SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                       For the quarter ended June 30, 2001

                        Commission File Number: 333-76057

                         RUSSELL-STANLEY HOLDINGS, INC.
               (Exact name of registrant as specified in charter)

<Table>
<S>                                <C>                              <C>
          Delaware                            3412                       22-3525626
(State or other jurisdiction of    (Primary Standard Industrial         (IRS Employer
incorporation or organization)      Classification Code Number)     Identification Number)
</Table>

       685 Route 202/206  Bridgewater, New Jersey               08807
        (Address of principal executive offices)              (Zip code)

                                 (908) 203-9500
              (Registrant's telephone number, including area code)

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 issuer's classes of
common stock, as of the close of the period covered by this report:

              There is no established market for our common stock.
  There were 2,200,764 shares of common stock outstanding as of June 30, 2001.
<Page>

                                TABLE OF CONTENTS

                                                                           PAGE

PART I:  FINANCIAL INFORMATION

ITEM 1:  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                         3

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                      20

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURE
         ABOUT MARKET RISK                                                  24

PART II: OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS                                                  25

ITEM 2:  CHANGES IN SECURITIES                                              25

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES                                    25

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE
         OF SECURITY HOLDERS                                                25

ITEM 5:  OTHER INFORMATION                                                  25

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K                                   25

SIGNATURES                                                                  29


                                       2
<Page>

                          PART I. FINANCIAL INFORMATION

               ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                      Three Months Ended       Six Months Ended
                                           June 30,                June 30,
                                         -----------              ----------
                                         (Unaudited)              (Unaudited)
                                      2001        2000         2001         2000
                                    --------    --------    ---------    ---------
<S>                                 <C>         <C>         <C>          <C>
NET SALES                           $ 64,775    $ 70,255    $ 129,601    $ 142,633
COST OF SALES                         53,871      58,319      106,883      116,253
                                    --------    --------    ---------    ---------
   Gross Profit                       10,904      11,936       22,718       26,380
                                    --------    --------    ---------    ---------

OPERATING EXPENSES
   Selling and delivery                5,244       5,640       10,482       11,292
   General and administrative          6,045       5,796       12,372       12,289
   Amortization of intangibles           736         739        1,477        1,480
   Financial restructuring             1,835          --        2,879           --
   Restructured operations            13,272          --       13,272           --
                                    --------    --------    ---------    ---------
   Total expenses                     27,132      12,175       40,482       25,061
                                    --------    --------    ---------    ---------

(LOSS) INCOME FROM OPERATIONS        (16,228)       (239)     (17,764)       1,319

INTEREST EXPENSE                       6,060       5,675       12,149       11,280

OTHER  (INCOME) EXPENSE - net           (964)         64         (968)         123
                                    --------    --------    ---------    ---------

LOSS BEFORE INCOME TAXES             (21,324)     (5,978)     (28,945)     (10,084)

INCOME TAX PROVISION (BENEFIT)        22,453      (1,792)      20,167       (3,025)
                                    --------    --------    ---------    ---------

NET LOSS                             (43,777)     (4,186)     (49,112)      (7,059)

OTHER COMPREHENSIVE (LOSS) INCOME        544        (294)        (169)        (243)
                                    --------    --------    ---------    ---------

COMPREHENSIVE LOSS                  $(43,233)   $ (4,480)   $ (49,281)   $  (7,302)
                                    ========    ========    =========    =========
</Table>

            See Notes to Condensed Consolidated Financial Statements.


                                       3
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                            June 30,   December 31,
                                                              2001         2000
                                                           ---------   ------------
                                                          (Unaudited)
<S>                                                        <C>           <C>
ASSETS
CURRENT ASSETS
     Cash                                                  $   7,425     $  1,077
     Accounts receivable - net                                28,436       27,019
     Inventories                                              20,867       22,658
     Prepaid taxes and income taxes receivable - net           1,061          827
     Prepaid expenses and other current assets                 1,880        1,715
                                                           ---------     --------
          Total current assets                                59,669       53,296
                                                           ---------     --------

PROPERTY, PLANT AND EQUIPMENT - net                           84,488       87,597
                                                           ---------     --------

OTHER ASSETS
     Goodwill and other intangibles - net                    101,453      103,144
     Deferred financing costs - net                            5,661        6,173
     Other noncurrent assets                                     309          183
     Deferred tax benefit - net                                   --        9,424
                                                           ---------     --------
          Total other assets                                 107,423      118,924
                                                           ---------     --------

TOTAL ASSETS                                               $ 251,580     $259,817
                                                           =========     ========

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued expenses                 $  53,963     $ 32,124
     Current portion of long-term debt                       223,111      214,263
     Deferred taxes - net                                      1,760        1,760
                                                           ---------     --------
          Total current liabilities                          278,834      248,147

OTHER NONCURRENT LIABILITIES                                   1,570        1,728

DEFERRED TAXES - NET                                          10,515           --
                                                           ---------     --------

          Total liabilities                                  290,919      249,875

STOCKHOLDERS' (DEFICIT) EQUITY                               (39,339)       9,942
                                                           ---------     --------

TOTAL LIABILITIES AND STOCKHOLDERS'
     (DEFICIT) EQUITY                                      $ 251,580     $259,817
                                                           =========     ========
</Table>

            See Notes to Condensed Consolidated Financial Statements.


                                       4
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                   Six Months Ended
                                                                       June 30,
                                                                       --------
                                                                   2001         2000
                                                                   ----         ----
                                                                     (Unaudited)
<S>                                                              <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                    $(49,112)   $ (7,059)
     Adjustments to reconcile net loss to
        net cash provided by operating activities:
               Depreciation and amortization                       13,609      16,134
               Deferred income taxes                               19,939         225
               Restructured operations, net                        12,950          --
               Other noncash items                                     55          55
Changes in operating assets and liabilities:
     Increase in accounts receivable                               (1,417)       (712)
     Decrease in inventories                                        1,791       2,766
     Increase in prepaids and other
          current assets                                             (399)     (2,482)
     Increase (decrease) in accounts payable and
          accrued expenses                                          8,889      (7,890)
     Increase in other - net                                        2,319          50
                                                                 --------    --------
          Net cash provided by operating activities                 8,624       1,087
                                                                 --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                          (7,931)    (10,700)
                                                                 --------    --------
          Net cash used in investing activities                    (7,931)    (10,700)
                                                                 --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings under revolving credit facility                 8,789      10,655
     Cash paid for financial restructuring and financing costs     (2,965)       (240)
                                                                 --------    --------
          Net cash provided by financing activities                 5,824      10,415
                                                                 --------    --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                              (169)       (243)
                                                                 --------    --------

NET CHANGE IN CASH                                                  6,348         559
CASH, BEGINNING OF PERIOD                                           1,077         704
                                                                 --------    --------
CASH, END OF PERIOD                                              $  7,425    $  1,263
                                                                 ========    ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid (received) during the period for:
     Interest                                                    $  3,354    $ 10,979
                                                                 ========    ========
     Income taxes                                                $    465    $ (1,952)
                                                                 ========    ========
</Table>

            See Notes to Condensed Consolidated Financial Statements.


                                       5
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

      The Condensed Consolidated Financial Statements and related notes thereto
as of June 30, 2001 and for the three and six month periods ended June 30, 2001
and 2000 are unaudited.

      The information furnished herein reflects all adjustments which are, in
the opinion of management, necessary for a fair presentation of the consolidated
balance sheets as of June 30, 2001 and December 31, 2000, the consolidated
statements of operations and comprehensive (loss) income for the three month and
six month periods ending June 30, 2001 and 2000 and the statements of cash flows
for the six month periods ended June 30, 2001 and 2000. The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make certain estimates
and assumptions that affect the amounts reported on the financial statements and
the accompanying notes. Actual amounts could differ from those estimates.

