UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


(MARK ONE)

   X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
--------              SECURITIES EXCHANGE ACT OF 1934
                 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                FOR THE TRANSITION PERIOD FROM _______ TO _______

                           COMMISSION FILE NO. 1-5439

                             DEL LABORATORIES, INC.
             (Exact name of registrant as specified in its charter)


                DELAWARE                                      13-1953103
-----------------------------------------             --------------------------
    (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                      Identification No.)

                           178 EAB PLAZA, PO BOX 9357,
                         UNIONDALE, NEW YORK 11553-9357
              (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (516) 844-2020


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


        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 by check mark whether the registrant is an accelerated filer
        (as defined in Rule 12b-2 of the Exchange Act).

                                        YES  (X)                  NO  (  )

        The number of shares of Common Stock, $1 par value, outstanding as of
        August 4, 2004 was 9,742,140.




<PAGE>



                     DEL LABORATORIES, INC. AND SUBSIDIARIES

                                      Index




  Part I.   FINANCIAL INFORMATION
                                                                            PAGE
  Item 1.   Financial Statements:

            Consolidated Balance Sheets as of
                June 30, 2004 (unaudited) and December 31, 2003                3

            Consolidated Statements of Earnings for the three and six
                months ended June 30, 2004 and 2003 (unaudited)                4

            Consolidated Statements of Cash Flows for the six
                months ended June 30, 2004 and 2003 (unaudited)                5

            Notes to Consolidated Financial Statements (unaudited)             6

  Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations                               15

  Item 4.   Controls and Procedures                                           23



  Part II.  OTHER INFORMATION

  Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases of    24
            Equity Securities

  Item 4.   Submission of Matters to a Vote of Security Holders               24

  Item 6.   Exhibits and Reports on Form 8-K                                  25


  SIGNATURES                                                                  26



  All other schedules and compliance information called for by the instructions
  to Form 10-Q have been omitted since the required information is not present
  or not present in amounts sufficient to require submission.





                                      -2-
<PAGE>

<TABLE>
<CAPTION>





                     DEL LABORATORIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2004 AND DECEMBER 31, 2003
               (In thousands, except for share and per share data)

                                                                      June 30    December 31
                                                                        2004         2003
                                                                    ----------   ------------
                                                                    (UNAUDITED)
         ASSETS

Current assets:
<S>                                                                  <C>          <C>
         Cash and cash equivalents                                   $   2,027    $   2,113
         Accounts receivable, less allowance for doubtful accounts
            of $1,659 in 2004 and $4,391 in 2003                        78,184       75,130
         Inventories                                                   101,970       92,518
         Income taxes receivable                                         3,284         --
         Deferred income taxes                                           8,042        8,042
         Prepaid expenses and other current assets                       2,597        2,671
                                                                     ---------    ---------
                    Total current assets                               196,104      180,474

Property, plant and equipment, net                                      46,204       49,274
Intangibles arising from acquistions, net                                7,421        7,761
Goodwill                                                                 6,282        6,282
Other assets                                                            14,908       13,262
Deferred income taxes                                                    6,159        6,159
                                                                     ---------    ---------
                    Total assets                                     $ 277,078    $ 263,212
                                                                     =========    =========

         LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
         Note payable to bank                                        $   5,000    $    --
         Current portion of long-term debt                                 491        8,760
         Accounts payable                                               46,071       43,872
         Accrued liabilities                                            24,673       25,023
         Income taxes payable                                             --            307
                                                                     ---------    ---------
                    Total current liabilities                           76,235       77,962

Long-term pension liability, less current portion                        9,767        9,767
Deferred income taxes                                                    5,205        5,205
Deferred liability                                                       1,383        1,334
Long-term debt, less current portion                                    74,355       63,373
                                                                     ---------    ---------
                    Total liabilities                                  166,945      157,641
                                                                     ---------    ---------

Shareholders' equity:
         Preferred stock $ .01 par value, authorized
            1,000,000 shares; no shares issued                            --           --
         Common stock $1 par value, authorized
            20,000,000 shares; issued 10,000,000 shares                 10,000       10,000
         Additional paid-in capital                                      8,929        8,823
         Accumulated other comprehensive loss                           (2,823)      (2,594)
         Retained earnings                                              99,746       95,309
                                                                     ---------    ---------
                                                                       115,852      111,538

         Less: Treasury stock at cost, 259,756 shares
                    in 2004 and 289,308 shares in 2003                  (5,217)      (5,325)
                    Receivables for stock options exercised               (502)        (642)
                                                                     ---------    ---------
                    Total shareholders' equity                         110,133      105,571
                                                                     ---------    ---------

                    Total liabilities and shareholders' equity       $ 277,078    $ 263,212
                                                                     =========    =========


 The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




                                      -3-
<PAGE>

<TABLE>
<CAPTION>



                     DEL LABORATORIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
              (In thousands, except for share and per share data)
                                   (UNAUDITED)





                                                    THREE MONTHS ENDED               SIX MONTHS ENDED
                                                         JUNE 30                         JUNE 30
                                                  2004            2003            2004            2003
                                              ------------    ------------    ------------    ------------

<S>                                           <C>             <C>             <C>             <C>
Net sales                                     $    102,948    $     97,976    $    186,013    $    191,339

Cost of goods sold                                  52,370          47,170          93,585          92,828
Selling and administrative expenses                 43,049          40,155          82,729          79,804
Severance expenses (note 9)                             13           1,850               3           1,850
Merger expenses (note 14)                              216            --               216            --
                                              ------------    ------------    ------------    ------------

Operating income                                     7,300           8,801           9,480          16,857

Other income (expense):
   Loss on sale of building and land                   (41)           --               (41)           --
   Interest expense, net                              (784)         (1,009)         (1,749)         (2,054)
   Other income (expense), net                        (356)            107            (464)             27
                                              ------------    ------------    ------------    ------------

Earnings before income taxes                         6,119           7,899           7,226          14,830
Income taxes                                         2,362           2,959           2,789           5,565
                                              ------------    ------------    ------------    ------------
Net earnings                                  $      3,757    $      4,940    $      4,437    $      9,265
                                              ============    ============    ============    ============
Earnings per common share:
   Basic                                      $       0.39    $       0.51    $       0.46    $       0.97
                                              ============    ============    ============    ============
   Diluted                                    $       0.36    $       0.49    $       0.43    $       0.93
                                              ============    ============    ============    ============
Weighted average common shares outstanding:
   Basic                                         9,735,000       9,604,000       9,726,000       9,596,000
                                              ============    ============    ============    ============
   Diluted                                      10,361,000      10,056,000      10,372,000       9,992,000
                                              ============    ============    ============    ============








 The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




                                      -4-
<PAGE>
<TABLE>
<CAPTION>



                     DEL LABORATORIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                 (In thousands)
                                   (UNAUDITED)

                                                                        June 30

                                                                   2004         2003
                                                                   ----         ----

Cash flows provided by (used in) operating activities:
<S>                                                              <C>         <C>
Net earnings                                                     $  4,437    $  9,265
Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
Depreciation and amortization                                       4,179       4,026
Recovery on allowance for doubtful accounts                            (9)       (202)
Tax benefit on stock options exercised                                444       1,217
Loss on sale of building and land                                      41        --
Other non-cash operating items                                        320         140
Changes in operating assets and liabilities:
    Accounts receivable                                            (3,163)    (14,190)
    Inventories                                                    (9,782)     (7,506)
    Prepaid expenses and other current assets                         (55)        589
    Other assets                                                   (1,655)     (4,793)
    Accounts payable                                                2,324       7,911
    Accrued liabilities                                              (528)         98
    Deferred liability                                                 49        --
    Income taxes receivable / payable                              (3,619)        167
                                                                 --------    --------

          Net cash used in operating activities                    (7,017)     (3,278)
                                                                 --------    --------

Cash flows provided by (used in) investing activities:
    Net proceeds from sale of building and land                     4,816         235
    Property, plant and equipment additions                        (5,387)    (10,083)
                                                                 --------    --------

         Net cash used in investing activities                       (571)     (9,848)
                                                                 --------    --------

Cash flows provided by (used in) financing activities:
    Borrowing under note payable                                    5,000        --
    Principal borrowings under revolving credit agreement, net      3,000      16,000
    Principal payments under mortgages                               (199)       (104)
    Principal payment under senior notes                             --        (8,000)
    Repayment of mortgage                                            --        (3,865)
    Borrowings under mortgage and construction loan                  --        10,481
    Payment of capital lease obligations                              (55)        (51)
    Proceeds from the exercise of stock options                       201          53
    Acquisition of treasury stock                                    (429)     (1,184)
                                                                 --------    --------

          Net cash provided by financing activities                 7,518      13,330
                                                                 --------    --------

Effect of exchange rate changes on cash                               (16)         10
                                                                 --------    --------

Net increase (decrease) in cash and cash equivalents                  (86)        214

Cash and cash equivalents at beginning of year                      2,113         501
                                                                 --------    --------

Cash and cash equivalents at end of period                       $  2,027    $    715
                                                                 ========    ========

Supplemental disclosures:
Cash paid for:
    Interest                                                     $  1,766    $  2,105
    Income taxes                                                 $  6,152    $  4,246

Non-cash transactions:
    Shares tendered by optionees to exercise stock options       $    780    $  5,136
    Equipment acquired under capitalized leases                  $   --      $    543

 The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




                                      -5-
<PAGE>






                     DEL LABORATORIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
                                  (UNAUDITED)




  1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The accompanying unaudited consolidated financial statements of Del
        Laboratories, Inc. and subsidiaries ("the Company") have been prepared
        in accordance with U.S. generally accepted accounting principles for
        interim financial information and with the instructions to Form 10-Q.
        Accordingly, they do not include all of the information and footnotes
        required by U.S. generally accepted accounting principles for complete
        financial statements. Interim results are not necessarily indicative of
        results for a full year.

