SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.   20549

                                  -----------

                                   FORM 10-K
                                  ----------

     [X]   Annual Report Pursuant to Section 13 or 15(d) of The Securities
           Exchange Act of 1934 for the fiscal year ended December 29, 2000 or

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

     Commission File Number 0-21952
                                  ----------

                         AMERICAN SAFETY RAZOR COMPANY
            (Exact name of registrant as specified in its charter)

                Delaware                              54-1050207
           (State or other jurisdiction of          (IRS Employer
           incorporation or organization)           Identification No.)


                       240 Cedar Knolls Road, Suite 401
                        Cedar Knolls, New Jersey 07927
         (Address of principal executive offices, including zip code)
                                  ----------

              Registrant's telephone number, including area code:
                                (973) 753-3000
                                  ----------


     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to SecNone 12(g) of the Act:

                                  ----------

     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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

     There were 12,110,349  shares of the  Registrant's  Common Stock, par value
$.01 per share, outstanding as of the close of business on March 16, 2001.

     Documents incorporated by reference - None.




<PAGE>


                               Table of Contents

                                    Part I
                                                                          Page

Item 1.      Business................................................       1
             Introduction to Our Business............................       1
             Product Lines...........................................       2
             Sales and Marketing.....................................       3
             Manufacturing...........................................       4
             Raw Materials...........................................       5
             Competition.............................................       5
             Other Factors Affecting Our Business....................       6
             Merger..................................................       8

Item 2.      Properties..............................................       8

Item 3.      Legal Proceedings.......................................       9

Item 4.      Submission of Matters to a Vote of Security Holders.....      10

                                    Part II

Item 5.      Market for Registrant's Common Equity and Related Stockholder
             Matters ...............................................       10

Item 6.      Selected Financial Data.................................      11

Item 7.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations...............................      12

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk    21

Item 8.      Financial Statements and Supplementary Data.............      21

Item 9.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure................................      22

                                   Part III

Item 10.     Directors and Executive Officers of the Registrant......      22

Item 11.     Executive Compensation..................................      25

Item 12.     Security Ownership of Certain Beneficial Owners and
             Management..............................................      27

Item 13.     Certain Relationships and Related Transactions..........      29

                                    Part IV

Item 14.     Exhibits, Financial Statement Schedule and Reports on
             Form 8-K ...............................................      30

             Signatures..............................................      31
-----------------------
Market  share and  product  distribution  data shown  throughout  were  obtained
through  Information  Resources  Incorporated,  a nationally  recognized  market
research  firm based in Chicago,  Illinois,  which  provides  the  Company  with
scanner based product  movement  data from U.S.  grocery  stores with annual all
commodity  volume of at least $2  million  and data from  drug  stores  and mass
merchandisers in major U.S. markets.


<PAGE>




                                     PART I


ITEM 1 - Business

Introduction to Our Business

         Established in 1875, the American  Safety Razor Company  (together with
its  subsidiaries,  the  "Company") is a leading  manufacturer  of  high-quality
private  label and value brand  consumer  products.  We operate our  business in
three  segments  consisting of Razors and Blades (which  includes  three product
lines:  consumer shaving razors and blades,  both store and value brand,  blades
and bladed hand tools and specialty  industrial and medical blades);  Cotton and
Foot Care and Custom Bar Soap. We distribute  our products  principally  through
the following retail channels: national mass merchandisers (Wal-Mart, Target and
Kmart), drug stores (CVS, Walgreens and RiteAid),  supermarkets (Safeway, Publix
and Albertson's) and home improvement  centers (Home Depot,  TruServ and Sherwin
Williams).  For the fiscal year ended  December  29,  2000,  we had net sales of
$318.8 million.

         We are the  largest  manufacturer  of  private  label and  value  brand
consumer  shaving  razors and blades in the  United  States,  and are the fourth
largest  manufacturer  in the total domestic  consumer  shaving market (based on
market research data for 2000 prepared by an independent  market research firm).
These  products,  which  generated  $142.0 million of 2000 net sales  worldwide,
represent  44.6% of total net sales and  consisted of $78.1  million of domestic
net sales and $63.9 million of  international  net sales.  Our products  provide
consumers with a value-priced  alternative  to more heavily  advertised  premium
priced brands,  while providing retailers with attractive  margins.  Our shaving
razor and blade products are primarily sold both under a retailer's  store brand
and  under  our value  brand  names  such as  Personna(R),  GEM(R),  Flicker(R),
MBC(TM),  Burma  Shave(R),  Acti-Flexx(TM)  and  Tri-Flexxx(TM).  We market both
complete razor and blade systems and components  which can be used alone or with
most other premium  priced  brands.  Based on independent  consumer  tests,  our
products perform at levels comparable to the premium priced products. We are the
only domestic  provider of a complete line of private label  disposable  razors,
blade shaving systems and replacement blades. We attribute our leadership in the
private  label and value  brand  markets to our long  history of  dedication  to
quality, low-cost manufacturing and competitive pricing.

         We believe that we are the largest single  manufacturer of both premium
and  value-priced  replacement  blades for bladed hand tools  (based on publicly
available  information  and Company  estimates).  Our  premium and  value-priced
blades and bladed hand tools are sold primarily under our Personna(R),  American
Line(TM) and Ardell(TM) brand names.  These products  generated $51.1 million of
2000 net sales  representing  16.0% of total net sales.  This  product  category
capitalizes on our precision shaving blade technology and includes such items as
single-edge  blades,  utility and carpet knives and replacement blades and paint
scrapers.   Our  blades  and  bladed  hand  tools  are  sold  to  consumers  and
professionals through home-improvement  centers/Do-It-Yourself retailers, retail
paint  chains and  hardware  stores and to  professionals  through  wholesalers,
distributors and specialty supply jobbers.