      These financial statements should be read in conjunction with the
financial statements and notes thereto included in Russell-Stanley Holdings,
Inc.'s (the "Company's") Annual Report on Form 10-K for the year ended December
31, 2000, File No. 333-76057.

      The Company previously announced on January 26, 2001 that it retained The
Blackstone Group, L.P. in order to assist in developing a financial
restructuring plan and that an ad-hoc committee of its senior subordinated
noteholders was organized. The Company elected not to make the interest payment
due February 15, 2001 on its Senior Subordinated Notes. The 30-day grace period
to make the interest payment to cure the default expired on March 15, 2001 and
as a consequence, the Senior Subordinated Notes, revolving credit loans and term
loan are callable and therefore have been classified as current liabilities in
the December 31, 2000 and June 30, 2001 consolidated balance sheets. The Company
and its lenders under the Credit Agreement entered into a 60-day Forbearance and
Amendment Agreement (the Forbearance Agreement) dated February 15, 2001 pursuant
to which the lenders will not call the Company's outstanding debt through the
termination of the Forbearance Agreement and will continue to allow the Company
to draw on their revolving credit facility to satisfy working capital needs
subject to certain limitations. In addition, the interest rate on the Company's
term loan and the revolving credit loan margin was increased .50% and the
facility's commitment was temporarily reduced from $75.0 million to $60.0
million. The Forbearance Agreement was further extended an additional sixty days
until June 15, 2001 with an additional .25% interest rate increase in effect for
the period. On June 15, 2001 the Forbearance Agreement was extended until August
31, 2001 with an additional .50% interest rate increase on the Company's
revolving credit loan margin in effect for the period. The Forbearance Agreement
terminates on the earlier of (a) the occurrence of an additional event of
default (as defined); (b) August 31, 2001 or (c) the date on which the Senior
Subordinated Notes are accelerated. In connection with this agreement, a portion
of the Company's revolving credit loan availability is subject to a monthly
borrowing base calculation applied to eligible accounts receivable and
inventory, not to exceed $30.0 million. The remaining $55.0 million commitment
under the revolving credit and term loan facility is not subject to this
calculation.

      The Company announced on July 17, 2001 that it reached an agreement in
principle on a term sheet for a restructuring that will significantly
de-leverage the Company's balance sheet by eliminating a significant amount of
debt and related interest cost. Under terms of the proposed restructuring, bank
lenders have indicated they will support an amendment to the existing revolving
credit and term loan facility providing for a $95.0 million commitment which is
an increase of $10.0 million over the current level. On the effective date of
the restructuring, the Company will have unutilized availability of
approximately $20.0 million. Management expects to obtain an extended
forbearance agreement beyond August 31, 2001 through the transaction's closing
date. Note holders will exchange $150.0 million of the existing


                                       6
<Page>

10.875% Senior Subordinated Notes into all of the equity of the reorganized
company and $20.0 million of new unregistered Senior Subordinated Notes due
seven years from the effective date. Interest on the new notes will be
paid-in-kind until September 30, 2003 and payable in cash thereafter if certain
financial conditions are met.

      An ad-hoc committee of note holders whose members hold more than 90% of
the aggregate principal amount of the existing Senior Subordinated Notes has
indicated they will support the proposed restructuring. The restructuring will
proceed as an exchange offer to existing holders of the Senior Subordinated
Notes. The restructuring is subject to documentation and other customary
conditions and is expected to be completed during the third quarter. The
restructuring will have no effect on trade creditors or customers.

      For the six-month period ended June 30, 2001, approximately $2.9 million
in professional fees were incurred in connection with the financial
restructuring and were expensed in the accompanying condensed consolidated
statement of operations.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations." SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The Company does not believe that the adoption of
SFAS 141 will have a significant impact on its financial statements.

      In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", which is effective
January 1, 2002. SFAS 142 requires, among other things, the discontinuance of
goodwill amortization. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles,
reclassification of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential future
impairments of goodwill. SFAS 142 also requires the Company to complete a
transitional goodwill impairment test six months from the date of adoption. The
Company is currently assessing but has not yet determined the impact of SFAS 142
on its financial position and results of operations.

NOTE 3 - ACCOUNTING POLICY MATTERS

      Statement of Financial Accounting Standards ("SFAS") 133, Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133, and SFAS 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities, is effective for the
Company as of January 1, 2001. These standards require that an entity recognize
all derivatives as either assets or liabilities measured at fair value. The
accounting for changes in the fair value of a derivative depends on the use of
the derivative. In addition, certain contracts that were not formerly considered
derivatives may now meet the definition of a derivative. Adoption of these new
accounting standards did not have a material impact on the Company's financial
condition or results of operations.

      Reclassifications - Certain amounts in 2000 have been reclassified to
conform to the 2001 presentation.


                                       7
<Page>

NOTE 4 - INVENTORIES

Inventories consist of the following:

<Table>
<Caption>
                                                    June 30,        December 31,
                                                      2001              2000
                                                      ----              ----
                                                   (Unaudited)
                                                            (In Thousands)
<S>                                                  <C>              <C>
Raw materials                                        $11,383          $11,980
Work-in-process                                        2,519            2,338
Finished goods                                         6,965            8,340
                                                     -------          -------
     Total                                           $20,867          $22,658
                                                     =======          =======
</Table>

NOTE 5 - LONG-TERM DEBT

      As discussed in Note 1 of the condensed consolidated financial statements,
the Company elected to withhold the payment of interest due on February 15, 2001
on its Senior Subordinated Notes and did not make the payment within the 30-day
grace period. As previously disclosed in the Company's Annual Report on Form
10-K for the year ended December 31, 2000, due to the violations of the
covenants under the Credit Agreement and the interest payment default, the
Senior Subordinated Notes, revolving credit loans and term loan are callable and
therefore have been classified as current liabilities in the December 31, 2000
and June 30, 2001 consolidated balance sheets.

The Notes, revolving credit loans, and term loan have the following provisions
(dollars in thousands):

<Table>
<Caption>
                                                                              Interest                     Interest
                                                                              Rate at      Balance at      Rate at       Balance at
                          Domestic                    Eurodollar              June 30,      June 30,     December 31,   December 31,
                       Interest Rate                 Interest Rate              2001          2001           2000           2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                            (Unaudited)    (Unaudited)
<S>              <C>                           <C>                             <C>          <C>           <C>             <C>
Revolving        Prime plus margin             LIBOR plus margin
credit loan      not less than 2.50%; 1.25%    not less than 3.50%; 2.75%       9.25%       $ 42,518      9.19-10.75%     $ 32,543

Revolving        Canadian prime
credit loan-     plus margin not
Foreign          less than 3.00%; 1.75%        --                               9.25           6,456            9.25         7,639

Term Loan C      Fixed rate                    Fixed rate                      10.23          25,000            9.48        25,000

Senior
Subordinated
Notes            Fixed rate                    --                              10.88         149,137           10.88       149,081
                                                                                            --------                      --------

Total                                                                                       $223,111                      $214,263
                                                                                            ========                      ========
</Table>

In connection with the June 15, 2001 Forbearance Agreement, the margin on the
revolving credit loans was increased .50%.

The Forbearance Agreement was extended through August 31, 2001 (see Note 1 to
the condensed consolidated financial statements).