        A summary of the Company's critical and significant accounting policies
        are presented in its 2003 Form 10-K. Users of financial information
        produced for interim periods are encouraged to refer to the footnotes
        contained in the Form 10-K when reviewing interim financial results.

        In January 2003, the FASB issued Interpretation No. 46 "Consolidation of
        Variable Interest Entities" ("FIN No. 46"). FIN No. 46 was subject to
        significant interpretation by the FASB, and was revised and reissued in
        December 2003 ("FIN No. 46R"). FIN No. 46R states that if an entity has
        a controlling financial interest in a variable interest entity, the
        assets, the liabilities and results of activities of the variable
        interest entity should be included in the consolidated financial
        statements of the entity. The provisions of FIN No. 46 and FIN No. 46R
        are applicable for all entities that are considered special purpose
        entities ("SPE") by the end of the first reporting period ending after
        December 15, 2003. The provisions of FIN No. 46R are applicable to all
        other types of variable interest entities for reporting periods ending
        after March 15, 2004. The adoption of FIN No. 46 and FIN No. 46R did not
        have a material impact on the Company's consolidated financial
        statements.

        In the opinion of management, the accompanying interim consolidated
        financial statements contain all material adjustments, consisting only
        of normal recurring adjustments, necessary to present fairly the
        consolidated financial position, results of operations and cash flows of
        the Company for interim periods.



  2.    STOCK OPTION PLANS

        The Company applies the intrinsic value-based method of accounting
        prescribed by Accounting Principles Board Opinion No. 25, "Accounting
        for Stock Issued to Employees" (APB No. 25), and related
        interpretations, in accounting for its fixed plan stock options. Under
        APB No. 25, compensation expense would be recorded if, on the date of
        grant, the market price of the underlying stock exceeded its exercise
        price. Accordingly, no compensation cost has been recognized. Had
        compensation cost for the stock option plans been determined based on
        the fair value at the grant dates for awards under the plans, consistent
        with the alternative method set forth under SFAS No. 123, "Accounting
        for Stock-Based Compensation", and SFAS No. 148 "Accounting for
        Stock-Based Compensation-Transition and Disclosure", the Company's net
        earnings and net earnings per share would have been reduced. The
        following table illustrates the effect on net earnings and net earnings
        per share if the Company had applied the fair value recognition
        provisions of SFAS No. 123, to stock based employee compensation:





                                      -6-
<PAGE>




  2.    STOCK OPTION PLANS, CONTINUED

<TABLE>
<CAPTION>

                                                    Three Months Ended       Six Months Ended
                                                         JUNE 30                  JUNE 30
                                                         -------                  -------

                                                     2004           2003       2004        2003
                                                     ----           ----       ----        ----

<S>                                                 <C>           <C>        <C>         <C>
         Net earnings, as reported                  $ 3,757       $ 4,940    $ 4,437     $  9,265
         Deduct:  Total stock-based employee
            compensation expense determined under
            fair value based method for all awards
            net of related tax effects              $  (513)      $  (579)   $(1,037)    $ (1,148)
                                                    -------       -------    -------     --------
         Pro forma net earnings                     $ 3,244       $ 4,361    $ 3,400     $  8,117
                                                    =======       =======    =======     ========

         Earnings per share:
              Basic - as reported                   $  0.39       $  0.51    $  0.46     $   0.97
                                                    =======       =======    =======     ========
              Basic - pro forma                     $  0.33       $  0.45    $  0.35     $   0.85
                                                    =======       =======    =======     ========

              Diluted - as reported                 $  0.36       $  0.49    $  0.43     $   0.93
                                                    =======       =======    =======     ========
              Diluted - pro forma                   $  0.31       $  0.43    $  0.33     $   0.81
                                                    =======       =======    =======     ========
</TABLE>


        The fair value of each option grant was estimated at the date of grant
        using the Black-Scholes option pricing model with the following
        weighted-average assumptions for the second quarter of 2003: dividend
        yield 0%; expected lives of 5.0 years; risk-free interest rate of 2.43%;
        and expected volatility of 33.2%. The weighted-average fair value of
        options granted during the second quarter of 2003 was $7.48. The Company
        did not issue any new stock options during the second quarter of 2004.

        Weighted-average assumptions for the first six months of 2003, were:
        dividend yield 0%; expected lives of 5.0 years; risk-free interest rate
        of 2.51%; and expected volatility of 33.2%. The weighted-average fair
        value of options granted during the first six months of 2003 was $7.36.
        The Company did not issue any new stock options during the first six
        months of 2004.

        During the first quarter of 2004, the Financial Accounting Standards
        Board ("FASB") issued an exposure draft, "Share-Based Payment, an
        amendment of FASB Statements No. 123 and 95." This exposure draft would
        require stock-based compensation to employees to be recognized as a cost
        in the financial statements and that such cost be measured according to
        the fair value of the stock options. In the absence of an observable
        market price for the stock awards, the fair value of the stock options
        would be based upon a valuation methodology that takes into
        consideration various factors, including the exercise price of the
        option, the expected term of the option, the current price of the
        underlying share, the expected volatility of the underlying share price,
        the expected dividends on the underlying share and the risk-free
        interest rate. The proposed requirements in the exposure draft would be
        effective for the first fiscal year beginning after December 15, 2004.
        The FASB intends to issue a final Statement during the fourth quarter of
        2004. The Company will continue to monitor communications on this
        subject from the FASB in order to determine the impact on the Company's
        consolidated financial statements.

  3.    INVENTORIES

        Inventories are valued at the lower of cost (principally first-in /
        first-out) or market value. The Company records reductions to the cost
        of inventories based upon its forecasted plans to sell, historical scrap
        and disposal rates and physical condition of the inventories. The
        components of inventories were as follows:

                                       June  30         December 31
                                         2004               2003
                                         ----               ----

             Raw Materials             $ 58,107           $40,586
             Work in Process              5,201             4,856
             Finished Goods              38,662            47,076
                                       --------           -------
                                       $101,970           $92,518
                                       ========           =======




                                      -7-
<PAGE>



  4.    INTANGIBLES

        Intangibles arising from acquisitions were as follows:

                                                        JUNE 30, 2004
                                              GROSS
                                             CARRYING    ACCUMULATED   NET BOOK
                                               VALUE    AMORTIZATION     VALUE
                                               -----    ------------     -----

        Intellectual property rights          $10,558      $ 3,270      $ 7,288
        Trademarks and other                    3,060        2,927          133
                                              -------      -------      -------
                                              $13,618      $ 6,197      $ 7,421
                                              =======      =======      =======

                                                      DECEMBER 31, 2003
                                              GROSS
                                             CARRYING    ACCUMULATED   NET BOOK
                                               VALUE    AMORTIZATION     VALUE
                                               -----    ------------     -----

        Intellectual property rights          $10,558      $ 3,006      $ 7,552
        Trademarks and other                    3,060        2,851          209
                                              -------      -------      -------
                                              $13,618      $ 5,857      $ 7,761
                                              =======      =======      =======

         Amortization expense was $170 and $169 for the three months ended June
         30, 2004 and 2003, respectively, and amounted to $340 and $339 for the
         six months ended June 30, 2004 and 2003, respectively. The estimated
         amortization expense for the fiscal years ending December 31, 2004,
         2005, 2006, 2007 and 2008, is $681, $531, $531, $531 and $531,
         respectively. The useful lives for intellectual property rights,
         trademarks and other are 20 years.


  5.     NOTE PAYABLE

         On April 29, 2004, the Company entered into a $5,000 Line of Credit
         agreement with a bank. The line of credit has certain cross default and
         merger provisions, expires on October 29, 2004, and does not include
         any financial covenants. The line of credit was fully drawn on May 26,
         2004 with monthly interest payable at an annual rate of 2.4% and with a
         maturity date of September 29, 2004.