         We  have  leveraged  our  technical  and  manufacturing   expertise  by
developing a line of high-quality specialty industrial and medical blades. These
products  generated $17.0 million of 2000 net sales,  representing 5.3% of total
net sales. These specialty industrial blades are used in manufacturing processes
employed by a variety of industries including food-processing, fiber cutting and
automotive.  In addition,  we manufacture  and market carbon and stainless steel
surgical  blades,  disposable  scalpels  and  surgical  prep blades for the U.S.
health care markets  under the  Personna(R)  brand name to  customers  including
Allegiance Health Care,  McKesson General Medical,  Owens & Minor and Physicians
Sales and Service.

         We  believe  we  are  the  leading   private   label  and  value  brand
manufacturer  of a full line of personal  care cotton and foot care  products in
the United  States.  This  segment  generated  $81.1  million of 2000 net sales,
representing 25.4% of total net sales. Our cotton and foot care segment offers a
full product line including cotton swabs,  cotton balls,  puffs,  cosmetic pads,
cotton rolls,  pocket tissue,  and foot care products.  We have achieved  market
leadership in this category due to a series of strategic acquisitions, including
Megas  Beauty  Care,  Inc.  in 1994,  Absorbent  Cotton  Company in 1995 and the
purchase of certain assets of the American White Cross ("AWC") business in 1997.

         We  are  a   leading   domestic   manufacturer   of   cosmetic,   bath,
pharmaceutical  and specialty  custom bar soaps.  This segment  generated  $27.6
million of 2000 net sales, representing 8.7% of total net sales, and is marketed
primarily  under  customers'  brand names.  Our major  customers  include  Estee
Lauder, Johnson & Johnson, Gilchrist & Soames, Inc. and the NuSkin Corporation.



                                        1

<PAGE>



Operating Strategy

         In order to steadily grow our business,  improve  operations  and lower
our cost structure, our operating strategy is focused on five primary areas:

         o     Increase trade  penetration  through improved sales and marketing
               efforts.  We believe that private label and value brand  products
               generally  offer  higher  margins to  retailers  and  significant
               savings to consumers over premium priced  products.  We intend to
               improve  our  trade  channel   penetration   by  leveraging   our
               traditional  strengths  in key  consumer  product  categories  by
               improving the  effectiveness of our sales and marketing  efforts.
               Our  marketing   efforts  will  continue  to  focus  on  improved
               packaging and point of sale promotional activities.  In addition,
               we  expect  to  improve   coordination   between  our  sales  and
               production  functions to increase  order-fill  rates,  reduce our
               inventory levels and improve efficiency in our production lines.

         o     Expand  international  market  penetration and enter new markets.
               The international market for the shaving razor and blade category
               is  approximately  four  times  the size of the U.S.  market.  We
               expect to expand into new markets while continuing to grow within
               our current  markets.  We will continue to develop  relationships
               with  distributors in targeted  markets and establish local sales
               and  marketing   organizations  to  take  advantage  of  specific
               regional  opportunities.  To this end, we acquired  Wolco Holland
               B.V. in September 1998, which  distributes  shaving products into
               Northern  European  markets.  In 2000, we  established  new sales
               offices in Brazil,  Singapore and  Australia.  Our  international
               sales in all our business segments were $71.7 million in 2000.

         o     Develop and introduce new products.  We are continuously evolving
               our  primary  product  lines  with  product   improvements,   new
               innovations and line extensions.  We launched our new three-blade
               shaving system, Tri-Flexxx(TM),  to the U.S. market in the second
               quarter  of 1999.  This new  shaving  system  is  allowing  us to
               address the new three blade  standard  being set by a competitor.
               We have  also  introduced  a line of  premium  consumer  disposal
               razors and plan to introduce a multi-purpose industrial hand tool
               during the second  half of 2001.  We will  continue  our focus on
               product improvements, new innovations and line extensions.

         o     Continue to grow blades and bladed hand tools product  line.  Our
               blades and bladed hand tools product line is highly  regarded for
               quality  performance and maintains  strong levels of professional
               loyalty.  Sales of these  products  were  $51.1  million in 2000.
               Historically,  this part of our  business  has  grown  internally
               through  increased  market  penetration in the  professional  and
               Do-it-Yourself  retail channels.  Our goal is to improve upon the
               historical  steady  growth in this  strong  product  category  by
               refocusing on new product introductions.

         o     Reduce   operating   costs.  We  have  implemented  a  number  of
               initiatives to reduce  operating costs and increase  productivity
               and  efficiency in our consumer  shaving and cotton and foot care
               product lines. We have been able to reduce manufacturing costs in
               our consumer  shaving product line by opening a highly  automated
               blade  manufacturing  facility  in  Knoxville,   Tennessee,   and
               expanding our low-cost injection molding,  assembly and packaging
               operation  in Obregon,  Mexico.  The  integration  in 1997 of our
               industrial  blade  business  into our Verona,  Virginia  facility
               permitted  us to close  manufacturing  facilities  in  Union  and
               Maplewood, New Jersey. In addition, since our acquisition of AWC,
               we have made significant progress in reorganizing our five cotton
               and foot care manufacturing facilities.

Product Lines

         Our business  operations are  concentrated  in three product  segments:
Razors and Blades;  Cotton and Foot Care; and Custom Bar Soap. Within the Razors
and Blades  segment we offer three product  lines:  Consumer  Shaving Razors and
Blades;  Blades and Bladed  Hand Tools;  and  Specialty  Industrial  and Medical
Blades.


