Company, like other suppliers to this market, has little
influence over the timing and extent of price changes. Sales are recognized at
the time of shipment from the Company's mill. However, significant fluctuations
in revenue can and do occur as a result of changes in market conditions.

         In December, 1997, the Company purchased the 70% Limited Partnership
interests of the Predecessor owned equally by subsidiaries of The Washington
Post Company, Inc. and Dow Jones & Company, Inc. (the "Acquisition"). Funding
for the Acquisition was provided through the issuance of $100 million principal
amount of 10% Senior Secured Notes due 2007 (the "Notes") and $120 million
principal amount of bank debt (the "Bank Credit Facilities") comprised of a $70
million principal amount Term Loan Facility and a $50 million Revolving Credit
Facility. Following the Acquisition 100% of the Company was owned by Brant-Allen
Industries, Inc. ("Brant-Allen"), the original general partner of the
Predecessor.

         During the six months ended June 30, 1998 the board of directors of the
Company's parent, Brant-Allen, contributed the unpaid accrued  portion of the
management fee totaling $1,446,655 through June 30, 1998 to the Company's
capital. This portion of the management fee is limited as to payment in cash by
the Company to Brant-Allen under the restrictive covenants to the Notes. The
contribution of this accrued liability has been reflected as an addition to
contributed capital in the accompanying condensed balance sheet at June 30,
1998. Brant-Allen's board also agreed that until further action is taken by the
board, future accrued fees (which are not payable in cash because of the Notes'
restrictive covenants) should be contributed to the Company's capital.



THREE MONTHS ENDED JUNE 30, 1998, COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

         Net sales increased by $2.3 million, or 8.0%, to $31.1 million in the
second quarter of 1998, from $28.8 million in the second quarter of 1997. This
increase was attributable to an 8.2% increase in the average net selling price
of the Company's products and was offset in part by a 0.2% decrease in sales
volumes to approximately 56,500 tons in the second quarter of 1998 from
approximately 56,600 tons in the second quarter of 1997. The Company's net
selling price for newsprint increased to an average of $551 per ton in the
second quarter of 1998 from an average of $509 per ton in the second quarter of
1997.

         Cost of sales decreased by $2.5 million, or 9.6%, to $23.3 million in
the second quarter of 1998 from $25.7 million in the second quarter of 1997.
This decrease was attributable primarily to a 9.4% decrease in unit
manufacturing costs per ton and a 0.2% decrease in sales volumes. The decrease
in unit manufacturing cost per ton was a result of a 48.7% decrease in fiber
costs primarily due to a 33.4% decrease in the cost of wood in the second
quarter of 1998 to reflect cost of wood fiber on a market basis that was used
after consummation of the Acquisition from a non arms length fixed price basis,
including upcharges, that was used prior to the Acquisition. Cost of sales as a
percentage of net sales decreased to 74.8% in the second quarter of 1998, from
89.2% in the second quarter of 1997, due to depressed newsprint selling prices
in the second quarter of 1997 and reduced unit costs of manufacturing as
described above.

                                       8
<PAGE>

         Selling, general and administrative expenses increased by $0.2 million,
or 14.3%, to $1.2 million in the second quarter of 1998 from $1.1 million in the
second quarter of 1997. This increase was primarily attributable to an increase
in the management fee paid by the Company to Brant-Allen that resulted from
higher net sales and the additional administrative and regulatory expenses
incurred as a result of the Company's issuance of the Notes.

         As a result of the above factors, income from operations increased by
$4.6 million to $6.6 million in the second quarter of 1998 from $2.0 million in
the second quarter of 1997.

         Interest expense increased by $3.7 million to $4.8 million in the
second quarter of 1998 from $1.2 million in the second quarter of 1997, due to
the increase in the Company's indebtedness as a result of the Acquisition.

         As a result of the above factors, the Company's net income increased by
$0.9 million to $1.9 million in the second quarter of 1998 from $ 1.0 million in
the second quarter of 1997.

SIX MONTHS ENDED JUNE 30, 1998, COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

         Net sales increased by $5.6 million, or 10.0%, to $61.5 million in the
first six months of 1998, from $55.9 million in the first six months of 1997.
This increase was attributable to an 11.8% increase in the average net selling
price of the Company's products and was offset, in part, by a 1.6% decrease in
sales volumes to approximately 111,100 tons in the first six months of 1998 from
approximately 113,000 tons in the first six months of 1997. The Company's net
selling price for newsprint increased to an average of $580 per ton in the first
six months of 1998 from an average of $523 per ton in the first six months of
1997.

         Cost of sales decreased by $5.3 million, or 10.3%, to $45.9 million in
the first six months of 1998 from $51.2 million in the first six months of 1997.
This decrease was attributable primarily to a 8.8% decrease in unit
manufacturing costs per ton and a 1.6% decrease in sales volumes. The decrease
in unit manufacturing cost per ton was a result of a 22.7% decrease in fiber
costs primarily due to a 30.1% decrease in the cost of wood in the first six
months of 1998 to reflect the pricing of wood fiber on a market basis that is
being used after consummation of the Acquisition from a non arms length fixed
price basis including upcharges in the first six months of 1997 that was used
prior to the Acquisition. Cost of sales as a percentage of net sales decreased
to 74.7% in the first six months of 1998, from 91.6% in the first six months of
1997, due to depressed newsprint selling prices in the first six months of 1997
and reduced unit costs of manufacturing in 1998 as described above.