  6.     LONG - TERM DEBT

         Long - term debt consisted of the following:
                                                             June 30 December 31
                                                              2004       2003
                                                              ----       ----

         Senior notes                                        $24,000     $24,000
         Notes payable under revolving credit agreement       37,000      34,000
         Mortgages on land and buildings                      13,462      13,694
         Obligations under capital leases                        384         439
                                                             -------     -------
                                                             $74,846     $72,133
         Less current portion                                    491       8,760
                                                             -------     -------
                                                             $74,355     $63,373
                                                             =======     =======

         On May 18, 2004, the mortgage covering the property in North Carolina
         was amended. The maturity of the mortgage was extended from March 15,
         2010 to March 18, 2011 and the interest rate was fixed at 6.39%.

         On April 13, 2004, the senior notes were amended and restated. The
         maturity of the notes was extended to April 15, 2011 with annual
         principal payments of $6,000 required on April 15, 2008, April 15,
         2009, April 15, 2010 and April 15, 2011. The interest rate was reduced
         from 9.5% to 5.56% payable semi-annually on October 15 and April 15 of
         each year. The amended agreement is unsecured and includes covenants
         which provide, among other things, for the maintenance of certain
         financial ratios.



                                      -8-
<PAGE>





         On April 13, 2004, the revolving credit agreement was amended and
         restated. The amended facility provides credit of $45,000, and extends
         the expiration to April 13, 2009. Under the terms of the agreement,
         interest rates on borrowings are based on LIBOR or prime rates at the
         Company's option. The terms of the agreement include a commitment fee
         based on unutilized amounts and an annual agency fee. The deferred
         financing fees associated with the April 13, 2004 amendment and
         unamortized deferred financing fees associated with the March 2002 and
         February 2000 amendments are being amortized over the term of the new
         agreement. Covenants provide, among other things, for the maintenance
         of certain financial ratios. The agreement is unsecured and no
         compensating balances are required.

         On April 1, 2004, the lender under the mortgage covering the property
         in Barrie, Ontario agreed to extend the maturity of the mortgage from
         March 1, 2005 to April 1, 2009 and to reduce the interest rate from
         8.38% to 6.37%.



  7.     EMPLOYEE PENSION PLANS

         The Company maintains two non-contributory defined benefit pension
         plans covering all U.S. eligible employees. The Del Non-Union Plan
         formula is based on years of service and the employee's compensation
         during the five years before retirement. The Del LaCross Union Plan
         formula is based on years of service. The LaCross Plan covers former
         employees of the Company's Newark, New Jersey facility which ceased
         operations during 2002. As a result of this closure, more than 20% of
         plan participants in the LaCross Plan were terminated, which resulted
         in a partial termination of the plan. Due to the partial termination of
         the plan, all affected participants became fully vested in their
         accrued benefits at their termination date. Assets held by these plans
         consist of cash and cash equivalents, fixed income securities
         consisting of U.S. government and corporate bonds and common stocks.
         The Company also has a defined benefit supplemental executive
         retirement plan (SERP) for certain of its executives. The SERP is a
         non-qualified plan under the Internal Revenue Code. The assets in the
         SERP trust are considered assets of the Company, not plan assets, and
         as such, are included in other assets on the accompanying consolidated
         balance sheets. The assets of the SERP, which consist of cash and cash
         equivalents, are held-to-maturity securities and, as such, are carried
         at cost plus accrued interest.

         COMPONENTS OF NET PERIOD BENEFIT COST

         The components of net periodic benefit costs for the Company's domestic
         plans are set forth in the following tables:


                                                    Three Months Ended
                                                      June 30, 2004
                                          --------------------------------------
                                           DEL NON-      DEL LACROSS
                                          UNION PLAN        PLAN        SERP
                                          ----------        ----        ----

        Service Cost                        $   770       $  --         $    13
        Interest Cost                           578            19           106
        Expected return on plan assets         (516)          (18)         --
        Recognized prior service cost            13          --              37
        Recognized net (gain) loss              191             4            (3)
                                            -------       -------       -------
        Net periodic cost                   $ 1,036       $     5       $   153
                                            =======       =======       =======




                                      -9-
<PAGE>




                                                        Six Months Ended
                                                         June 30, 2004
                                                --------------------------------
                                                 DEL NON-   DEL LACROSS
                                                UNION PLAN      PLAN    SERP
                                                ----------      ----    ----

         Service Cost                             $ 1,540    $  --      $    26
         Interest Cost                              1,156         38        212
         Expected return on plan assets            (1,032)       (36)      --
         Recognized prior service cost                 26       --           74
         Recognized net (gain) loss                   382          8         (6)
                                                  -------    -------    -------

         Net periodic cost                        $ 2,072    $    10    $   306
                                                  =======    =======    =======





                                                        Three Months Ended
                                                         June 30, 2003
                                                --------------------------------
                                                 DEL NON-   DEL LACROSS
                                                UNION PLAN      PLAN    SERP
                                                ----------      ----    ----


         Service Cost                             $   648    $  --      $    13
         Interest Cost                                514         21        103
         Expected return on plan assets              (394)       (26)      --
         Amortization of unrecognized
           transition asset                          --         --         --
         Recognized prior service cost                 12       --           69
         Recognized net (gain) loss                   182          3        (22)
                                                  -------    -------    -------

         Net periodic cost                        $   962    $    (2)   $   163
                                                  =======    =======    =======





                                                        Six Months Ended
                                                         June 30, 2003
                                                --------------------------------
                                                 DEL NON-   DEL LACROSS
                                                UNION PLAN      PLAN    SERP
                                                ----------      ----    ----


         Service Cost                             $ 1,296    $  --      $    26
         Interest Cost                              1,028         42        206
         Expected return on plan assets              (788)       (52)      --
         Amortization of unrecognized
           transition asset                            (1)      --         --
         Recognized prior service cost                 25       --          138
         Recognized net (gain) loss                   364          6        (44)
                                                  -------    -------    -------

         Net periodic cost                        $ 1,924    $    (4)   $   326
                                                  =======    =======    =======








                                      -10-
<PAGE>








         CONTRIBUTIONS

         The Company previously disclosed in its financial statements for the
         year ended December 31, 2003, that it expects to contribute in 2004
         approximately $5,215 and $808, to its Non-Union Plan and SERP
         respectively, and did not anticipate that a contribution would be made
         to the LaCross Plan. As of June 30, 2004, $1,948 and $8 of
         contributions have been made to the Non-Union Plan and SERP,
         respectively, and no contributions have been made to the LaCross Plan.
         The Company presently anticipates contributing an additional $2,329 to
         fund its Non-Union Plan for a total of $4,277, contributing an
         additional $7 to fund its SERP for a total of $15 and making no
         additional contributions to the LaCross Plan. The decrease in the
         expected contribution to the Non-Union Plan for 2004 is due to a
         change, in April 2004, in the minimum funding requirement rules for
         2004. The significant decrease in the expected contribution to the SERP
         is due to the fact that participants over 65 who were assumed to be
         retiring during the first quarter of 2004 did not retire.


  8.     SALE OF LAND

         On February 13, 2002, the Company sold 13.5 acres of vacant land in
         Farmingdale, New York to an unrelated third party for gross proceeds of
         $3,335, which was reduced by $160 for closing costs. In addition, $235
         of the sales price was paid by the purchaser on February 13, 2003, in
         accordance with the original terms of the transaction. In connection
         with this sale, an option was granted to the buyer for the remaining
         8.5 acres of improved land and buildings owned by the Company which was
         exercised by the buyer on June 30, 2004. The improved land and
         buildings were sold for gross proceeds of $5,000, which was reduced by
         $320 for closing costs and increased by $136 for other closing
         adjustments, resulting in net proceeds of $4,816. The improved land and
         buildings had a book value at June 30, 2004 of $4,513. After closing
         costs of $320 and other transaction related expenses of $208, the sale
         resulted in a loss of $41 ($25 after-tax).


9.       CLOSURE OF FARMINGDALE PLANT

         On May 30, 2003, the Company announced the formal plan for the transfer
         of its principal manufacturing operations, for both the Cosmetic and
         Pharmaceutical segments, to Rocky Point, North Carolina from
         Farmingdale, New York. Pursuant to the Company's formal severance
         policy for non-union employees and, severance benefits due under the
         union contract resulting from the plant closure, a charge of $1,850 for
         severance costs and related benefits for approximately 360 union and
         non-union employees associated with this move was recorded during the
         six months ended June 30, 2003. Additional severance benefits earned by
         employees being terminated will be recognized as a charge in the
         financial statements as such severance benefits are earned. During the
         first quarter of 2004, a provision of $56 was recorded for such earned
         severance benefits, net of adjustments of $66 to the initial accrual,
         which resulted in a net recovery of $10. During the second quarter of
         2004, a provision of $18 was recorded for such earned severance
         benefits, net of adjustments of $5 to the initial accrual, which
         resulted in a net provision of $13. During 2004 and 2003, $90 and $127,
         respectively, of relocation and other move related costs were expensed
         as incurred. The Company estimates that a total of approximately $13
         (Cosmetic segment - $8.5; Pharmaceutical segment - $4.5), will be
         incurred for additional severance, relocation and other move related
         costs during the second half of 2004. As of June 30, 2004, 356 union
         and non-union employees have been terminated and $1,625 in severance
         benefits was paid.