                                        2

<PAGE>



         The  following  table sets forth net sales and  percentage of total net
sales by segment and for product  lines for the years ended  December  29, 2000,
December 31, 1999 and 1998.
<TABLE>
<CAPTION>

                                                         2000                 1999                1998
                                                  ----------------    ------------------    ----------------
                                                                     (dollars in millions)

<S>                                               <C>        <C>       <C>         <C>      <C>        <C>
Razors and blades
 Consumer shaving razors and blades              $142.0     44.6%     $134.3      42.7%    $119.0     40.0%
  Blades and bladed hand tools                      51.1     16.0        50.6      16.1       48.9     16.4
  Specialty industrial and medical blades           17.0      5.3        16.6       5.3       16.1      5.4
                                                  ------    -----      ------     -----     ------    -----
      Total                                        210.1     65.9       201.5      64.0      184.0     61.9
Cotton and foot care                                81.1     25.4        84.3      26.8       87.3     29.3
Custom bar soap                                     27.6      8.7        29.0       9.2       26.2      8.8
                                                  ------    -----      ------     -----     ------    -----
      Total                                       $318.8    100.0%     $314.8     100.0%    $297.5    100.0%
                                                  ======    =====      ======     =====     ======    =====
</TABLE>


         Consumer Shaving Razors and Blades. We design, manufacture and market a
full line of shaving razors and blades,  including single-edge,  double-edge and
injector blades,  twin-blade  fixed and pivoting head  cartridges,  moving-blade
cartridges,  three-blade  cartridges,  disposables,  single-edge razors, women's
shaving razors and special-purpose shaving blades. We provide both total shaving
systems  and  components  which can be used alone or with most other  nationally
recognized  premium  brands.  These shaving  products are marketed under our own
brands  or under  store  brands of our  private  label  shaving  razor and blade
customers.

         Blades  and  Bladed  Hand  Tools.  We  design,  manufacture  and market
replacement  blades and bladed hand tools, such as single- edge blades,  utility
blades and knives,  carpet blades and knives and paint scrapers  primarily under
our Personna(R),  American  Line(TM) and Ardell(TM) brand names. The majority of
our blades  and bladed  hand  tools are sold to retail  customers  through  home
improvement   centers,   retail  paint   chains  and  hardware   stores  and  to
professionals through wholesalers, distributors and specialty supply jobbers.

         Specialty  Industrial and Medical  Blades.  We design,  manufacture and
market disposable  blades for both the industrial and medical markets.  Although
the  specialty  industrial  blade market is large and diverse,  our products are
specially designed for niche industrial applications. These specialty industrial
blades perform many of the cutting,  slicing or chopping  functions  involved in
manufacturing  processes  employed  by a variety of  industries  including  food
processing,  fiber cutting and automotive.  We manufacture and market carbon and
stainless-steel  surgical blades,  disposable  scalpels and surgical prep blades
for the U.S. health care markets under the Personna(R) brand name.

         Cotton and Foot  Care.  We believe  we are the  largest  private  label
manufacturers  and  distributors  of cotton  swabs,  cotton  balls and puffs and
cotton cosmetic pads. In addition,  we also  manufacture  cotton roll, foot care
products  and  pocket  tissue.  All of the  foregoing  products  are sold  under
retailers' private label as well as our own value brands: Personna(R), Megas(R),
ACCO(R),  Cottonettes(R)  and Crystal(R).  We believe that we are one of the few
personal care cotton products manufacturers and distributors that can bleach its
own cotton--a process integral to the production of cotton products.

         Custom Bar Soap. We manufacture custom-designed and formulated bar soap
for sale to a broad variety of  pharmaceutical,  skin care and department  store
customers,  primarily  under  such  customers'  own brand  names.  Our  flexible
manufacturing  equipment,   product  design  and  development  capabilities  and
reputation  for high  quality  allow us to compete in all major  custom bar soap
market segments.  Our 1997 expansion of synthetic soap manufacturing capacity in
a new highly  efficient  manufacturing  facility in Columbus,  Indiana,  and our
planned  2001  expansion to the  facility of 20,000  square  feet,  reflects our
commitment to new product development and a competitive cost structure.


Sales and Marketing

          Our sales and  marketing  organization  is divided into the  following
five sales  groups,  based on  distribution  channel and target  customers:  (1)
Domestic Consumer  Products,  (2) International Wet Shaving,  (3) Do-it-Yourself
and  Industrial;  (4) Medical and (5) Soap.  Our  products  are sold through our
major distribution channels utilizing internal sales and marketing resources, as
well as third- party distributors and manufacturers' representatives.  Our sales
personnel receive a fixed salary plus a bonus based on sales performance and our
earnings.

                                        3

<PAGE>




          Domestic Consumer Products.  Our private label and value brand shaving
razors  and  blades and cotton  and foot care  products  are sold  through  mass
merchandisers,  drug stores and  supermarket  chains.  Our sales of consumer and
personal care products are managed by a vice  president who oversees field sales
and related personnel.  Marketing support for the value brand shaving razors and
blades and cotton and foot care products focuses on temporary price  reductions,
point of sale  promotions  and direct  mail  advertisements  and is managed by a
senior vice president. To assist stores in promoting their private label shaving
and  cotton  and  foot  care  products,  we help  customers  develop  customized
marketing  programs,  including  managing product  introductions and promotional
planning  support.  In  addition,  such  merchandising  vehicles  as  trial-size
programs, floor displays,  point of purchase advertising,  bonus sizes, coupons,
rebates,  store signs and promotional  packs are available and incorporated into
individual  customers' programs.  We also provide customers with market research
to assist in determining the effectiveness of various marketing programs.

          International Wet Shaving. Our international shaving razors and blades
sales effort is headed by a senior vice  president who directs daily  activities
through group managers  responsible for specific  geographic  regions.  We use a
variety of sales  strategies  and  organizations,  each tailored to the specific
geographic  locations in which we sell our products,  including extensive use of
local distributors.  We have a manufacturing and packaging facility in Mexico, a
manufacturing,  warehousing and packaging  facility in Nazareth  Illit,  Israel,
warehousing and packaging  operations in Puerto Rico and the United Kingdom, and
warehousing  facilities in Canada and Brazil to further our penetration in those
markets.