         Selling, general and administrative expenses increased by $0.3 million,
or 16.3%, to $2.4 million in the first six months of 1998 from $2.1 million in
the first six months of 1997. This increase was primarily attributable to an
increase in the management fee paid by the Company to Brant-Allen that resulted
from higher net sales and the additional administrative and regulatory expenses
incurred as a result of the Company's issuance of the Notes.

         As a result of the above factors, income from operations increased by
$10.5 million to $13.2 million in the first six months of 1998 from $2.6 million
in the first six months of 1997.

         Interest expense increased by $7.3 million to $9.7 million in the first
six months of 1998 from $2.4 million in the first six months of 1997, due to the
increase in the Company's indebtedness as a result of the Acquisition.

         As a result of the above factors, the Company's net income increased by
$3.0 million to $3.5 million in the first six months of 1998 from $ 0.5 million
in the second quarter of 1997.

                                       9
<PAGE>

Liquidity and Capital Resources


         Historically, the Company's principal liquidity requirements have been
for working capital, capital expenditures and debt service. These requirements
have been met through cash flows from operations and/or loans and equity
contributions from either BrantAllen or the Predecessor's former limited
partners, subsidiaries of Dow Jones and The Washington Post. Following the
Acquisition, the Company's principal liquidity requirements are expected to be
principally for working capital, debt service under the Bank Credit Facilities
and the Notes and the funding of capital expenditures.

         The Company's cash and short-term investments at June 30, 1998 were
$2.5 million, representing an increase of $1.1 million from $1.4 million at
December 31, 1997. Cash flows from operating activities during the six months
ended June 30, 1998 were used principally to cover capital expenditures of $3.1
million in connection with upgrading and maintaining its manufacturng facility
and to reduce long-term debt by $6.5 million. The Company anticipates that cash
provided from operations in the future, combined with borrowings under the
Revolving Credit Facility will be sufficient to pay its operating expenses,
satisfy debt-service obligations and fund capital expenditures.

         Management anticipates that the Company's total capital expenditures
for the balance of 1998 and 1999 will primarily relate to maintenance of its
newsprint facilities and cost reduction projects, allowing the Company to
improve quality and increase capacity, and, therefore, enhance its competitive
position.


         At June 30, 1998, the Company had approximately $189.9 million of
indebtedness, consisting of borrowings of $20 million under the Revolving Credit
Facility, $69.6 million under the Term Loan Facility, $100 million under the
Notes and approximately $0.3 million in long-term purchase obligations. In
addition, $25 million was available in unused borrowing capacity under the
Revolving Credit Facility.

Year 2000 Compliance


         The Company is in the process of modifying, upgrading or replacing its
computer software applications and systems which the Company expects will
accommodate the "Year 2000" dating changes necessary to permit correct recording
of year dates for 2000 and later years. The Company does not expect that the
cost of its Year 2000 compliance program will be material to its financial
condition or results of operations. The Company believes that it will be able to
achieve compliance by the end of 1999, and does not currently anticipate any
material disruption in its operations as the result of any failure by the
Company to be in compliance. The Company does not currently have any information
concerning the compliance status of its non-affiliated suppliers and customers.

Recently Issued Accounting Standards

         Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information," ("SFAS No. 131") in June
1997, which became effective for fiscal years beginning after December 31, 1997.
SFAS No. 131 establishes standards for reporting information about operating
segments, including related disclosures about products and services, geographic
areas, and major customers. Interim reporting disclosures are not required in
the first fiscal year of adoption and are therefore not provided. At the time of
adoption of SFAS No. 131, this standard is not expected to have a material
impact on the financial position or results of operations of the Company since
the Company operates as one segment.

         Statement of Financial Accounting Standards No. 132 ("SFAS No. 132"),
"Employers' Disclosures about Pensions and Other Postretirement Benefits," was
issued by the Financial Accounting Standards Board in February 1998, which is
effective for all years beginning after December 31, 1997. This statement
revises employers' disclosures about pension and other postretirement benefit
plans. Implementation of SFAS No. 132 is not expected to significantly change
the Company's current disclosures when adopted in the fourth quarter of 1998.

         Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting for Derivative Instruments and Hedging Activities," was issued by
the Financial Accounting Standards Board in June 1998, which is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999. This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. At the time of adopton of SFAS No. 133,
this standard is not expected to have a material impact on the financial
position or results of operations of the Company.



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<PAGE>


PART II.  OTHER INFORMATION
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


          (a)  Exhibit 27, Financial Data Schedule

          (b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.



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<PAGE>
                                   Signatures



Pursant 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, there unto duly authorized.



                                        BEAR ISLAND PAPER COMPANY, L.L.C.



                                        By:  /s/ Peter M. Brant
                                        Peter M. Brant
                                        President, Chairman of the Board and
                                                Chief Executive Officer



                                        By:  /s/ Edward D. Sherrick
                                        Edward D. Sherrick
                                        Vice President of Finance
                                        (Principal Financial Officer and
                                                Chief Accounting Officer)


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