         A summary of the activity in the accrual for the plant closure was as
         follows:


                  Balance December 31, 2003                          $ 1,714

                          Provision                                       74
                          Payments                                   (1,306)
                          Adjustments                                   (71)
                                                                     ------

                  Balance June 30, 2004                              $   411
                                                                     =======



                                      -11-
<PAGE>


  10.    EARNINGS PER SHARE

         Basic earnings per share is computed by dividing income available to
         common shareholders (which for the Company equals its recorded net
         earnings) by the weighted-average number of common shares outstanding
         during the period. Diluted earnings per share reflects the potential
         dilution that could occur if securities or other contracts to issue
         common stock, such as stock options, were exercised, converted into
         common stock or otherwise resulted in the issuance of common stock.

         On November 20, 2003, the Company's Board of Directors approved a 5%
         stock dividend. As a result, 462,998 shares of treasury stock were
         issued on December 29, 2003 to shareholders of record on December 1,
         2003. Accordingly, the weighted-average common shares outstanding in
         the consolidated statement of earnings for the three and six months
         ended June 30, 2003, have been adjusted to reflect the dividend.

         A reconciliation between the numerators and denominators of the basic
         and diluted earnings per common share were as follows:
<TABLE>
<CAPTION>

                                                             Three Months Ended   Six Months Ended
                                                                   June 30            June 30
                                                                   -------            -------

                                                               2004      2003      2004      2003
                                                               ----      ----      ----      ----

<S>                                                          <C>       <C>       <C>       <C>
        Net earnings (numerator)                             $ 3,757   $ 4,940   $ 4,437   $ 9,265
                                                             -------   -------   -------   -------

        Weighted-average common shares
             (denominator for basic earnings per share)        9,735     9,604     9,726     9,596

        Effect of dilutive securities:
             Employee stock options                              626       452       646       396
                                                             -------   -------   -------   -------

        Weighted-average common and potential
             common shares outstanding
              (denominator for diluted earnings per share)    10,361    10,056    10,372     9,992
                                                             =======   =======   =======   =======

        Basic earnings per share                             $  0.39   $  0.51   $  0.46   $  0.97
                                                             =======   =======   =======   =======

        Diluted earnings per share                           $  0.36   $  0.49   $  0.43   $  0.93
                                                             =======   =======   =======   =======
</TABLE>


          Employee stock options of approximately 505,000 shares for the three
          months ended June 30, 2003, and 727,000 shares for the six months
          ended June 30, 2003 were not included in the net earnings per share
          calculation because their effect would have been anti-dilutive. There
          were no anti-dilutive shares for the three and six months ended June
          30, 2004.

          As a result of stock options exercised during the first half of 2004,
          the corresponding tax benefit of $444 was recorded as a reduction to
          income taxes payable and as an increase in additional paid-in capital.


  11.     COMPREHENSIVE INCOME

          The components of comprehensive income for the three and six months
ended June 30, 2004 and 2003 were as follows:
<TABLE>
<CAPTION>

                                             Three Months Ended    Six Months Ended
                                                  June 30               June 30
                                                  -------               -------
                                               2004       2003      2004       2003
                                               ----       ----      ----       ----

<S>                                          <C>        <C>       <C>        <C>
         Net earnings                        $ 3,757    $ 4,940   $ 4,437    $ 9,265

         Foreign currency translation
           gain / (loss)                         (64)     1,047      (229)     1,836
                                             -------    -------   -------    -------

         Total comprehensive income          $ 3,693    $ 5,987   $ 4,208    $11,101
                                             =======    =======   =======    =======
</TABLE>



                                      -12-
<PAGE>







  12.    SEGMENT INFORMATION

         The Company operates in two segments, Cosmetic and Pharmaceutical, that
         have been organized by the products and services they offer. The
         Cosmetic segment's principal products are nail care, nail color, color
         cosmetics, beauty implements, bleaches and depilatories, personal care
         products and other related cosmetic items. The Pharmaceutical segment's
         principal products are proprietary oral analgesics, baby care products
         and first aid products. The accounting policies of the segments are the
         same as those described in the summary of significant accounting
         policies. The Company evaluates the performance of its operating
         segments based on operating income. Certain assets, including property,
         plant and equipment and deferred tax assets, are not allocated to the
         identifiable segments; depreciation of unallocated assets is charged to
         the Cosmetic segment.
<TABLE>
<CAPTION>

                                          Three Months Ended        Six Months Ended
                                               June 30                   June 30
                                               -------                   -------
                                          2004         2003         2004        2003
                                          ----         ----         ----        ----
      Net sales:
<S>                                    <C>          <C>          <C>          <C>
            Cosmetic                   $  82,078    $  78,576    $ 147,316    $ 154,834
            Pharmaceutical                20,870       19,400       38,697       36,505
                                       ---------    ---------    ---------    ---------
            Consolidated               $ 102,948    $  97,976    $ 186,013    $ 191,339
                                       =========    =========    =========    =========

      Operating income:
            Cosmetic                   $   3,398    $   5,430    $   3,740    $  11,759
            Pharmaceutical                 3,902        3,371        5,740        5,098
                                       ---------    ---------    ---------    ---------
            Consolidated               $   7,300    $   8,801    $   9,480    $  16,857

      Other income (expense):
            Loss on sale of
              building and land        $     (41)   $    --      $     (41)   $    --
            Interest expense, net      $    (784)   $  (1,009)   $  (1,749)   $  (2,054)
            Other income (expense),
               net                     $    (356)   $     107    $    (464)   $      27
                                       ---------    ---------    ---------    ---------

      Earnings before income taxes     $   6,119    $   7,899    $   7,226    $  14,830
                                       =========    =========    =========    =========

      Depreciation and amortization:
            Cosmetic                   $   2,133    $   2,112    $   4,173    $   3,839
            Pharmaceutical                     3           99            6          187
                                       ---------    ---------    ---------    ---------
            Consolidated               $   2,136    $   2,211    $   4,179    $   4,026
                                       =========    =========    =========    =========
</TABLE>


         For the three months ended June 30, 2004, severance expense of $13 was
         included in the operating income of the segments, as follows: Cosmetic
         - $8.5 and Pharmaceutical - $4.5. For the six months ended June 30,
         2004, severance expense of $3 was included in the operating income of
         the segments, as follows: Cosmetic - $2 and Pharmaceutical - $1. For
         2003, severance expense of $1,850 was included in the operating income
         of the segments, as follows: Cosmetic - $1,203 and Pharmaceutical -
         $647.

         Operating income for 2003 includes an estimated recovery of $511
         related to a 2001 charge for the K-Mart Chapter XI bankruptcy filing.
         Of this amount, $431 was attributable to the Cosmetic segment and $80
         was attributable to the Pharmaceutical segment.




                                      -13-
<PAGE>



  13.    COMMITMENTS AND CONTINGENCIES

        In September 2001, the Company received notice from the Environmental
        Protection Agency ("EPA") that it was, along with 81 others, a
        Potentially Responsible Party regarding a Superfund Site ("the Site")
        located in Glen Cove, New York. According to the notice received from
        the EPA, the Company's involvement related to empty drums coming to the
        Site in 1977 and 1978. In the third quarter of 2001, the Company
        recorded an estimate of $550 in selling and administrative expenses
        based on information received from the EPA as to its potential liability
        for the past remediation activities. In October 2001, the Company became
        a member of a Joint Defense Group ("the JDG"). In the second quarter of
        2002, the EPA and the JDG agreed in principle to the amounts of payments
        required to settle past and future liabilities under the Comprehensive
        Environmental Response, Compensation and Liability Act ("CERCLA") with
        regard to the Site. Pursuant to an agreement among JDG members as to how
        to allocate such payment amounts, the Company recorded, in the second
        quarter of 2002, an additional estimate of $785 in selling and
        administrative expenses. During the third quarter of 2002, a trust was
        established with the intention of entering into a Consent Decree with
        the United States and the State of New York to settle all claims by the
        United States and the State of New York for past and future response
        costs and future actions at the Site. In September 2002, the Company
        paid $1,332 into a trust account which was held in escrow, together with
        payments by the other members of the JDG, for the eventual settlement
        with the EPA of the Company's potential liability under CERCLA. During
        the third quarter of 2002, the Company also paid into the same trust
        account $18 for the eventual settlement of the Company's potential
        liability for natural resource damages ("NRD") claims, which were also
        expected to be settled in the Consent Decree. During the second quarter
        of 2003, the United States, the State of New York and Federal District
        Court approved the aforementioned Consent Decree.