          Do-it-Yourself and Industrial. We sell blades and bladed hand tools to
national and regional  chains of  home-improvement/  Do-it-Yourself  centers and
paint centers as well as hardware co-op, wholesale buying groups, and industrial
distributors.  Specialty  industrial  blades are sold to direct users,  original
equipment  manufacturers  and to a wide  variety  of  distributors  who  service
professional and niche segments.  Overall management of the industrial  division
is headed by a vice  president  with  specific  responsibilities  assigned  to a
director of field sales, director of market development and a general manager in
Europe.  Marketing  needs for the entire  division  are  overseen by a marketing
manager who reports to the vice president.

          Medical. We distribute medical blades to hospitals,  nursing homes and
other health care practitioners. Our medical blade sales efforts are headed by a
vice president who oversees a number of regional managers.  We focus our medical
blade marketing efforts primarily  through targeted  trade-journal  advertising,
direct mail promotions and medical trade shows.

          Soap.  Our soap  sales  effort is headed by a vice  president--general
manager  who   oversees  a  number  of  sales   people  and   national   account
representatives  who work with  customers  to custom  design soap  products  and
programs. We also utilize manufacturers' representatives to sell our products to
customers in the hospitality industry, such as hotels, and to market our line of
industrial and corporate promotional products.


Manufacturing

          We are a fully  integrated  manufacturer of shaving razors and blades,
blades for use with  bladed  hand tools and  specialty  industrial  and  medical
blades.  Our manufacturing  processes  include blade forming,  heat treating and
coating,  plastic  injection  molding and  assembly  and  packaging.  Blades are
manufactured at our facilities in Verona,  Virginia,  Knoxville,  Tennessee, and
Nazareth  Illit,  Israel.  We operate a  low-cost,  highly  efficient  injection
molding,  packaging and assembly  facility in Obregon,  Mexico.  During 2000, we
expanded  this  facility by  approximately  42,000 square feet. In July 1995, we
purchased a new  facility in  Knoxville,  Tennessee  in order to develop a fully
integrated shaving razors and blades  manufacturing  operation.  During 1998, we
completed our  three-year  manufacturing  plan to develop this fully  integrated
facility  which  now  performs  all  operations  attendant  to the  manufacture,
molding,  assembly and packaging of shaving  razors and blades.  During 2000, we
expanded our blade grinding and assembly capacity at this facility.  In 1997, we
restructured  our industrial  blade business,  moving  substantially  all of our
operations  into  a  single  facility  in  Verona,   Virginia,  and  closed  our
manufacturing facilities in Union and Maplewood, New Jersey.

          Proprietary manufacturing processes allow us to produce a wide variety
of products of different  quantities,  sizes and packaging  while  maintaining a
high level of quality.  We are continually  working to improve our  blade-making
productivity by adding new technologies and/or manufacturing processes.  Most of
the processes that we use to manufacture products are proprietary.

          The  production of our cotton and foot care  products  starts with the
receipt of cotton fibers in bales. The cotton is bleached,  either internally or
through the use of contract  bleachers.  Once the cotton has been bleached,  the
cotton is  processed  into yarn which is then used either in the  production  of
cotton balls, cotton swabs, cotton pads or other cotton products. Our cotton and
foot care

                                        4

<PAGE>



products are  manufactured  at our facilities in Cleveland,  Ohio,  Valley Park,
Missouri, Pomfret, Connecticut, Canavanas, Puerto Rico, and Nogales, Mexico.

          The  manufacture  of soap is a specialized  process which involves the
reaction  between  tallow  (animal  fat),  vegetable  oil or a fatty acid with a
caustic  substance (called an alkaline) and water. The resulting soap mixture is
then treated with  additives to decrease the  harshness of the  substance and to
give the soap  functional  or  cosmetic  applications.  We have the  ability  to
produce soap through four different manufacturing processes, producing a variety
of soap products with  different  characteristics.  We  manufacture  soap in our
Dayton, Ohio and Columbus, Indiana facilities.


Raw Materials

          The principal raw materials used by us in the manufacture of razor and
blade products are stainless and carbon steel,  plastics and packaging supplies,
all of which are normally readily  available in the  marketplace.  While all raw
materials  are purchased  from outside  sources,  we are not dependent  upon any
single supplier in our operations for any materials essential to our business or
not  otherwise  commercially  available  to us.  We have  been able to obtain an
adequate supply of raw materials,  and no shortage of raw materials is currently
anticipated.

          The  principal  raw  materials  used by us in the  manufacture  of our
cotton and foot care products include cotton fiber, plastic and paper sticks for
cotton swabs,  foam insoles and packaging  supplies.  We have developed  several
different qualified sources for our key material requirements.  We bleach cotton
internally for a portion of our production  requirements  while also maintaining
relationships with several sources for outside contract bleaching.

          The prices of certain of the raw materials used in our cotton and foot
care operations are subject to commodity  price  volatility,  particularly  with
respect to cotton fiber and paper sticks,  which may affect the profitability of
our  cotton  and foot care  products.  We have  been able to obtain an  adequate
supply of  high-quality  raw  materials,  and no  shortage of raw  materials  is
currently anticipated.

          The  principal  raw  materials  used by us in the  manufacture  of our
custom bar soap  products are tallow,  various  chemicals,  coconut  oil,  fatty
acids,  fragrances  and  packaging  supplies.  The  prices of certain of the raw
materials used by us, such as coconut oil and fatty acids,  are volatile,  which
may affect the  profitability of our soap products.  We have been able to obtain
an  adequate  supply of  high-quality  raw  materials,  and no  shortage  of raw
materials is currently anticipated.