                                       8
<Page>

NOTE 6 - CONTINGENCY

      The U.S. Environmental Protection Agency (the "EPA") confirmed the
presence of contaminants, including dioxin, in and along the Woonasquatucket
River in Rhode Island. Prior to 1970, New England Container ("NEC"), a
wholly-owned subsidiary of the Company, operated a facility in North Providence,
Rhode Island along the Woonasquatucket River at a site where contaminants have
been found. NEC, the current owners of the property, and others have been
formally identified by the EPA as potentially responsible parties, with the site
added to the National Priority Superfund Site list in February 2000. In January
2001, the EPA announced it was proceeding with an interim soil removal project
and will be undertaking further testing and analysis to determine what, if any,
remedial action in addition to the interim soil removal will be required. On
March 26, 2001, the EPA issued a unilateral administrative order pursuant to
Section 106 (a) of the federal Comprehensive Environmental Response,
Compensation and Liability Act requiring NEC and the other potentially
responsible parties to perform the interim soil removal project. In an
Environmental Engineering and Cost Analysis issued in September 2000, the EPA
has estimated that the total cost for implementation of the work covered by the
unilateral administrative order will be $2.5 million. NEC is currently working
with EPA and three other participating respondents to the unilateral
administrative order to implement a scope of work conditionally approved by the
EPA by letter dated July 25, 2001.

      Although NEC no longer operates the facility, and did not operate the
facility at the time the Company acquired the outstanding capital stock of NEC
in July 1998, NEC could incur liability under federal and state environmental
laws and/or as a result of civil litigation. Any resulting liability is subject
to, among other possible claims, (i) a contractual indemnity from Vincent J.
Buonanno, one of its directors and the former owner of NEC, subject to a $2.0
million limit, and (ii) a right of contribution from other potentially
responsible parties and potential insurance reimbursements. The Company entered
into a tolling agreement on July 20, 2001 with Mr. Buonanno pursuant to which he
agreed to extend the statute of limitations with respect to certain claims it
may have against him until September 4, 2001. In the same agreement, the Company
and its directors similarly agreed to such a tolling with respect to any claims
Mr. Buonanno may have against the Company or its directors. The Company is
unable to estimate the likelihood or extent of any liability for long term
remedial actions at the North Providence, Rhode Island site. However, this
matter may result in liability to NEC that could have a material adverse effect
on the Company's financial condition, cash flows and results of operations.

NOTE 7 - RESTRUCTURING EXPENSES

      During the six months ended June 30, 2001, the Company recorded
restructuring charges of approximately $13.3 million relating to the adoption by
the company of a formal plan to close its Allentown facility. This charge
includes a net present value accrual for lease and property tax obligations of
approximately $10.5 million, write-off of leasehold improvements of
approximately $1.5 million, severance and other personnel related costs of
approximately $0.4 million, and other miscellaneous costs of approximately $0.9
million. Cash expenditures of $0.3 million were incurred as of June 30, 2001.
Management anticipates the closing of the facility by year-end.

<Table>
<S>                                                     <C>
                                                    (In millions)
            Restructuring charges                       $13.3
            Charges and payments:
                Severance and retention                  (0.1)
                Asset disposal                             --
                Lease termination and property tax
                   obligations                             --
                Other                                    (0.2)
                                                        -----
            Reserve balance, June 30, 2001              $13.0
                                                        =====
</Table>

      In addition, the Company recorded approximately $2.9 million in
professional fees during the six months ended June 30, 2001 related to the
financial restructuring as discussed in Note 1 to the condensed consolidated
financial statements.

NOTE 8 - INCOME TAXES

      The Company recorded a valuation allowance of $28.8 million during the
three months ended June 30, 2001. Based upon the tax impact of the proposed
restructuring, management has determined that it is more likely than not that
the benefit of the cumulative net operating loss and the current net operating
loss will not be utilized. Therefore, a valuation allowance has been recorded
against the deferred tax asset associated with the cumulative net operating
losses (NOLs).

NOTE 9 - OTHER TRANSACTIONS

      For the three months ended June 30, 2001, other income, net included
approximately a $1.0 million gain from insurance proceeds due to a fire at one
of the Company's facilities in September 2000.


                                       9
<Page>

NOTE 10 - SEGMENT INFORMATION

<Table>
<Caption>
                                               Three months ended         Six months ended
                                                    June 30,                 June 30,
                                               2001         2000         2001         2000
                                               ----         ----         ----         ----
                                                              (Unaudited)
                                                            (In Thousands)
<S>                                          <C>         <C>          <C>          <C>
Sales:
  Containers                                 $ 53,790    $  56,377    $ 107,426    $ 114,664
  Services                                     12,196       15,139       24,254       30,450
                                             --------    ---------    ---------    ---------

                                               65,986       71,516      131,680      145,114
Intersegment sales:
  Containers                                    1,211        1,261        2,079        2,481
  Services                                         --           --           --           --
                                             --------    ---------    ---------    ---------
                                                1,211        1,261        2,079        2,481

Net sales:
  Containers                                   52,579       55,116      105,347      112,183
  Services                                     12,196       15,139       24,254       30,450
                                             --------    ---------    ---------    ---------

Consolidated net sales                       $ 64,775    $  70,255    $ 129,601    $ 142,633
                                             ========    =========    =========    =========

Earnings before interest, income taxes,
  depreciation and amortization
  (EBITDA)(1):
     Containers                              $ (4,895)   $   4,001    $  (1,562)   $   9,524
     Services                                  (4,960)       3,559       (3,105)       7,454
                                             --------    ---------    ---------    ---------
                                               (9,855)       7,560       (4,667)      16,978

Interest expense                                6,060        5,675       12,149       11,280
Other (income) expense, net                      (964)          64         (968)         123
Depreciation and amortization expense           6,373        7,799       13,097       15,659
                                             --------    ---------    ---------    ---------


Consolidated loss before income taxes        $(21,324)   $  (5,978)   $ (28,945)   $ (10,084)
                                             ========    =========    =========    =========


Depreciation and amortization expense:
  Containers                                 $  3,107    $   3,155    $   6,217    $   6,366
  Services                                      3,266        4,644        6,880        9,293
                                             --------    ---------    ---------    ---------

Consolidated depreciation and amortization
  expense                                    $  6,373    $   7,799    $  13,097    $  15,659
                                             ========    =========    =========    =========
</Table>

(1)   EBITDA should not be considered a substitute for net income, cash flow
      from operating activities or other cash flow statement data prepared in
      accordance with generally accepted accounting standards or as an
      alternative to net income or as an indicator of operating performance or
      cash flow as a measure of liquidity. EBITDA is presented here only to
      provide additional information with respect to the Company's ability to
      satisfy debt service. While EBITDA is frequently used as a measure of
      operations and the ability to meet debt service requirements, it is not
      necessarily comparable to other similarly titled captions of other
      companies due to potential inconsistencies in the method of calculation.


                                       10
<Page>

NOTE 11 - GUARANTOR SUBSIDIARIES

      The Company's payment obligations under the Notes are fully,
unconditionally, jointly and severally guaranteed by its current domestic
subsidiaries, principally: Russell-Stanley Corp. ("RSC"), Container Management
Services ("CMS") and NEC (collectively, the "Guarantor Subsidiaries"). Each of
the Guarantor Subsidiaries is a direct or indirect wholly-owned subsidiary of
the Company. The Company's payment obligations under the Notes are not
guaranteed by the remaining subsidiary, Hunter (the "Non-Guarantor Subsidiary").
The obligations of each Guarantor Subsidiary under their guarantee of the Notes
are subordinated to each subsidiary's obligations under their guarantee of the
Senior Credit Facility.

      Presented on the next page is condensed combining financial information
for the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor
Subsidiary. In the Company's opinion, separate financial statements and other
disclosures concerning each of the Guarantor Subsidiaries would not provide
additional information that is material to investors. Therefore, the Guarantor
Subsidiaries are combined in the presentation on the next page.

      Investments in subsidiaries are accounted for by the Parent Company using
the equity method. Earnings of subsidiaries are, therefore, reflected in the
Parent Company's investments in and advances to/from subsidiaries accounts and
earnings (losses). The elimination entries eliminate investments in
subsidiaries, related stockholders' equity and other intercompany balances and
transactions.