  14.   SUBSEQUENT EVENT

        On July 2, 2004, the Company announced it signed a definitive merger
        agreement to be acquired by DLI Holding Corp. in a cash transaction.
        Subsequent to the merger, DLI Holding Corp. will be owned by affiliates
        of Kelso & Company along with certain members of the Company's current
        management. An affiliate of Church & Dwight Co., Inc. will own
        non-voting preferred stock. Under the merger agreement, each outstanding
        share of Del Laboratories, Inc. common stock will be converted into the
        right to receive $35 per share in cash, without interest. Following the
        close of the transaction, which is expected to occur in the fourth
        quarter of 2004, Del Laboratories, Inc. will become a wholly owned
        subsidiary of DLI Holding Corp. and will cease to be a publicly traded
        company. Financing commitments for the acquisition have been received by
        Kelso & Company. Consummation of the transaction is subject to
        satisfaction of certain conditions, including approval by the Company's
        shareholders, receipt of the necessary financing proceeds, and
        expiration or termination of the waiting period under the
        Hart-Scott-Rodino Act. Merger related expenses of $216 related to legal
        and advisory fees were incurred in the second quarter of 2004. In July
        2004, the Company incurred a fairness opinion fee in connection with the
        transaction in the amount of $1,000 which will be reflected in the third
        quarter financial statements.




                                      -14-
<PAGE>




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

          OVERVIEW


         On July 2, 2004, the Company announced it signed a definitive merger
         agreement to be acquired by DLI Holding Corp. in a cash transaction.
         Subsequent to the merger, DLI Holding Corp. will be owned by affiliates
         of Kelso & Company along with certain members of the Company's current
         management. An affiliate of Church & Dwight Co., Inc. will own
         non-voting preferred stock. Under the merger agreement, each
         outstanding share of Del Laboratories, Inc. common stock will be
         converted into the right to receive $35 per share in cash, without
         interest. Following the close of the transaction, which is expected to
         occur in the fourth quarter of 2004, Del Laboratories, Inc. will become
         a wholly owned subsidiary of DLI Holding Corp. and will cease to be a
         publicly traded company. Financing commitments for the acquisition have
         been received by Kelso & Company. Consummation of the transaction is
         subject to satisfaction of certain conditions, including approval by
         the Company's shareholders, receipt of the necessary financing
         proceeds, and expiration or termination of the waiting period under the
         Hart-Scott-Rodino Act. Merger related expenses of $216 thousand related
         to legal and advisory fees were incurred in the second quarter of 2004.
         In July 2004, the Company incurred a fairness opinion fee in connection
         with the transaction in the amount of $1.0 million which will be
         reflected in the third quarter financial statements.


         Del Laboratories, Inc. is a fully integrated marketing and
         manufacturing company operating in two major segments of the packaged
         consumer products business: cosmetics and over-the-counter
         pharmaceuticals. Each of the Company's marketing divisions is
         responsible for branded lines fitting into one of these general
         categories and develops its own plans and goals consistent with its
         operating environment and the Company's corporate objectives.


         The Company owns a portfolio of highly recognized branded products
         which are competitively priced. As reported by ACNielsen, many of the
         Company's brands have leading market positions in their product
         categories. In our cosmetics segment, the Sally Hansen brand is the
         number one brand in the mass market nail care category with market
         leadership positions in nail color, nail treatment, and bleaches and
         depilatories. The Sally Hansen LaCross brand is the leader in nail and
         beauty implements providing a line of high quality beauty implements
         including nail clippers, files, scissors, tweezers and eyelash curlers.
         N.Y.C. New York Color is one of the most successful new cosmetics
         brands in the mass market. This highly recognizable brand of value
         cosmetics offers a complete collection of high quality products at
         opening price points. In our over-the-counter pharmaceutical segment,
         the Orajel brand is the leading oral analgesic in the mass market
         channels, as reported by Information Resources, Inc. The Orajel family
         of products has been developed with unique formulations specifically
         targeted at distinct oral pain and baby care indications. Our Dermarest
         brand is a complete line of non-prescription products for relief of
         psoriasis and eczema and is the market share leader in the
         psoriasis/eczema treatment category.


         The Company believes it has strong customer relationships with a
         diversified group of prominent retailers across multiple distribution
         channels including mass merchandisers, drug chains, drug wholesalers
         and food retailers and wholesalers. The Company has a strong track
         record of developing innovative new products and successful brand
         extensions. An in-house research and development department focuses on
         product development, clinical and regulatory affairs and quality
         control.



                                      -15-
<PAGE>






      RESULTS OF OPERATIONS

      SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2004 VERSUS JUNE 30, 2003


      Consolidated net sales for the second quarter ended June 30, 2004 were
      $102.9 million, an increase of $4.9 million (5.1%) compared to net sales
      of $98.0 million for the second quarter of 2003. Consolidated net sales
      for the six months ended June 30, 2004 were $186.0 million versus $191.3
      million for the first six months ended June 30, 2003, a decrease of $5.3
      million or 2.8%. The decrease in sales for the six months ended June 30,
      2004 is attributable to production start-up problems in the first quarter
      of 2004 in connection with the transfer of the Company's principal
      manufacturing operations, for both the cosmetic and pharmaceutical
      segments, to Rocky Point, North Carolina from Farmingdale, New York. As
      previously reported in the Form 10-Q for the first quarter ended March 31,
      2004, the Company estimated that due to production start-up problems, net
      sales for the first quarter of 2004 were negatively impacted by
      approximately $14.1 million. Although sales for the second quarter
      increased by $4.9 million, the Company estimates that approximately $13.8
      million of additional orders were not shipped in the second quarter of
      2004 due to the continuation into the second quarter of production
      start-up problems. The company has made steady improvement in its
      production processes and anticipates that it will be back to its
      pre-relocation manufacturing efficiency levels before the end of the third
      quarter.

      The cosmetic segment of the business generated net sales for the second
      quarter ended June 30, 2004 of $82.1 million, an increase of approximately
      $3.5 million, or 4.5% compared to net sales of $78.6 million in the second
      quarter of 2003. Net sales for the six months ended June 30, 2004 were
      $147.3 million versus $154.8 million for the six months ended June 30,
      2003. The Company estimates that approximately $11.0 million of orders
      were not shipped due to the continuation into the second quarter of
      production start-up problems. The Company's core cosmetic business remains
      strong, and as reported by ACNielsen, the Sally Hansen brand remains the
      number one brand in the mass market nail care category with a 26.5% share
      of market for the quarter ended June 30, 2004.

      The over-the-counter pharmaceutical segment of the business generated net
      sales for the second quarter ended June 30, 2004 of $20.9 million, an
      increase of $1.5 million, or 7.6% compared to net sales of $19.4 million
      in the second quarter of 2003. Net sales for the six months ended June 30,
      2004 were $38.7 million versus $36.5 million for the six months ended June
      30, 2003. The Company estimates that approximately $2.8 million of orders
      were not shipped due to the continuation into the second quarter of
      production start-up problems. The over-the-counter pharmaceutical business
      continues to grow and as reported by Information Resources, Inc., Orajel,
      the core brand of the pharmaceutical segment continues its leadership
      position in the oral analgesics category with a 29.5% share of market for
      the quarter.

      Cost of goods sold for the second quarter ended June 30, 2004 was $52.4
      million, or 50.9% of net sales, compared to $47.2 million, or 48.1% of net
      sales for the quarter ended June 30, 2003. Cost of goods sold for the six
      months ended June 30, 2004 was $93.6 million or 50.3% of net sales
      compared to $92.8 million or 48.5% of net sales for the six months ended
      June 30, 2003. The unfavorable variance in cost of goods sold as a
      percentage of net sales is primarily due to higher production costs as a
      result of start-up problems which continued into the second quarter in
      connection with the transfer of manufacturing operations from Farmingdale,
      New York to Rocky Point, North Carolina.

      Selling and administrative expenses were $43.0 million, or 41.8% of net
      sales for the quarter ended June 30, 2004 compared to $40.2 million, or
      41.0% of net sales for the second quarter of 2003. Selling and
      administrative expenses for the six months ended June 30, 2004 were $82.7
      million or 44.5% of net sales compared to $79.8 or 41.7% of net sales for
      the six months ended June 30, 2003. The increase of selling and
      administrative expenses as a percentage of net sales for the second
      quarter of 2004 and for the six months ended June 30, 2004 compared to
      2003 is primarily due to increased patent and trademark litigation costs
      and increased rent expense. Additionally, a recovery of $0.5 million was
      recorded in the second quarter of 2003 of a previously recorded charge
      related to the K-Mart Chapter XI bankruptcy filing.