Competition

          The shaving  razor and blade market is  competitive  and  sensitive to
changing  consumer  preferences and demands and competition is based on quality,
price and customer service.  Our principal  competitors in the shaving razor and
blade market are Gillette,  the Schick  Division of Pfizer and Societe Bic, S.A.
These  competitors  are  substantially  larger  and have  substantially  greater
resources than we do.

          We are the leading  producer of private  label and value brand shaving
razors and blades in the United States where our primary competitors are smaller
companies or companies with limited product offerings.  Periodically, one of the
premium brand shaving razor and blade manufacturers  mentioned above attempts to
compete with us by lowering prices or entering the private label market.

          In the blades and bladed hand tools and  specialty  industrial  blades
markets, competition is based on quality, price and customer service. We believe
that we compete  favorably  on these bases and are a leading  producer of blades
and bladed hand tools and specialty  industrial  blades in the United States. We
have a number of smaller  competitors  in blades  and bladed  hand tools such as
I.B.U. and U.S.  Blades.  The medical blade market is dominated by a division of
Becton Dickinson and Company.

          In  cotton  swabs,   cotton  balls,   puffs,   cotton  cosmetic  pads,
pharmaceutical and beauty coils and foot care products,  we compete on the basis
of  producing  a complete  line of  high-quality  private  label and value brand
products as well as quality,  price and customer  service.  The market for these
products  is  highly   competitive,   often  attracting   large   national-brand
manufacturers seeking to add incremental private label business.  Companies such
as  Chesebrough-Pond's,  Johnson & Johnson and Dr. Scholl's  invest  significant
resources in their premium brands,  partly in an attempt to reclaim market share
lost to private label and value brand products.


                                        5

<PAGE>



          The  custom  bar  soap  market  is  very   fragmented   with  numerous
participants,  some of which have greater  resources than we do.  Competition in
the custom bar soap market is based  primarily  on quality,  price and  customer
service.


Other Factors Affecting Our Business

Intellectual Property

          We  own a  large  number  of  U.S.  and  foreign  trademarks  used  in
connection  with our  blade,  cotton  and foot  care and soap  businesses.  Such
trademarks include "Personna(R)",  "Tri-Flexxx(R)",  "Acti-Flexx(R)", "MBC(TM)",
"Comfort   Touch(TM)",    "GEM(R)",   "Bump   Fighter(R)",   "Burma   Shave(R)",
"Flicker(R)",   "Crystal(R)",   "Personna  Care(TM)",   "Advance   Comfort(TM)",
"Megas(R)",  "Omnibus(R)",  "Centurion(R)",  and  "Kensington(R)".  Many  of our
trademarks  are  registered in the United States Patent and Trademark  Office or
the  corresponding  trademark  agencies  in other  countries.  We  consider  our
trademarks, in the aggregate, to be material to our business.

          In  addition,  we own or are  licensed to use various U.S. and foreign
patents  covering  the design and  manufacture  of certain of our  products.  We
consider our portfolio of owned and licensed  patents,  in the aggregate,  to be
material to our business.  In  particular,  the  "MBC(TM)" and  "Tri-Flexxx(TM)"
patents are considered material to our business.

          We consider  many of the  processes  which we use to  manufacture  our
products to be proprietary.  We have not, however, applied for patent protection
for any of these processes.  We instead rely on  non-disclosure  and non-compete
agreements with employees to protect our proprietary  rights in these processes.
There  can  be no  guarantee  that  these  agreements  will  provide  sufficient
protection in this regard, or that such employees will not breach them.

          We take  actions  and devote  resources  to protect  our  intellectual
property rights, including trademarks, patents, and proprietary processes. There
can be no assurance  that such actions and resources will be adequate to protect
such rights,  or that such rights will not be  successfully  challenged by third
parties or  government  authorities.  Moreover,  no assurance  can be given that
others will not assert rights in, or ownership of, our intellectual  property or
that we will be able to resolve such conflicts successfully.

          In addition,  the laws of certain  foreign  countries  may not protect
intellectual  property to the same  extent as do the laws of the United  States.
With respect to U.S. law, patent  protection is limited in duration,  and once a
patent  expires,  competitors  can make,  have  made,  use or sell  products  or
processes  that are  identical  or similar to those once  covered by the expired
patent.


Employees and Labor Relations

          As of December 29, 2000, we employed 2,516 people worldwide, including
1,975 hourly employees and 541 salaried employees.

          Four collective-bargaining  agreements cover certain of our employees:
the first  agreement  expires on September  27, 2003 and covers 350 employees at
the Verona,  Virginia plant; the second agreement  expires on March 31, 2002 and
covers 217 employees at the Dayton,  Ohio plant; the third agreement  expires on
October 1, 2002 and covers 107 employees at our Valley Park, Missouri plant; and
the fourth agreement expires on January 22, 2002 and covers 118 employees at our
Nazareth Illit, Israel plant. In addition to the foregoing employees,  we employ
an aggregate of 1,183 hourly employees at our Knoxville,  Tennessee;  Cleveland,
Ohio; Columbus,  Indiana;  Pomfret,  Connecticut;  Nogales,  Mexico;  Canavanas,
Puerto Rico;  Nottingham,  England;  Obregon,  Mexico; and San Juan, Puerto Rico
facilities,  none of whose  employees  are  covered  by a  collective-bargaining
agreement. We consider our relations with our employees to be satisfactory.



                                        6

<PAGE>



Environmental Matters

          We are subject to various federal,  state and local environmental laws
and  regulations  and the  environmental  laws and  regulations  of the  various
foreign  jurisdictions in which we do business. We anticipate that such laws and
regulations will become increasingly stringent in the future.