                                       11
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                 Parent     Guarantor    Non-Guarantor
                                 Company   Subsidiaries   Subsidiary    Eliminations  Consolidated
                                 -------   ------------   ----------    ------------  ------------
<S>                              <C>         <C>            <C>           <C>           <C>
NET SALES                        $     --    $ 55,941       $9,122        $   (288)     $ 64,775

COST OF SALES                          --      47,319        6,840            (288)       53,871
                                 --------    --------       ------        --------      --------

GROSS PROFIT                           --       8,622        2,282              --        10,904

TOTAL EXPENSES                         --      25,834        1,298              --        27,132
                                 --------    --------       ------        --------      --------

(LOSS) INCOME FROM OPERATIONS          --     (17,212)         984              --       (16,228)

EQUITY LOSS                       (43,488)         --           --          43,488            --

INTEREST EXPENSE                      520       5,234          306              --         6,060

OTHER INCOME - net                     --        (964)          --              --          (964)
                                 --------    --------       ------        --------      --------

(LOSS) INCOME BEFORE INCOME
     TAXES                        (44,008)    (21,482)         678          43,488       (21,324)

PROVISION (BENEFIT) FOR INCOME
     TAXES                           (231)     22,329          355              --        22,453
                                 --------    --------       ------        --------      --------

NET (LOSS) INCOME                $(43,777)   $(43,811)      $  323        $ 43,488      $(43,777)
                                 ========    ========       ======        ========      ========
</Table>


                                       12
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2000
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                  Parent       Guarantor    Non-Guarantor
                                  Company    Subsidiaries    Subsidiary    Eliminations  Consolidated
                                  -------    ------------    ----------    ------------  ------------
<S>                               <C>          <C>             <C>           <C>           <C>
NET SALES                         $    --      $ 61,114        $9,410        $  (269)      $ 70,255

COST OF SALES                          --        51,493         7,095           (269)        58,319
                                  -------      --------        ------        -------       --------

GROSS PROFIT                           --         9,621         2,315             --         11,936

TOTAL EXPENSES                         --        10,669         1,506             --         12,175
                                  -------      --------        ------        -------       --------

(LOSS) INCOME FROM OPERATIONS          --        (1,048)          809             --           (239)

EQUITY LOSS                        (3,807)           --            --          3,807             --

INTEREST EXPENSE                      528         4,761           386             --          5,675

OTHER EXPENSE - net                    --            64            --             --             64
                                  -------      --------        ------        -------       --------

(LOSS) INCOME BEFORE
   INCOME TAXES                    (4,335)       (5,873)          423          3,807         (5,978)
PROVISION (BENEFIT) FOR
   INCOME TAXES                      (149)       (1,863)          220             --         (1,792)
                                  -------      --------        ------        -------       --------

NET (LOSS) INCOME                 $(4,186)     $ (4,010)       $  203        $ 3,807       $ (4,186)
                                  =======      ========        ======        =======       ========
</Table>


                                       13
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                    Parent       Guarantor    Non-Guarantor
                                    Company    Subsidiaries     Subsidiary    Eliminations    Consolidated
                                    -------    ------------     ----------    ------------    ------------
<S>                                 <C>          <C>             <C>            <C>            <C>
NET SALES                           $     --     $ 112,417       $17,763        $   (579)      $ 129,601

COST OF SALES                             --        94,157        13,305            (579)        106,883
                                    --------     ---------       -------        --------       ---------

GROSS PROFIT                              --        18,260         4,458              --          22,718

TOTAL EXPENSES                            --        37,775         2,707              --          40,482
                                    --------     ---------       -------        --------       ---------

(LOSS) INCOME FROM OPERATIONS             --       (19,515)        1,751              --         (17,764)

EQUITY LOSS                          (48,453)           --            --          48,453              --

INTEREST EXPENSE                       1,045        10,410           694              --          12,149

OTHER INCOME - net                        --          (968)           --              --            (968)
                                    --------     ---------       -------        --------       ---------

(LOSS) INCOME BEFORE INCOME
     TAXES                           (49,498)      (28,957)        1,057          48,453         (28,945)

PROVISION (BENEFIT) FOR INCOME
     TAXES                              (386)       19,973           580              --          20,167
                                    --------     ---------       -------        --------       ---------

NET (LOSS) INCOME                   $(49,112)    $ (48,930)      $   477        $ 48,453       $ (49,112)
                                    ========     =========       =======        ========       =========
</Table>


                                       14
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                    Parent      Guarantor    Non-Guarantor
                                    Company    Subsidiaries    Subsidiary    Eliminations   Consolidated
                                    -------    ------------    ----------    ------------   ------------
<S>                                 <C>         <C>             <C>            <C>           <C>
NET SALES                           $    --     $ 124,675       $18,543        $  (585)      $ 142,633

COST OF SALES                            --       102,652        14,186           (585)        116,253
                                    -------     ---------       -------        -------       ---------

GROSS PROFIT                             --        22,023         4,357             --          26,380

TOTAL EXPENSES                           --        22,133         2,928             --          25,061
                                    -------     ---------       -------        -------       ---------

(LOSS) INCOME FROM OPERATIONS            --          (110)        1,429             --           1,319

EQUITY LOSS                          (6,313)           --            --          6,313              --

INTEREST EXPENSE                      1,064         9,492           724             --          11,280

OTHER EXPENSE - net                      --           123            --             --             123
                                    -------     ---------       -------        -------       ---------

(LOSS) INCOME BEFORE INCOME
     TAXES                           (7,377)       (9,725)          705          6,313         (10,084)

PROVISION (BENEFIT) FOR INCOME
     TAXES                             (318)       (3,075)          368             --          (3,025)
                                    -------     ---------       -------        -------       ---------

NET (LOSS) INCOME                   $(7,059)    $  (6,650)      $   337        $ 6,313       $  (7,059)
                                    =======     =========       =======        =======       =========
</Table>


                                       15
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                  JUNE 30, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                                  Parent       Guarantor     Non-Guarantor
                                                  Company     Subsidiaries     Subsidiary   Eliminations    Consolidated
                                                  -------     ------------     ----------   ------------    ------------
<S>                                               <C>          <C>               <C>          <C>            <C>
ASSETS
CURRENT ASSETS
          Cash                                    $     --     $   7,425         $    --      $     --       $   7,425
          Accounts receivable - net                     --        24,197           4,239            --          28,436
          Inventories                                   --        18,766           2,101            --          20,867
          Prepaids and other current
               assets - net                             --         2,004             335           602           2,941
                                                  --------     ---------         -------      --------       ---------
          Total current assets                          --        52,392           6,675           602          59,669
                                                  --------     ---------         -------      --------       ---------

PROPERTY, PLANT AND
          EQUIPMENT - net                               --        79,253           5,235            --          84,488
                                                  --------     ---------         -------      --------       ---------

OTHER ASSETS
          Goodwill and other
               intangibles - net                        --        84,937          16,516            --         101,453
          Deferred financing costs - net                --         5,661              --            --           5,661
          Other noncurrent assets                       --           309              --            --             309
          Intercompany advances                     16,154        47,404             137       (63,695)             --
          Investment in subsidiaries               (31,284)           --              --        31,284              --
                                                  --------     ---------         -------      --------       ---------
TOTAL ASSETS                                      $(15,130)    $ 269,956         $28,563      $(31,809)      $ 251,580
                                                  ========     =========         =======      ========       =========

LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES
          Accounts payable, accrued expenses
               and income taxes payable           $ (4,514)    $  42,817         $ 3,867      $ 11,793       $  53,963
          Current portion of long-term debt         19,997       196,658           6,456            --         223,111
          Deferred taxes - net                          --         2,179              --          (419)          1,760
                                                  --------     ---------         -------      --------       ---------
          Total current liabilities                 15,483       241,654          10,323        11,374         278,834
OTHER NONCURRENT
          LIABILITIES                                   --         1,230             340            --           1,570
DEFERRED TAXES - NET                                    --        20,329           1,104       (10,918)         10,515
                                                  --------     ---------         -------      --------       ---------
          Total liabilities                         15,483       263,213          11,767           456         290,919
INTERCOMPANY ADVANCES                                   --        55,695           7,128       (62,823)             --
TOTAL STOCKHOLDERS'
         (DEFICIT) EQUITY                          (30,613)      (48,952)          9,668        30,558         (39,339)
                                                  --------     ---------         -------      --------       ---------
TOTAL LIABILITIES AND
          STOCKHOLDERS' (DEFICIT) EQUITY          $(15,130)    $ 269,956         $28,563      $(31,809)      $ 251,580
                                                  ========     =========         =======      ========       =========
</Table>