                                      -16-
<PAGE>








      Merger related expenses were $216 thousand in the second quarter primarily
      related to legal and advisory fees incurred in connection with the
      proposed merger.

      Net interest expense for the three months ended June 30, 2004 of $0.8
      million was approximately $0.2 million lower than the second quarter of
      2003. Interest expense for the six months ended June 30, 2004 was $1.7
      million, or $0.3 lower than the $2.0 million for the six months ended June
      30, 2003. The decrease in interest expense for the six months of 2004
      compared to the six months of 2003 is primarily due to the reduction of
      $6.7 million of average outstanding debt related to the 9.5% senior notes
      and a reduction in average borrowing rates of approximately 163 basis
      points. The decrease was partially offset by an increase in average
      outstanding borrowings of $9.5 million under the revolving credit
      agreement, an increase of $0.9 million in average outstanding borrowings
      under the bank line of credit, and an increase of $5.4 million in average
      outstanding borrowings under the mortgage on the North Carolina property.

      Income taxes for the six months ended June 30, 2004 are based on the
      Company's expected annual effective tax rate of 38.6% for 2004. The
      increase from the effective tax rate of 37.5% used for the six months
      ended June 30, 2003, is due primarily to an increase in state and local
      income taxes resulting from the reduction of available investment tax
      credits, an increase in the amount of permanent non-deductible expenses
      and the increased effect of such non-deductible expenses on taxable income
      for the period.

      Net earnings for the three months ended June 30, 2004 were $3.8 million,
      or $0.39 per basic share, compared to $4.9 million, or $0.51 per basic
      share for the second quarter of 2003. Net earnings for the six months
      ended June 30, 2004 were $4.4 million or $0.46 per basic share compared to
      $9.3 million or $0.97 per basic share for the six months ended June 30,
      2003.The decrease in net earnings for the second quarter of 2004 as
      compared to prior year is directly attributable to higher production costs
      as a result of start-up problems which continued into the second quarter
      in connection with the transfer of the Company's principal manufacturing
      operations from Farmingdale, New York to Rocky Point, North Carolina.






                                      -17-
<PAGE>




      LIQUIDITY AND CAPITAL RESOURCES

      CASH FLOW OVERVIEW

      Cash and cash equivalents of $2.0 million at June 30, 2004 was
      approximately equal to the balance at December 31, 2003. For the six
      months ended June 30, 2004, $7.0 million was used in operating activities
      and $7.5 million was provided by financing activities. Cash of $5.4
      million used for property, plant and equipment additions was partially
      offset by net proceeds of $4.8 million received from the sale of land and
      buildings.

      OPERATING ACTIVITIES

      Net cash used in operating activities for the six months ended June 30,
      2004 of $7.0 million was primarily due to increases in inventories of $9.8
      million, accounts receivable of $3.2 million and other assets of $1.7
      million, partially offset by net earnings before depreciation and
      amortization of $4.4 million, and an increase in accounts payable of $2.3
      million. The increase in inventories and accounts payable is due to the
      timing of purchases of raw materials and components to support projected
      sales levels and the inability to ship unfulfilled orders as a result of
      the start-up production problems. The increase in other assets is
      primarily related to increased inventories of displays to support
      projected product shipments.

      On May 30, 2003, the Company announced the formal plan for the transfer of
      its principal manufacturing operations, for both the Cosmetic and
      Pharmaceutical segments, to Rocky Point, North Carolina from Farmingdale,
      New York. Pursuant to the Company's formal severance policy for non-union
      employees and severance benefits due under the union contract resulting
      from the plant closure, a charge of $2.0 million for severance costs and
      related benefits for approximately 360 union and non-union employees
      associated with this move was recorded in 2003. Additional severance
      benefits earned by employees being terminated will be recognized as a
      charge in the financial statements as such severance benefits are earned.
      As of June 30, 2004, 356 union and non-union employees have been
      terminated and $1.6 million in severance benefits were paid. It is
      anticipated that approximately $313 thousand will be paid during the last
      six months of 2004.

      INVESTING ACTIVITIES

      Net cash used in investing activities of $5.4 million was primarily for
      expenditures related to tooling, plates & dies and machinery and
      equipment. The Company estimates that capital spending related to tooling,
      plates & dies, and machinery and equipment will approximate a total of
      $9.0 million for fiscal year 2004. In addition, net proceeds of $4.8
      million were received from the sale of buildings and land.

      FINANCING ACTIVITIES

      Net cash provided by financing activities of $7.5 million was principally
      due to borrowings under a new line of credit agreement with a bank and net
      borrowings under the revolving credit facility.

      On April 13, 2004, the $24.0 million senior notes were amended and
      restated. The maturity of the notes was extended to April 15, 2011, the
      interest rate was reduced to 5.56% payable semi-annually on October 15 and
      April 15 of each year, and principal payments of $6.0 million are due
      annually on April 15, 2008 through April 15, 2011. The amended agreement
      is unsecured and includes covenants, which provide among other things, for
      the maintenance of certain financial ratios.




                                      -18-
<PAGE>









        On April 13, 2004, the $45.0 million revolving credit agreement with
        banks was amended and restated. The amended facility provides credit of
        $45.0 million, extends the expiration to April 13, 2009, eliminates all
        fixed dollar covenants, and reduces the interest rate pricing to a range
        of 75 - 125 basis points over LIBOR depending on certain financial
        ratios. The Company has the option to borrow at prime rates or LIBOR.
        Covenants provide, among other things, for the maintenance of certain
        financial ratios. The agreement is unsecured and no compensating
        balances are required.

        On April 1, 2004, the lender under the mortgage covering the property in
        Barrie, Ontario agreed to extend the maturity of the mortgage from March
        1, 2005 to April 1, 2009 and to reduce the interest rate from 8.38% to
        6.37%.

        On April 29, 2004, the Company entered into a $5,000 Line of Credit
        agreement with a bank. The line of credit has certain cross default and
        merger provisions, expires on October 29, 2004, and does not include any
        financial covenants. The line of credit was fully drawn on May 26, 2004
        with monthly interest payable at an annual rate of 2.4% and with a
        maturity date of September 29, 2004.

        On May 18, 2004, the mortgage covering the property in North Carolina
        was amended. The maturity of the mortgage was extended from March 15,
        2010 to March 18, 2011 and the interest rate was fixed at 6.39%.

        The Company does not use any off-balance sheet financing arrangements.


        DISCLOSURES ABOUT CONTRACTUAL OBLIGATIONS

        In order to aggregate all contractual obligations as of June 30, 2004,
        the Company has included the following table:
<TABLE>
<CAPTION>

                                                        PAYMENTS DUE BY PERIOD
                                                        ----------------------
                                                           (In thousands)

                                                  LESS      1 - 2     2 - 3      3 - 5      AFTER 5
                                      TOTAL      1 YEAR     YEARS     YEARS      YEARS       YEARS
                                      -----      ------     -----     -----      -----       -----

<S>                                 <C>        <C>        <C>        <C>        <C>        <C>
Long-term debt                      $ 37,462   $    375   $    400   $    426   $ 13,845   $ 22,416
Revolving credit agreement            37,000       --         --         --       37,000       --
Note payable to bank                   5,000      5,000       --         --         --         --
Capital leases                           384        116        124        133         11       --
Operating leases                      32,033      3,770      3,344      2,966      5,552     16,401
                                    --------   --------   --------   --------   --------   --------

Total contractual obligations (a)   $111,879   $  9,261   $  3,868   $  3,525   $ 56,408   $ 38,817
                                    ========   ========   ========   ========   ========   ========
</TABLE>

         (a) The Company expects to contribute approximately $4.3 million in
         fiscal year 2004 to fund its pension plans. These expected pension
         contributions are not included in the above table.


        FUTURE CAPITAL REQUIREMENTS

        The Company's near-term cash requirements are primarily related to the
        funding of operations, capital expenditures and interest obligations on
        outstanding debt. The Company believes that cash flows from operating
        activities, cash on hand and amounts available from the credit facility
        will be sufficient to enable the Company to meet its anticipated cash
        requirements for 2004. However, there can be no assurance that the
        combination of cash flow from future operations, cash on hand and
        amounts available from the credit facility will be sufficient to meet
        the Company's cash requirements. Additionally, in the event of a
        decrease in demand for its products or reduced sales, such developments,
        if significant, would reduce the Company's cash flow from operations and
        could adversely affect the Company's ability to achieve certain
        financial covenants under the senior note and revolving credit
        agreements. If the Company is unable to satisfy such financial
        covenants, the Company could be required to adopt one or more
        alternatives, such as reducing or delaying certain operating
        expenditures and/or delaying capital expenditures.