          In December 1986, we entered into a Special Order with the predecessor
agency of the Virginia Department of Environmental  Quality ("VDEQ") pursuant to
which we agreed to  investigate  and clean up groundwater  contamination  at our
Verona,  Virginia,  razor- blade manufacturing  facility.  Pursuant to a plan of
remediation  approved by the VDEQ's executive director on February 18, 1988, and
fully  implemented  in 1989,  we  built  and  currently  operate  a  groundwater
treatment facility to treat the contaminated  groundwater.  We regularly monitor
the level of contamination in the groundwater. We are not presently aware of any
additional  contamination  that is required to be remediated at this time at the
Verona site.

          When we purchased the Maplewood,  New Jersey,  facility as part of the
Ardell  acquisition,  we and the  previous  owners  of  Ardell  entered  into an
Administrative  Consent Order on March 31, 1989, with the New Jersey  Department
of Environmental Protection and Energy ("NJDEPE") obligating the previous owners
of Ardell to  perform  soil and  groundwater  remediation  under the New  Jersey
Environmental  Cleanup and  Responsibility  Act.  Through  September  1996,  the
previous  owners had assumed full  financial  and oversight  responsibility  for
remediation  of the site.  At that time, in settlement of claims by Ardell under
its insurance policies with Federal Insurance Company covering the periods March
6, 1979 to March 6, 1987,  Federal  Insurance  Company assumed primary financial
and  oversight  responsibility  for the  remediation.  The costs to complete the
remediation are being borne by Federal Insurance Company and the previous owners
of Ardell.  The previous  owners have posted the requisite  financial  assurance
bond with NJDEPE securing such remediation obligations. As security, a letter of
credit  was  obtained  by the  sellers  in favor of NJDEPE in the amount of $0.6
million  which  remains  intact.  We have  incurred  only limited  costs to date
regarding this matter and do not expect to incur any material future costs.

          The Valley Park,  Missouri,  plant  facility of our Megas  subsidiary,
which was acquired on March 3, 1995, is located on a parcel of land which is the
subject of a CERCLA  investigation.  This  investigation  is being undertaken in
response to a release of "hazardous substances" from upgradient industries.  The
affected  area,  which includes the  groundwater  beneath a segment of the plant
site,  has  been  found  to be  contaminated  by  various  chlorinated  solvents
including   trichloroethylene   ("TCE")   and   trichloroethane   ("TCA").   The
contaminated  aquifer had been the source of municipal  water supply wells.  The
results of a remedial investigation  completed for EPA and the State of Missouri
in January 1988 indicate that the source of the TCE contamination was located to
the  northwest  of the  Megas  facility.  The  EPA and  the  State  subsequently
developed a remediation plan to address the TCE  contamination and have executed
a Consent Order with a potentially  responsible party to implement the plan. The
focus  of their  investigation  has now  turned  to the  remediation  of the TCA
contamination  which the remedial  investigation  concluded was originating west
southwest  of the Megas  facility.  Megas does not use or have records of having
used the  identified  "hazardous  substances"  in its  facility and has not been
found to be a  potentially  responsible  party.  We have  reviewed  the 1994 EPA
limited remediation investigation report, performed limited soil gas analysis on
site and reviewed  groundwater  monitoring  results from wells  installed by the
Missouri  Department of Natural  Resources.  These  procedures have uncovered no
contamination  that could have contributed to the underlying plume. Based on our
investigation  to date,  results  of the soil gas  analyses  performed  on site,
discussions held with the Missouri Attorney  General's  office,  and groundwater
monitoring results, we believe that it is unlikely that Megas will be identified
as a potentially responsible party in connection with the EPA Superfund site.

          In response to a possible  release of water containing TCE outside its
razor blade  manufacturing  plant in  Knoxville,  Tennessee,  the Company had an
environmental consulting firm take soil and groundwater samples for the presence
of TCE. The sampling found  relatively low levels of TCE in soil adjacent to the
building and in the groundwater.  Pursuant to Tennessee  environmental  law, the
Company  notified  the  Tennessee   Department  of  Environmental   Conservation
("TNDEC") and in September 1999  installed  three  monitoring  wells and had the
contaminated  soil  excavated  and  the  groundwater  at the  property  boundary
sampled.  Pursuant to Tennessee  environmental law under the Voluntary  Cleanup,
Oversight and  Assistance  Program  ("VOAP"),  the Company has entered a Consent
Order which approves the investigation and remediation plan and requires ongoing
monitoring  of  groundwater.  It is likely the TNDEC will  require  sampling and
analysis of groundwater at the property  boundary for at least another year and,
possibly, the installation of a deep monitoring well to bedrock. If the analytic
results remain within the same order of magnitude,  the TNDEC likely will accept
the remedial  action to date and allow the closure of the monitoring  wells.  If
the monitoring reveals substantially higher levels more extensive  investigation
and remediation may be required.

          After  consultation with our advisors,  we do not believe any of these
matters should have a material effect on our consolidated

                                        7

<PAGE>



financial  position  or  results  of  operations,  regardless  of any claims for
indemnification.


Merger

          Effective April 23, 1999, RSA Acquisition Corporation, an affiliate of
J.W. Childs Equity Partners II, L.P. ("J.W.  Childs"),  completed its $14.20 per
share cash tender  offer for all  outstanding  shares of American  Safety  Razor
Company  (the  "Predecessor")  in  accordance  with a February  12,  1999 merger
agreement,  as amended on April 8, 1999, (the  "Acquisition") upon the terms and
subject to the  conditions set forth in the offer to purchase (the "Stock Tender
Offer").  Following  completion  of  the  Stock  Tender  Offer,  there  remained
approximately 266,601 American Safety Razor Company shares outstanding.  On July
1, 1999, RSA Acquisition Corporation and American Safety Razor Company completed
a  merger   transaction  (the  "Merger")   pursuant  to  which  RSA  Acquisition
Corporation  acquired the  remaining  shares of the  Predecessor  for $14.20 per
share.  The  aggregate  purchase  price,  including  transaction  costs  of $1.0
million,  paid for the common  stock  purchased  in the Stock  Tender  Offer was
approximately $173.0 million.