                                       16
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2000
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                Parent       Guarantor     Non-Guarantor
                                                Company     Subsidiaries    Subsidiary    Eliminations   Consolidated
                                                -------     ------------    ----------    ------------   ------------
<S>                                             <C>          <C>             <C>            <C>            <C>
ASSETS
CURRENT ASSETS
     Cash and cash equivalents                  $     --     $   1,077       $    --        $     --       $  1,077
     Accounts receivable - net                        --        23,588         3,431              --         27,019
     Inventories                                      --        20,044         2,614              --         22,658
     Prepaids and other current assets - net          --          (427)          378           2,591          2,542
                                                --------     ---------       -------        --------       --------
          Total current assets                        --        44,282         6,423           2,591         53,296
                                                --------     ---------       -------        --------       --------
PROPERTY, PLANT AND
  EQUIPMENT - net                                     --        81,888         5,709              --         87,597
                                                --------     ---------       -------        --------       --------
OTHER ASSETS
     Goodwill and other intangibles - net             --        86,180        16,964              --        103,144
     Deferred financing costs - net                   --         6,173            --              --          6,173
     Other noncurrent assets                          --           183            --              --            183
     Deferred tax benefit - net                       --        20,168            --         (10,744)         9,424
     Intercompany advances                        17,199        37,436            69         (54,704)            --
     Investment in subsidiaries                   17,280            --            --         (17,280)            --
                                                --------     ---------       -------        --------       --------
TOTAL ASSETS                                    $ 34,479     $ 276,310       $29,165        $(80,137)      $259,817
                                                ========     =========       =======        ========       ========

LIABILITIES AND STOCKHOLDERS'
  EQUITY
CURRENT LIABILITIES
    Accounts payable and accrued
        expenses                                $     --     $  28,526       $ 3,509        $     89       $ 32,124
    Income taxes payable                          (4,129)        1,246            29           2,854             --
    Current portion of long-term debt             19,997       186,627         7,639              --        214,263
    Deferred taxes - net                              --         2,180            --            (420)         1,760
                                                --------     ---------       -------        --------       --------
   Total current liabilities                      15,868       218,579        11,177           2,523        248,147
DEFERRED TAXES - net                                  --         9,627         1,119         (10,746)            --
OTHER NONCURRENT
     LIABILITIES                                      --         1,205           523              --          1,728
                                                --------     ---------       -------        --------       --------
          Total liabilities                       15,868       229,411        12,819          (8,223)       249,875
INTERCOMPANY ADVANCES                                 --        46,922         7,043         (53,965)            --
TOTAL STOCKHOLDERS' EQUITY                        18,611           (23)        9,303         (17,949)         9,942
                                                --------     ---------       -------        --------       --------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                          $ 34,479     $ 276,310       $29,165        $(80,137)      $259,817
                                                ========     =========       =======        ========       ========
</Table>


                                       17
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                            Parent        Guarantor   Non-Guarantor
                                            Company     Subsidiaries    Subsidiary   Eliminations   Consolidated
                                            -------     ------------    ----------   ------------   ------------
<S>                                        <C>            <C>            <C>           <C>            <C>
CASH FLOWS FROM
  OPERATING ACTIVITIES:
  Net (loss) income                        $(49,112)      $(48,930)      $   477       $ 48,453       $(49,112)
  Adjustments to reconcile net
    (loss) income to net cash
    provided by operating activities:
    Equity loss                              48,453             --            --        (48,453)            --
    Depreciation and amortization               512         12,398           699             --         13,609
    Other changes                               147         43,708           272             --         44,127
                                           --------       --------       -------       --------       --------
      Net cash provided by
        operating activities                     --          7,176         1,448             --          8,624
                                           --------       --------       -------       --------       --------

CASH FLOWS USED IN
  INVESTING ACTIVITIES                           --         (7,793)         (138)            --         (7,931)
                                           --------       --------       -------       --------       --------

CASH FLOWS PROVIDED BY (USED IN)
  FINANCING ACTIVITIES                           --          6,866        (1,042)            --          5,824
                                           --------       --------       -------       --------       --------

EFFECT OF EXCHANGE RATE CHANGES
  ON CASH                                        --             --          (169)            --           (169)
                                           --------       --------       -------       --------       --------

NET CHANGE IN CASH                               --          6,249            99             --          6,348

CASH, BEGINNING OF PERIOD                        --          1,251          (174)            --          1,077
                                           --------       --------       -------       --------       --------

CASH, END OF PERIOD                        $     --       $  7,500       $   (75)      $     --       $  7,425
                                           ========       ========       =======       ========       ========
</Table>


                                       18
<Page>

                 RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                       Parent       Guarantor    Non-Guarantor
                                       Company     Subsidiaries    Subsidiary   Eliminations  Consolidated
                                       -------     ------------    ----------   ------------  ------------
<S>                                    <C>           <C>            <C>           <C>           <C>
CASH FLOWS FROM OPERATING
  ACTIVITIES:
  Net (loss) income                    $(7,059)      $ (6,650)      $   337       $ 6,313       $ (7,059)
  Adjustments to reconcile net
    (loss) income to net cash
    provided by operating activities:
    Equity loss                          6,313             --            --        (6,313)            --
    Depreciation and amortization          475         14,789           870            --         16,134
    Other changes                          130         (7,953)         (165)           --         (7,988)
                                       -------       --------       -------       -------       --------
      Net cash provided by
        operating activities              (141)           186         1,042            --          1,087
                                       -------       --------       -------       -------       --------

CASH FLOWS USED IN
  INVESTING ACTIVITIES                      --        (10,120)         (580)           --        (10,700)
                                       -------       --------       -------       -------       --------

CASH FLOWS PROVIDED BY
  FINANCING ACTIVITIES                      --         10,492           (77)           --         10,415
                                       -------       --------       -------       -------       --------

EFFECT OF EXCHANGE RATE CHANGES
  ON CASH                                   --             --          (243)           --           (243)
                                       -------       --------       -------       -------       --------

NET CHANGE IN CASH                        (141)           558           142            --            559

CASH,  BEGINNING OF PERIOD                  --          1,022          (318)           --            704
                                       -------       --------       -------       -------       --------

CASH,  END OF PERIOD                   $  (141)      $  1,580       $  (176)      $    --       $  1,263
                                       =======       ========       =======       =======       ========
</Table>


                                       19
<Page>

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

THREE MONTH PERIOD ENDED JUNE 30, 2001 COMPARED TO THREE MONTH PERIOD ENDED JUNE
30, 2000

NET SALES

      Net sales decreased 7.8 % to $64.8 million in 2001 from $70.3 million in
2000. Our container manufacturing division's net sales decreased 4.6% to $52.6
million in 2001, from $55.1 million in 2000, due primarily to lower unit volumes
reflective of a soft economy. Net sales in our services division decreased 19.4%
to $12.2 million in 2001 from $15.1 million in 2000 due primarily to planned
lower trip lease volumes in plastic services and lower steel reconditioning
revenues, which were partially offset by higher average selling prices. Our
plastic services drum business completed its transition from a leasing to
reconditioning business model late in the second quarter 2001.

GROSS PROFIT

      Gross profit decreased $1.0 million to $10.9 million in 2001 from $11.9
million in 2000, primarily due to the lower unit volumes. Gross profit as a
percentage of net sales decreased to 16.8% in 2001 from 17.0% in 2000 as a
result.