                                      -19-
<PAGE>



        DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The Company makes estimates and assumptions in the preparation of its
        financial statements in conformity with accounting principles generally
        accepted in the United States of America. Actual results could differ
        significantly from those estimates under different assumptions and
        conditions. The Company believes that the following discussion addresses
        the Company's most critical accounting policies, which are those that
        are most important to the portrayal of the Company's financial condition
        and results of operations and which require management's most difficult
        and subjective judgments, often as a result of the need to make
        estimates about the effect of matters that are inherently uncertain.


        REVENUE RECOGNITION

        The Company sells its products to chain drug stores, mass volume
        retailers, supermarkets, wholesalers and overseas distributors. Sales of
        such products are denominated in U.S. dollars and sales in Canada are
        denominated in Canadian dollars. The Company's accounts receivable
        reflect the granting of credit to these customers. The Company generally
        grants credit based upon analysis of the customer's financial position
        and previously established buying and selling patterns. The Company does
        not bill customers for shipping and handling costs and, accordingly,
        classifies such costs as selling and administrative expense. Revenues
        are recognized and discounts are recorded when merchandise is shipped.
        Net sales are comprised of gross revenues less returns, various
        promotional allowances and trade discounts and allowances. The Company
        allows customers to return their unsold products when they meet certain
        criteria as outlined in the Company's sales policies. The Company
        regularly reviews and revises, as deemed necessary, its estimates of
        reserves for future sales returns based primarily upon actual return
        rates by product and planned product discontinuances. The Company
        records estimated reserves for future sales returns as a reduction of
        sales, cost of sales and accounts receivable. Returned products which
        are recorded as inventories are valued based on estimated realizable
        value. The physical condition and marketability of the returned products
        are the major factors considered by the Company in estimating realizable
        value. Actual returns, as well as estimated realizable values of
        returned products, may differ significantly, either favorably or
        unfavorably, from estimates if factors such as economic conditions,
        customer inventory levels or competitive conditions differ from
        expectations.


        PROMOTIONAL ALLOWANCES AND CO-OPERATIVE ADVERTISING

        The Company has various performance-based arrangements with retailers to
        reimburse them for all or a portion of their promotional activities
        related to the Company's products. These sales incentives offered
        voluntarily by the Company to customers, without charge, that can be
        used in or that are exercisable by a customer as a result of a single
        exchange transaction, are recorded as a reduction of net sales at the
        later of the sale or the offer, and primarily allow customers to take
        deductions against amounts owed to the Company for product purchases.
        The Company also has co-operative advertising arrangements with retail
        customers to reimburse them for all or a portion of their advertising of
        the Company's products. The estimated liabilities for these co-operative
        advertising arrangements are recorded as advertising expenses as
        incurred, or in the period the related revenue is recognized, depending
        on the terms of the arrangement, and included in selling and
        administrative expenses, since the Company receives an identifiable
        benefit from retail customers for an amount equal to or less than the
        fair value of such advertising costs. These arrangements primarily allow
        retail customers to take deductions against amounts owed to the Company
        for product purchases. The Company regularly reviews and revises the
        estimated accruals for these promotional allowance and co-operative
        advertising programs. Actual costs incurred by the Company may differ
        significantly, either favorably or unfavorably, from estimates if
        factors such as the level and success of the retailers' programs or
        other conditions differ from our expectations.



                                      -20-
<PAGE>



        ACCOUNTS RECEIVABLE

        In estimating the collectibility of our trade receivables, the Company
        evaluates specific accounts when it becomes aware of information
        indicating that a customer may not be able to meet its financial
        obligations due to a deterioration of its financial condition, lower
        credit ratings or bankruptcy. The Company also reviews the related aging
        of past due receivables in assessing the realization of these
        receivables. The allowance for doubtful accounts is determined based on
        the best information available to us on specific accounts and is also
        developed by using percentages applied to certain receivables.


        INVENTORIES

        Inventories are stated at the lower of cost or market value. Cost is
        principally determined by the first-in, first-out method. The Company
        records a reduction to the cost of inventories based upon its forecasted
        plans to sell, historical scrap and disposal rates and the physical
        condition of the inventories. These reductions are estimates, which
        could vary significantly, either favorably or unfavorably, from actual
        requirements if future economic conditions, the timing of new product
        introductions, customer inventory levels, fashion-oriented color
        cosmetic trends or competitive conditions differ from our expectations.


        PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

        Property, plant and equipment is recorded at cost and is depreciated on
        a straight-line basis over the estimated useful lives of such assets.
        Leasehold improvements are amortized on a straight-line basis over the
        lesser of the estimated useful lives or the lease term. Changes in
        circumstances, such as technological advances, changes to the Company's
        business model or changes in the Company's capital strategy could result
        in the actual useful lives differing from the Company's estimates. In
        those cases where the Company determines that the useful life of
        property, plant and equipment should be shortened, the Company would
        depreciate the net book value in excess of the salvage value, over its
        revised remaining useful life, thereby increasing depreciation expense.
        Factors such as changes in the planned use of equipment, fixtures,
        software or planned closing of facilities could result in shortened
        useful lives.

        Intangible assets with determinable lives and other long-lived assets,
        other than goodwill, are reviewed by the Company for impairment whenever
        events or changes in circumstances indicate that the carrying amount of
        any such asset may not be recoverable. Recoverability of assets to be
        held and used is measured by comparison of the carrying amount of an
        asset to the future net cash flows expected to be generated by the
        asset. If the sum of the undiscounted cash flows (excluding interest) is
        less than the carrying value, the Company recognizes an impairment loss,
        measured as the amount by which the carrying value exceeds the fair
        value of the asset. The estimate of cash flow is based upon, among other
        things, certain assumptions about expected future operating performance.
        The Company's estimates of undiscounted cash flow may differ from actual
        cash flow due to, among other things, technological changes, economic
        conditions, changes to its business model or changes in its operating
        performance.

        Goodwill must be tested annually for impairment at the reporting unit
        level. The Company's reporting units are its Cosmetic and Pharmaceutical
        segments. If an indication of impairment exists, the Company is required
        to determine if such reporting unit's implied fair value is less than
        its carrying value in order to determine the amount, if any, of the
        impairment loss required to be recorded. The annual testing performed as
        of January 1, 2004, indicated that there was no impairment to goodwill.

        The remaining useful lives of intangible assets subject to amortization
        are evaluated each reporting period to determine whether events and
        circumstances warrant a revision to the remaining period of
        amortization. If the estimate of an intangible asset's remaining useful
        life is changed, the remaining carrying amount of the intangible asset
        should be amortized prospectively over that revised remaining useful
        life.


                                      -21-
<PAGE>




        PENSION BENEFITS


        The Company sponsors pension and other retirement plans in various forms
        covering all eligible employees. Several statistical and other factors
        which attempt to anticipate future events are used in calculating the
        expense and liability related to the plans. These factors include
        assumptions about the discount rate, expected return on plan assets and
        rate of future compensation increases as determined by the Company,
        within certain guidelines and in conjunction with its actuarial
        consultants. In addition, the actuarial valuation incorporates
        subjective factors such as withdrawal and mortality rates to estimate
        the expense and liability related to these plans. The actuarial
        assumptions used by the Company may differ significantly, either
        favorably or unfavorably, from actual results due to changing market and
        economic conditions, higher or lower withdrawal rates or longer or
        shorter life spans of participants.


        NEW ACCOUNTING PRONOUNCEMENTS

        In January 2003, the FASB issued Interpretation No. 46 "Consolidation of
        Variable Interest Entities" ("FIN No. 46"). FIN No. 46 was subject to
        significant interpretation by the FASB, and was revised and reissued in
        December 2003 ("FIN No. 46R"). FIN No. 46R states that if an entity has
        a controlling financial interest in a variable interest entity, the
        assets, the liabilities and results of activities of the variable
        interest entity should be included in the consolidated financial
        statements of the entity. The provisions of FIN No. 46 and FIN No. 46R
        are applicable for all entities that are considered special purpose
        entities ("SPE") by the end of the first reporting period ending after
        December 15, 2003. The provisions of FIN No. 46R are applicable to all
        other types of variable interest entities for reporting periods ending
        after March 15, 2004. The adoption of FIN No. 46 and FIN No. 46R did not
        have a material impact on the Company's consolidated financial
        statements.