          Following   the  Merger,   American   Safety  Razor  Company  and  its
subsidiaries (the "Company")  became the surviving  corporation and is a direct,
wholly-owned  subsidiary of RSA Holdings  Corporation,  which is wholly-owned by
J.W. Childs, its affiliates and Company management.


ITEM 2 - Properties

          As of March 16, 2001, we owned or leased the following facilities:
<TABLE>
<CAPTION>

                                                                                                              Lease
                                                                                 Approximate     Owned or   Termination
Products                   Location                  Type of Facility            Square Feet     Leased        Date
--------                   --------                  ----------------            ------------     --------  -------------
<S>                        <C>                       <C>                            <C>          <C>        <C>
                           Cedar Knolls, New Jersey  Corporate headquarters          11,600      Leased     October 2004


Shaving razors and         Verona, Virginia          Manufacturing, packaging,      307,000      Owned
   blades, blades and                                  distribution and sales
   bladed hand tools and
   specialty industrial
   and medical blades
                           Knoxville, Tennessee      Manufacturing, packaging       125,000      Owned
                                                        and distribution

                           Bentonville, Arkansas     Sales                            2,000      Leased     May 2003

                           Newmarket, Ontario,
                              Canada                 Distribution and sales           2,500      Leased     August 2005

                           Obregon, Mexico           Manufacturing and packaging    139,000      Leased     April 2006

                           Nazareth Illit, Israel    Manufacturing, packaging        65,000      Leased     July 2002
                             distribution and sales

                           Nottinghamshire,          Packaging, distribution         36,000      Leased     July 2012
                             United Kingdom            and sales

                           Rio Grande,               Packaging, distribution         26,000      Leased     September 2010
                             Puerto Rico               and sales


                           Sao Paula, Brazil         Distribution and sales           1,200      Leased     April 2002

Cotton and foot care       Cleveland, Ohio           Manufacturing, packaging,      250,000      Leased     April 2013
                             distribution and sales

                           Valley Park, Missouri     Manufacturing and packaging    107,000      Owned


                                        8

<PAGE>



                           Nogales, Mexico           Manufacturing, packaging        86,000      Leased     March 2003
                                                       and distribution

                           Pomfret, Connecticut      Manufacturing                   14,000      Leased     Month to Month

                           Canavanas, Puerto Rico    Manufacturing, packaging        22,000      Leased     December 2008
                                                        and distribution

Soap                       Dayton, Ohio              Manufacturing, packaging,        270,000     Owned
                             distribution and sales

                           Columbus, Indiana         Manufacturing, packaging,         20,000     Leased     September 2005
                             distribution and sales

</TABLE>

          We supplement our distribution  capabilities  through public warehouse
facilities.  In  addition,  we use contract  packagers in selected  domestic and
international markets. We believe that the variety of domestic and international
locations gives us operating flexibility.

          We consider all of our  facilities to be in good  operating  condition
and adequate for our present purposes.  Our production facilities are capable of
being utilized at a higher capacity to support increased demand, if necessary.


ITEM 3 - Legal Proceedings

          During 1998,  the Company  purchased  bleached  cotton from an outside
supplier for use in its pharmaceutical coil business. The Company converted this
cotton from incoming bales into a coil, which was shipped to its  pharmaceutical
customers to be used as filler in bottles of oral dosage forms of pharmaceutical
products to prevent  breakage.  During the period from March through November of
1998,  the  process by which the  Company's  supplier  bleached  this cotton was
changed by  introducing  an expanded  hydrogen  peroxide  treatment.  Subsequent
testing  indicated  varying levels of residual  hydrogen  peroxide in the cotton
processed  during this time period and the supplier in November 1998 reduced the
levels of residual hydrogen peroxide in its bleaching process.  The Company,  to
date, has received complaints from a number of customers alleging defects in the
cotton  supplied them during the period and asserting these defects may have led
to changes in their products  pharmaceutical  appearance,  and with respect to a
limited number of products, potency. No lawsuits have been filed by any of these
customers.  The Company has received written notice of claims for damages in the
aggregate amount of approximately $117.0 million. In addition, $113.0 million of
this amount is for alleged lost profits from two  customers,  which lost profits
have not been substantiated.  It is possible that additional damage claims might
be  forthcoming.  On  March  2,  1999,  at the  request  of the  Food  and  Drug
Administration,  the Company  notified all (numbering  approximately  85) of its
pharmaceutical  cotton coil  customers that it was  withdrawing  from the market
those  lots of  cotton  coil  which may  contain  elevated  levels  of  hydrogen
peroxide.

          The Company has notified its supplier that, in the Company's view, the
supplier is primarily  responsible  for damages,  if any,  that may arise out of
this matter.  At this time, the Company's  supplier has agreed to be responsible
for the cost of fiber,  bleaching and freight of returned  product,  but has not
agreed to be responsible for any other damages and has expressed an intention to
assert defenses to the Company's claims.  The Company's  insurance carriers have
been timely  notified of the  existence  of the claim and have agreed to provide
defense in a  reservation  of rights  letter,  but are  continuing  to  evaluate
whether  coverage  would  apply to all  aspects of the  claims.  The  Company is
advised by outside counsel that it has strong legal arguments that the aggregate
amount of insurance  available for these claims would be sufficient to cover the
magnitude of the claims currently expressed.