OPERATING EXPENSES

      Operating expenses (excluding restructured operations and financial
restructuring), decreased slightly to $12.0 million in 2001 compared to $12.2
million in 2000 and as a percentage of net sales, operating expenses were 18.6%
compared to 17.3% in 2000.

RESTRUCTURING EXPENSES

      During the three months ended June 30, 2001, we recorded restructured
operations charges of approximately $13.3 million relating to the adoption by us
of a formal action plan to close our Allentown facility. The provision included
a net present value accrual for the lease and property tax obligations of
approximately $10.5 million, write-off of leasehold improvements of
approximately $1.5 million, severance and other personnel related costs of
approximately $0.4 million, and other miscellaneous costs of approximately $0.9
million. Cash expenditures of $0.3 million were incurred as of June 30, 2001. We
recorded approximately $1.8 million in professional fees related to the
financial restructuring as discussed in Note 1 to the condensed consolidated
financial statements. We did not record any restructured operations charges or
financial restructuring charges for the three months ended June 30, 2000.

LOSS FROM OPERATIONS

      Loss from operations increased by $16.0 million to $16.2 million in 2001
from $0.2 million in 2000 as a result of the factors described above.

INTEREST EXPENSE

      Interest expense was $6.1 million in 2001 compared with $5.7 million in
2000. The increase in interest expense is the result of increased debt levels.

OTHER (INCOME) EXPENSE, NET

      Other income, net, increased $1.1 million to $1.0 million in 2001 from
other expense, net, of $0.1 million in 2000 due to a gain of approximately $1.0
million from insurance proceeds due to a fire at one of the Company's facilities
in September 2000.


                                       20
<Page>

LOSS BEFORE INCOME TAXES

      In 2001, the loss before income taxes was $21.3 million versus $6.0
million in 2000, as a result of the factors described above.

INCOME TAX PROVISION (BENEFIT)

      We recorded a valuation allowance of $28.8 million during the three months
ended June 30, 2001. Based upon the tax impact of the proposed restructuring,
management has determined that it is more likely than not that the benefit of
the cumulative net operating loss and the current net operating loss will not be
utilized. Therefore, a valuation allowance has been recorded against the
deferred tax asset associated with the cumulative net operating losses (NOLs).
In 2000, the effective tax rate on the loss was 30.0%, lower than the statutory
federal income tax rate due to the non-deductible portion of goodwill associated
with our acquisitions and higher foreign income taxes.

NET LOSS

      In 2001, the net loss was $43.8 million versus $4.2 million in 2000, as a
result of the factors described above.

SIX MONTH PERIOD ENDED JUNE 30, 2001 COMPARED TO SIX MONTH PERIOD ENDED JUNE 30,
2000

NET SALES

      Net sales decreased 9.1 % to $129.6 million in 2001 from $142.6 million in
2000. Our container manufacturing division's net sales decreased 6.1% to $105.3
million in 2001, from $112.2 million in 2000, due principally to the economic
slowdown, particularly in the chemicals and automotive markets which adversely
effected container unit volumes. Net sales in our services division decreased
20.3% to $24.3 million in 2001 from $30.5 million in 2000 due primarily to a
planned rationalization in plastic services and lower steel reconditioning
revenues, which were partially offset by higher average selling prices. Our
plastic services drum business completed its transition from a leasing to
reconditioning business model late in the second quarter 2001.

GROSS PROFIT

      Gross profit decreased $3.7 million to $22.7 million in 2001 from $26.4
million in 2000, primarily due to the lower unit volumes. Gross profit as a
percentage of net sales decreased to 17.5% in 2001 from 18.5% in 2000 as a
result.

OPERATING EXPENSES

      Operating expenses (excluding restructured operations and financial
restructuring), decreased slightly to $24.3 million in 2001 compared to $25.1
million in 2000 and as a percentage of net sales, operating expenses were 18.8%
compared to 17.6% in 2000.

RESTRUCTURING EXPENSES

      During the six months ended June 30, 2001, we recorded restructured
operations charges of approximately $13.3 million relating to the adoption by us
of a formal action plan to close our Allentown facility. The provision included
a net present value accrual for the lease and property tax obligations of
approximately $10.5 million, write-off of leasehold improvements of
approximately $1.5 million, severance and other personnel related costs of
approximately $0.4 million, and other miscellaneous costs of approximately $0.9
million. Cash expenditures of $0.3 million were incurred as of June 30, 2001. We
recorded approximately $2.9 million in professional fees related to the
financial restructuring as discussed in Note 1 to the condensed consolidated
financial statements. We did not record any restructured operations charges or
financial restructuring charges for the six months ended June 30, 2000.


                                       21
<Page>

INTEREST EXPENSE

      Interest expense was $12.1 million in 2001 compared with $11.3 million in
2000. The increase in interest expense is the result of increased debt levels.

OTHER (INCOME) EXPENSE, NET

      Other income, net, increased $1.1 million to $1.0 million in 2001 from
other expense, net, of $0.1 million in 2000 due to a gain of approximately $1.0
million from insurance proceeds due to a fire at one of the Company's facilities
in September 2000.

LOSS BEFORE INCOME TAXES

      In 2001, the loss before income taxes was $28.9 million versus $10.1
million in 2000, as a result of the factors described above.

INCOME TAX PROVISION (BENEFIT)

      We recorded a valuation allowance of $28.8 million during the six months
ended June 30, 2001. Based upon the tax impact of the proposed restructuring,
management has determined that it is more likely than not that the benefit of
the cumulative net operating loss and the current net operating loss will not be
utilized. Therefore, a valuation allowance has been recorded against the
deferred tax asset associated with the cumulative NOLs. In 2000, the effective
tax rate on the loss was 30.0%, lower than the statutory federal income tax rate
due to the non-deductible portion of goodwill associated with our acquisitions
and higher foreign income taxes.

NET LOSS

      In 2001, the net loss was $49.1 million versus $7.1 million in 2000, as a
result of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

      Our principal uses of cash are for capital expenditures, interest expense,
and working capital. We utilize funds generated from operations and borrowings
to meet these requirements. For the six months ended June 30, 2001, net cash
provided by operating activities was $8.6 million compared to $1.1 million for
the six months ended June 30, 2000. This change is due to improved working
capital. For the six months ended June 30, 2001 and 2000, we made capital
expenditures of $7.9 million and $10.7 million. We currently have no capital
commitments outside the ordinary course of business. Our principal working
capital requirements are to finance accounts receivable and inventories. As of
June 30, 2001, we had total indebtedness of approximately $223.1 million, $74.0
million of which was senior indebtedness.

      The Company previously announced on January 26, 2001 that it retained The
Blackstone Group, L.P. in order to assist in developing a financial
restructuring plan and that an ad-hoc committee of its senior subordinated note
holders was organized. The Company elected not to make the interest payment due
February 15, 2001 on its Senior Subordinated Notes. The 30-day grace period to
make the interest payment to cure the default expired on March 15, 2001 and as a
consequence, the Senior Subordinated Notes, revolving credit loans and term loan
are callable and therefore have been classified as current liabilities in the
December 31, 2000 and June 30, 2001 consolidated balance sheets. The Company and
its lenders under the Credit Agreement entered into a 60-day Forbearance and
Amendment Agreement (the Forbearance Agreement) dated February 15, 2001 pursuant
to which the lenders will not call the Company's outstanding debt through the
termination of the Forbearance Agreement and will continue to allow the Company
to draw on their revolving credit facility to satisfy working capital needs
subject to certain limitations. In addition, the interest rate on the Company's
term loan and the revolving credit loan margin was increased .50% and the
facility's commitment was temporarily reduced from $75.0 million to $60.0
million. The Forbearance Agreement was further extended an additional sixty days
until


                                       22
<Page>

June 15, 2001 with an additional .25% interest rate increase in effect for the
period. On June 15, 2001 the Forbearance Agreement was extended until August 31,
2001 with an additional .50% interest rate increase on the Company's revolving
credit loan margin in effect for the period. The Forbearance Agreement
terminates on the earlier of (a) the occurrence of an additional event of
default (as defined); (b) August 31, 2001 or (c) the date on which the Senior
Subordinated Notes are accelerated. In connection with this agreement, a portion
of the Company's revolving credit loan availability is subject to a monthly
borrowing base calculation applied to eligible accounts receivable and
inventory, not to exceed $30.0 million. The remaining $55.0 million commitment
under the revolving credit and term loan facility is not subject to this
calculation.