        During the first quarter of 2004, the Financial Accounting Standards
        Board ("FASB") issued an exposure draft, "Share-Based Payment, an
        amendment of FASB Statements No. 123 and 95." This exposure draft would
        require stock-based compensation to employees to be recognized as a cost
        in the financial statements and that such cost be measured according to
        the fair value of the stock options. In the absence of an observable
        market price for the stock awards, the fair value of the stock options
        would be based upon a valuation methodology that takes into
        consideration various factors, including the exercise price of the
        option, the expected term of the option, the current price of the
        underlying share, the expected volatility of the underlying share price,
        the expected dividends on the underlying share and the risk-free
        interest rate. The proposed requirements in the exposure draft would be
        effective for the first fiscal year beginning after December 15, 2004.
        The FASB intends to issue a final Statement during the fourth quarter of
        2004. The Company will continue to monitor communications on this
        subject from the FASB in order to determine the impact on the Company's
        consolidated financial statements.




                                      -22-
<PAGE>


        FORWARD - LOOKING STATEMENTS

        Management's Discussion and Analysis of the Results of Operations and
        Financial Condition and other sections of this Form 10-Q include
        "forward-looking statements" within the meaning of Section 27A of the
        Securities Act of 1933 and Section 21E of the Securities and Exchange
        Act of 1934 (the "Exchange Act"). All statements other than statements
        of historical information provided herein are forward-looking statements
        and may contain information about financial results, economic
        conditions, trends, certain risks, uncertainties and other factors that
        could cause actual results to differ materially from any future results
        implied by such forward-looking statements. Factors that might cause
        such a difference include, but are not limited to: delays in introducing
        new products or failure of consumers to accept new products; actions by
        competitors, which may result in mergers, technology improvement or new
        product introductions; the dependence on certain national chain drug
        stores, food stores and mass merchandiser relationships due to the
        concentration of sales generated by such chains; changes in
        fashion-oriented color cosmetic trends; the effect on sales of lower
        retailer inventory targets; the effect on sales of political and/or
        economic conditions; the Company's estimates of costs and benefits, cash
        flow from operations and capital expenditures; interest rate or foreign
        exchange rate changes affecting the Company and its market sensitive
        financial instruments including the Company's qualitative and
        quantitative estimates as to market risk sensitive instruments; changes
        in product mix to products which are less profitable; shipment delays;
        depletion of inventory and increased production costs resulting from
        disruptions of operations at any of our manufacturing or distribution
        facilities; foreign currency fluctuations affecting our results of
        operations and the value of our foreign assets and liabilities; the
        relative prices at which we sell our products and our foreign
        competitors sell their products in the same market; our operating and
        manufacturing costs outside of the United States; changes in the laws,
        regulations and policies, including changes in accounting standards,
        that effect, or will effect, us in the United States and/or abroad;
        trends in the general economy; and Del's failure to consummate the
        merger with DLI Holding Corp. Although the Company believes that the
        expectations reflected in such forward-looking statements are based upon
        reasonable assumptions, it can give no assurance that its expectations
        will be achieved. Without limitation, use of the following words is
        intended to identify forward-looking statements: "may," "will,"
        "should," "expect," "anticipate," "look forward to," "estimate,"
        "indications," "intend," "plan," "momentum," or "continue" or the
        negative thereof or other variations thereon.

        Readers are cautioned not to place undue reliance on these
        forward-looking statements, which reflect management's analysis,
        judgment, belief or expectation only as of the date hereof. The Company
        undertakes no obligation to publicly revise these forward-looking
        statements to reflect events or circumstances that arise after the date
        hereof. In addition to the disclosure contained herein, readers should
        carefully review any disclosure of risks and uncertainties contained in
        other documents the Company files or has filed from time to time with
        the Securities and Exchange Commission pursuant to the Exchange Act.



        Item 4.       CONTROLS AND PROCEDURES


        As of the end of the period covered by this report, the Company
        evaluated, under the supervision and with the participation of the
        Company's management, including the Company's Chief Executive Officer
        and Chief Financial Officer, the effectiveness of the design and
        operation of the Company's disclosure controls and procedures (as
        defined in Exchange Act Rule 13a - 15(e) and 15d - 15(e). Based upon
        that evaluation, the Chief Executive Officer and Chief Financial Officer
        concluded that the Company's disclosure controls and procedures were
        effective as of the end of the period covered by this quarterly report.

        The Company's management, including the Company's Chief Executive
        Officer and Chief Financial Officer, has evaluated the Company's
        internal control over financial reporting to determine whether any
        changes occurred during the quarter covered by this report that have
        materially affected, or are reasonably likely to materially affect, our
        internal control over financial reporting. Based on that evaluation,
        there has been no such change during the quarter covered by this report.




                                      -23-
<PAGE>



PART II - OTHER INFORMATION


Item 2.    CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF
           EQUITY SECURITIES

<TABLE>
<CAPTION>
                                      ISSUER PURCHASES OF EQUITY SECURITIES

                                                                     Total Number of Shares
                                                                     (or Units) Purchased
                                                                      as Part of Publicly
                   Total Number of Shares   Average Price Paid per    Announced Programs
        Period      (or Units) Purchased    Share (or Unit)

<S>                        <C>                      <C>                  <C>
        April              3,749                    $33.51                     --

        May               25,721                    $29.70                     --

        June                 373                    $30.68                     --
                   --------------           ----------------------   ----------------------

        Total             29,843(1)                 $30.19                    (2)
                   =============            ======================   =======================

</TABLE>



           (1) Represents shares tendered by employees to pay for stock options
           exercised and shares withheld from options exercised to satisfy
           income tax liabilities on gains resulting from the exercise.

           (2) The Company does not have any publicly announced share repurchase
           program.


Item 4.    SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

           At the Company's annual meeting held on May 25, 2004, the
           shareholders re-elected Charles J. Hinkaty to the Board of Directors
           in accordance with proxies solicited pursuant to Section 14 of the
           Securities Exchange Act of 1934, as amended. In addition, the
           shareholders reapproved the Company's 1999 Amended and Restated
           Annual Incentive Plan. Votes were cast for each of such items as
           follows:

           ELECTION OF DIRECTOR           VOTES FOR          VOTES WITHHELD
           --------------------           ---------          --------------

           Charles J. Hinkaty             9,101,029               64,059


           RE-APPROVAL OF THE COMPANY'S 1999 AMENDED AND RESTATED ANNUAL
           INCENTIVE PLAN
           -----------------------------------------------------------------


                                        FOR           AGAINST        ABSTAIN
                                        ---           -------        -------

                                      6,849,694       477,910         33,592




                                      -24-
<PAGE>





Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

           (a)      Exhibits
                    Exhibit 31.1   Certification of Chief Executive Officer
                    Exhibit 31.2   Certification of Chief Financial Officer
                    Exhibit 32.1   Certification of Chief Executive Officer
                                   Pursuant to 18 U.S.C. Section 1350
                    Exhibit 32.2   Certification of Chief Financial Officer
                                   Pursuant to 18 U.S.C. Section 1350

           (b) Reports on Form 8-K

                    The Company filed a Form 8-K with the SEC, dated April 16,
                    2004 to report under Item 5 of that Form that the Company
                    amended and restated its unsecured revolving credit
                    agreement and its senior notes as of April 13, 2004. Copies
                    of the complete agreements were filed as exhibits to the
                    Form 8-K.

                    The Company filed a Form 8-K with the SEC, dated April
                    30, 2004 to report under Item 12 of that Form that a press
                    release was issued on April 29, 2004 announcing earnings for
                    the three months ended March 31, 2004. A copy of the press
                    release was filed as an exhibit to the Form 8-K.

                    The Company filed a Form 8-K with the SEC, dated July 2,
                    2004 to report under Item 5 of that Form that the Company
                    entered into an Agreement and Plan of Merger with DLI
                    Holding Corp. and DLI Acquisition Corp., a direct
                    wholly-owned subsidiary of DLI Holding Corp., as of July 1,
                    2004. The Company also issued a press release dated July 2,
                    2004, announcing that it had entered into the Merger
                    Agreement. Copies of the Agreement and Plan of Merger and
                    press release were filed as exhibits to the Form 8-K.

                    The Company filed a Form 8-K with the SEC, dated July 30,
                    2004 to report under Item 12 of that Form that a press
                    release was issued on July 29, 2004 announcing earnings for
                    the three and six months ended June 30, 2004. A copy of the
                    press release was filed as on exhibit to the Form 8-K.






                                      -25-
<PAGE>



                                   SIGNATURES


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



                                                DEL LABORATORIES, INC.
                                                (Registrant)



           DATE:   AUGUST 4, 2004               /S/ DAN K. WASSONG
           -------------------------            ------------------
                                                Dan K. Wassong
                                                Chairman, President and
                                                Chief Executive Officer








           DATE:   AUGUST 4, 2004               /S/ ENZO J. VIALARDI
           ----------------------               --------------------
                                                Enzo J. Vialardi
                                                Executive Vice President and
                                                Chief Financial Officer







                                      -26-
<PAGE>