      The Company announced on July 17, 2001 that it reached an agreement in
principle on a term sheet for a restructuring that will significantly
de-leverage the Company's balance sheet by eliminating a significant amount of
debt and related interest cost. Under terms of the proposed restructuring, bank
lenders have indicated they will support an amendment to the existing revolving
credit and term loan facility providing for a $95.0 million commitment which is
an increase of $10.0 million over the current level. On the effective date of
the restructuring, the Company will have unutilized availability of
approximately $20.0 million. Management expects to obtain an extended
forbearance agreement beyond August 31, 2001 through the transaction's closing
date. Note holders will exchange $150.0 million of the existing 10.875% Senior
Subordinated Notes into all of the equity of the reorganized company and $20.0
million of new unregistered Senior Subordinated Notes due seven years from the
effective date. Interest on the new notes will be paid-in-kind until September
30, 2003 and payable in cash thereafter if certain financial conditions are met.

      An ad-hoc committee of note holders whose members hold more than 90% of
the aggregate principal amount of the existing Senior Subordinated Notes has
indicated they will support the proposed restructuring. The restructuring will
proceed as an exchange offer to existing holders of the Senior Subordinated
Notes. The restructuring is subject to documentation and other customary
conditions and is expected to be completed within approximately three months.
The restructuring will have no effect on trade creditors or customers.

      For the period ended June 30, 2001, approximately $2.9 million in
professional fees were incurred in connection with the financial restructuring.

      The consolidated financial statements of the Company indicate that as a
result of the above matters, at June 30, 2001, current liabilities exceeded
current assets by $208.2 million. Historically, cash flows generated from
operations, supplemented by the unused borrowing capacity under the Revolving
Credit Agreement, have been sufficient to pay the Company's debts as they come
due, provide for capital expenditures and meet its other cash requirements. The
consolidated financial statements of the Company presented herein do not reflect
any adjustments that could result from the Company's financial restructuring
plan.

EFFECT OF INFLATION

      Inflation generally affects our business by increasing the interest
expense of floating rate indebtedness and by increasing the cost of raw
materials, labor and equipment. We do not believe that inflation has had any
material effect on our business during the periods discussed herein.

FORWARD LOOKING STATEMENTS

      Readers are cautioned that the Results of Operations, Liquidity and
Capital Resources and other sections of this report contain forward-looking
statements that are based on management's current expectations and projections
about future events. Although we believe that our assumptions made in connection
with the forward-looking statements are reasonable, we cannot assure you that
our assumptions and expectations will prove to have been correct. We undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. A
description of some of the factors that could cause actual results to differ
materially from expectations expressed in the Company's forward-looking
statements set


                                       23
<Page>

forth in the Company's Form S-4 (File No. 333-76057) filed with the Securities
and Exchange Commission under the caption "Forward-Looking Statements" is
incorporated herein by reference.

RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations." SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The Company does not believe that the adoption of
SFAS 141 will have a significant impact on its financial statements.

      In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", which is effective
January 1, 2002. SFAS 142 requires, among other things, the discontinuance of
goodwill amortization. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles,
reclassification of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential future
impairments of goodwill. SFAS 142 also requires the Company to complete a
transitional goodwill impairment test six months from the date of adoption. The
Company is currently assessing but has not yet determined the impact of SFAS 142
on its financial position and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

MANAGING FOREIGN CURRENCY AND INTEREST RATE EXPOSURE

      The Company is exposed to market risk from foreign currency exchange rate
fluctuations as measured against the U.S. dollar and interest rates. We manage
this exposure through internal policies and procedures and the use of derivative
financial instruments when considered appropriate. As a matter of policy, the
Company does not speculate in financial markets and therefore does not hold or
issue derivative financial instruments for trading purposes.

INTEREST RATE RISK

      The revolving indebtedness under our senior credit facility bears interest
at a floating rate. Our primary exposure to interest rate risk is as a result of
changes in interest expense related to this indebtedness due to changes in
market interest rates. A 10% increase in interest rates at June 30, 2001 would
not have a material adverse affect on our results of operations, financial
condition or cash flows.

FOREIGN CURRENCY EXCHANGE RATE RISK

      We have operations in Canada and sales denominated in Canadian dollars.
Our primary exposure to foreign currency exchange rate risk is as a result of
changes in the exchange rate between the U.S. dollar and the Canadian dollar. We
currently do not maintain any derivative financial instruments to limit our
exposure to this risk. The Company has also entered into foreign currency
forwards to hedge the currency exposure of firm fixed asset purchases
denominated in Deutsche Marks.


                                       24
<Page>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

            Not Applicable

ITEM 2. CHANGES IN SECURITIES

            Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

            The Company elected not to make the interest payment of $8.3 million
due February 15, 2001 on its Senior Subordinated Notes. The 30-day grace period
to make the interest payment to cure the default expired on March 15, 2001. The
Company and its lenders under the Credit Agreement have entered into a 60-day
Forbearance and Amendment Agreement (the Forbearance Agreement) dated February
15, 2001 pursuant to which the lenders will not call the Company's outstanding
debt through the termination of the Forbearance Agreement and will continue to
allow the Company to draw on their revolving credit facility to satisfy working
capital needs subject to certain limitations. The Forbearance Agreement was
extended until June 15, 2001 and again was further extended until August 31,
2001 or may terminate earlier, as described in Note 1 to the condensed
consolidated financial statements. The Company does not intend to make the
August 15, 2001 interest payment on its Senior Subordinated Notes.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            Not Applicable

ITEM 5. OTHER INFORMATION

            Not Applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

            (a) Exhibits

            EXHIBIT NO.     DESCRIPTION OF EXHIBIT

             *3.1           Certificate of Incorporation of Russell-Stanley
                            Holdings, Inc.

             *3.2           By-Laws of Russell-Stanley Holdings, Inc.

             *3.3           Amended and Restated Certificate of Incorporation of
                            Russell-Stanley Corp.

             *3.4           By-Laws of Russell-Stanley Corp.

             *3.5           Articles of Incorporation of Container Management
                            Services, Inc.

             *3.6           By-Laws of Container Management Services, Inc.

             *3.7           Restated Articles of Incorporation of New England
                            Container Co., Inc.


                                 25
<Page>

            EXHIBIT NO.     DESCRIPTION OF EXHIBIT

             *3.8           Amended and Restated By-Laws of New England
                            Container Co., Inc.

             *3.9           Articles of Incorporation of Russell-Stanley, Inc.

             *3.10          By-Laws of Russell-Stanley, Inc.

             *3.11          Certificate of Incorporation of RSLPCO, Inc.

             *3.12          By-Laws of RSLPCO, Inc.

             *3.13          Certificate of Limited Partnership of
                            Russell-Stanley, L.P.

             *3.14          Agreement of Limited Partnership of Russell-Stanley,
                            L.P.

             *4.1           Indenture, dated as of February 10, 1999, by and
                            among Russell-Stanley Holdings, Inc., the guarantors
                            named therein and The Bank of New York, as the
                            Trustee

             *4.2           Form of 10 7/8% Senior Subordinated Notes due 2009
                            (included as part of the Indenture filed as Exhibit
                            4.1 hereto)

             *10.1          Fifth Amended and Restated Revolving Credit and Term
                            Loan Agreement, dated as of February 10, 1999, among
                            Russell- Stanley Holdings, Inc. and its
                            subsidiaries, as borrowers, the lenders listed
                            therein and BankBoston, N.A. as administrative
                            agent, and Goldman Sachs Credit Partners, L.P., as
                            syndication agent

             *10.2          Stock Purchase Agreement dated as of July 21, 1998,
                            among Vincent J. Buonanno, New England Container
                            Co., Inc. and Russell-Stanley Holdings, Inc.

             *10.3          Stock Purchase Agreement dated as of July 1, 1997,
                            among Mark E. Daniels, Robert E. Daniels, Mark E.
                            Daniels Irrevocable Family Trust, R.E. Daniels
                            Irrevocable Family Trust, Container Management
                            Services, Inc. and Russell-Stanley Corp.

             *10.4          Share Purchase Agreement dated as of October 24,
                            1997, among Michael W. Hunter, John D. Hunter,
                            Michael W. Hunter Holdings Inc., John D. Hunter
                            Holdings Inc., Hunter Holdings Inc., 373062 Ontario
                            Limited, Hunter Drums Limited, Russell-Stanley
                            Holdings, Inc. and HDL Acquisition, Inc.

             *10.5          Purchase and Sale Agreement dated as of October 23,
                            1997, among Smurfit Packaging Corporation,
                            Russell-Stanley Holdings, Inc. and Russell- Stanley
                            Corp.

             *10.6          Vestar Management Agreement dated as of July 23,
                            1997, among Russell-Stanley Holdings, Inc.,
                            Russell-Stanley Corp., Container Management
                            Services, Inc. and Vestar Capital Partners


                                       26
<Page>

            EXHIBIT NO.     DESCRIPTION OF EXHIBIT

            +*10.7          Know How and Patent Licensing Agreement between
                            Mauser-Werke GmbH and Russell-Stanley Corp., dated
                            June 26, 1995

            +*10.8          Licensing Agreement between Mauser-Werke GmbH and
                            Russell-Stanley Corp., dated June 26, 1995

            +*10.9          Know How and Patent Licensing Agreement between
                            Mauser-Werke GmbH and Russell-Stanley Corp., dated
                            June 26, 1995

            +*10.10         Know How and Patent Licensing Agreement between
                            Mauser-Werke GmbH and Hunter Drums Limited, dated
                            July 31, 1996

            +*10.11         Know How and Patent Licensing Agreement between
                            Mauser-Werke GmbH and Hunter Drums Limited, dated
                            July 31, 1996

            +*10.12         Consent and Agreement between Hunter Drums Limited
                            and Mauser-Werke GmbH, dated September 29, 1997

             *10.13         1998 Stock Option Plan

             *10.15         Employment Agreement, dated October 30, 1997, among
                            Russell-Stanley, Holdings, Inc., Hunter Drums
                            Limited and Michael W. Hunter

             *10.16         Stay Pay Agreement, dated October 30, 1997, among
                            Russell-Stanley Holdings, Inc., Hunter Drums Limited
                            and Michael W. Hunter

             *10.21         Services Agreement, dated as of February 10, 1999,
                            between Russell-Stanley Holdings, Inc. and Vincent
                            J. Buonanno

             *10.22         License Agreement between Gallay SA and Hunter Drums
                            Limited, dated February 7, 1997

             *10.23         License Agreement between Gallay SA and Hunter Drums
                            Limited, dated April 16, 1987

            **10.24         Amendment No. 1 to the Fifth Amended and Restated
                            Revolving Credit and Term Loan Agreement, dated as
                            of August 11, 2000, among Russell-Stanley Holdings,
                            Inc. and its subsidiaries, as borrowers, the lenders
                            listed therein and Fleet National Bank (f/k/a
                            BankBoston, N.A.), as administrative agent, and
                            Goldman Sachs Credit Partners, L.P., as syndication
                            agent

           ***10.25         Forbearance and Amendment Agreement to the Fifth
                            Amended and Restated Revolving Credit and Term Loan
                            Agreement, dated as of February 10, 1999 among the
                            Registrant, certain of its subsidiaries, the lenders
                            party thereto and Fleet National Bank, as agent

          ****10.26         Employment and Change-In-Control Severance
                            Agreement, dated as of December 11, 2000, between
                            Russell-Stanley Holdings, Inc. and Daniel W. Miller


                                       27
<Page>

            EXHIBIT NO.     DESCRIPTION OF EXHIBIT

          ****10.27         Employment and Change-In-Control Severance
                            Agreement, dated as of December 11, 2000, between
                            Russell-Stanley Holdings, Inc. and Ronald M.
                            Litchkowski

          ****10.28         Employment and Change-In-Control Severance
                            Agreement, dated as of December 11, 2000, between
                            Russell-Stanley Holdings, Inc. and John H. Hunter

          ****10.29         Employment and Change-In-Control Severance
                            Agreement, dated as of December 11, 2000, between
                            Russell-Stanley Holdings, Inc. and David C. Garrison

         *****10.30         First Amendment to the Employment and
                            Change-In-Control Severance Agreement, dated as of
                            April 16, 2001, between Russell-Stanley Holdings,
                            Inc. and Daniel W. Miller

         *****10.31         First Amendment to the Employment and
                            Change-In-Control Severance Agreement, dated as of
                            April 16, 2001, between Russell-Stanley Holdings,
                            Inc. and Ronald M. Litchkowski

         *****10.32         First Amendment to the Employment and
                            Change-In-Control Severance Agreement, dated as of
                            April 16, 2001, between Russell-Stanley Holdings,
                            Inc. and John H. Hunter

         *****10.33         First Amendment to the Employment and
                            Change-In-Control Severance Agreement, dated as of
                            April 16, 2001, between Russell-Stanley Holdings,
                            Inc. and David C. Garrison

           ***10.34         Agreement in Principle on a Term Sheet for a
                            Financial Restructuring, dated as of July 17, 2001,
                            between Russell-Stanley Holdings, Inc., the Note
                            Holders and Bank Lenders

                *21         Subsidiaries of the Company

*This Exhibit is incorporated by reference to the Exhibit of the same number
filed as part of the Company's Registration Statement on Form S-4 (File No.
333-76057)

**This Exhibit is incorporated by reference to the Exhibit of the same number
filed as part of the Company's Form 10-Q for period ended September 30, 2000.

***This Exhibit is incorporated by reference to the Exhibits filed in the
Company's Form 8-K dated February 15, 2001,  April 20, 2001, July 2, 2001 and
July 18, 2001.

****This Exhibit is incorporated by reference to the Exhibit of the same number
filed in the Company's Form 10-K dated December 31, 2000.

*****This Exhibit is incorporated by reference to the Exhibit of the same number
filed as part of the Company's Form 10-Q for period ended March 31, 2001.

+The Registrant was afforded confidential treatment of portions of this exhibit
by the Securities and Exchange Commission. Accordingly, portions thereof have
been omitted and filed separately with the Securities and Exchange Commission.


                                       28
<Page>

(b)   Reports on Form 8-K

      A current report on Form 8-K, dated April 20, 2001, relating to a sixty
day extension of the Forbearance and Amendment Agreement, was filed April 25,
2001.

      A current report on Form 8-K, dated June 15, 2001, relating to an
additional extension of the Forbearance and Amendment Agreement, was filed July
2, 2001.

      A current report on Form 8-K, dated July 17, 2001, relating to an
agreement in principle on a term sheet for a financial restructuring was filed
July 18, 2001.

                                   SIGNATURES

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

                                        RUSSELL-STANLEY HOLDINGS, INC.


Date: August 14, 2001                   By:  /s/ RONALD M. LITCHKOWSKI
                                           -------------------------------------
                                           Ronald M. Litchkowski,
                                           Chief Financial Officer


                                       29