          The Company also has been advised by its outside counsel that it has a
number of valid defenses to potential  customer  claims as well as a third party
claim  against its  supplier  for  damages,  if any,  incurred  by the  Company.
However, management cannot at this time make a meaningful estimate of the amount
or range of loss that could result from an unfavorable  outcome relating to this
overall  issue,  and  accordingly,  there can be no assurance that the Company's
exposure from this matter might not  potentially  exceed the  combination of its
insurance coverages and recourse to its supplier.  It is therefore possible that
the Company's  results of operations or cash flows in a particular  quarterly or
annual  period or its financial  position  could be  significantly  or adversely
affected by an ultimate unfavorable outcome of this matter.


                                        9

<PAGE>



          In June 1999, the Company  received  notice of the filing of a lawsuit
by The Gillette Company ("Gillette") asserting claims for damages and injunctive
relief for alleged patent  infringement,  misappropriation of trade dress, false
advertising  and breach of  contract in  connection  with the  marketing  of the
Company's  two-bladed and three-bladed  shaving  cartridge  systems (the MBC(TM)
introduced in 1994 and the  Tri-Flexxx(TM)  introduced in 1999). In August 1999,
the  Company  filed an answer and  counterclaims  in which it denied  Gillette's
allegations, sought a declaration that Gillette's patents are not infringed, are
invalid and  unenforceable,  and  asserted  counterclaims  against  Gillette for
damages  and  injunctive  relief  for,  among other  things,  alleged  antitrust
violations  and false  advertising.  In December  2000, the Company and Gillette
resolved their  differences on a mutually  acceptable  basis and the lawsuit was
dismissed.  The Company  entered  into a worldwide  license  relating to certain
Gillette  patents which was recorded as an intangible asset in December 2000 and
is being  amortized on a straight-line  basis over the weighted  average life of
the patents of fourteen years.

          We are involved in various other legal  proceedings  from time to time
incidental  to the  conduct  of our  business.  We  believe  that  any  ultimate
liability  arising out of such  proceedings  will not have a materially  adverse
effect on our consolidated financial position or results of operations.


ITEM 4 - Submission of Matters to a Vote of Security Holders

          None.


                                     PART II


ITEM 5 - Market for Registrant's Common Equity and Related Stockholder Matters

          Our common  stock,  par value $.01 per share (the "Common  Stock") was
traded in the  over-the-counter  market and was included in the NASDAQ  National
Market under the symbol  "RAZR" until June 30, 1999, at which time the Company's
Common  Stock was  delisted  as a result of the  Acquisition  and  Merger of the
Company.  Information  with respect to market prices of our Common Stock for the
first two quarters in 1999 is presented under Item 8 of this Report.

          We have not paid and do not  anticipate  paying any cash  dividends on
the Common Stock in the  foreseeable  future.  From time to time,  the Company's
Board of  Directors  intends  to review  our  dividend  policy.  Any  payment of
dividends  will be at the  discretion  of the  Board  of  Directors  and will be
dependent  on  our  earnings  and  financial  requirements  and  other  factors,
including the restrictions  imposed by the General  Corporation Law of the State
of Delaware on the payment of dividends and  covenants in our credit  agreement,
dated as of April 23, 1999 (the "Credit  Agreement") and the indenture  relating
to the 9 7/8%  Series B Senior  Notes  described  in Note 6 to our  Consolidated
Financial Statements under Item 8 of this Report.


                                       10

<PAGE>



ITEM 6 - Selected Financial Data

          The  following  data (in  thousands,  except per share data) should be
read in conjunction with our Consolidated  Financial  Statements  included under
Item 8 of this Report and  management's  discussion  and  analysis of  financial
condition and results of operations included under Item 7 of this Report.
<TABLE>
<CAPTION>

                                                                         Company   Predecessor
                                                                         -------   -----------
                                                           Company       Period      Period
                                                         ----------       from        from
                                                            Year        April 24,   January 1,             Predecessor
                                                            Ended        1999 to      1999 to   -----------------------------------
                                                           December      December    April 23,        Year ended December 31,
Statement of Operations Data:                             29, 2000      31, 1999       1999        1998       1997 (1)     1996 (2)
                                                         ----------    ----------   ----------  ----------  ----------   ----------

<S>                                                       <C>           <C>           <C>        <C>         <C>          <C>
Net sales                                                 $318,813      $227,159      $87,591    $297,488    $296,607     $260,636
Costs and expenses
   Cost of sales (3)                                       212,112       155,496       58,520      201,978     196,991      169,949
   Selling, general and administrative expenses             72,948        52,567       21,429       63,516      60,206       54,867
   Amortization of intangible assets                         4,569         3,178          835        2,543       2,501        2,503
   Special charges (4)                                           -             -            -        3,003           -            -
   Transaction expenses (5)                                      -             -       11,440            -           -            -
   Special termination benefits (6)                         14,351             -            -            -           -            -
                                                          --------      --------      -------    ---------    --------     --------

Operating income (loss)                                     14,833        15,918       (4,633)      26,448      36,909       33,317

Interest expense                                            19,842        15,112        3,907       12,270      12,270       11,719
                                                          --------      --------      -------    ---------    --------     --------

(Loss) income before income taxes and
   extraordinary item                                       (5,009)          806       (8,540)      14,178      24,639       21,598
Income taxes (benefit)                                         199         1,453         (842)       4,076       9,570        8,425
                                                          --------      --------      -------    ---------    --------     --------

(Loss) income before extraordinary item                     (5,208)         (647)      (7,698)      10,102      15,069       13,173
Extraordinary item, net of income tax benefit (7)                -          (611)        (118)           -           -            -
                                                          --------      --------      -------    ---------    --------     --------

Net (loss) income                                         $ (5,208)     $ (1,258)     $(7,816)    $ 10,102    $ 15,069     $ 13,173
                                                          ========      ========      =======     ========    ========     ========

Basic earnings per share:
   (Loss) income before extraordinary item                  $(0.43)       $(0.05)      $(0.64)       $0.83       $1.25        $1.09
   Extraordinary item                                            -         (0.05)       (0.01)           -           -            -
                                                          --------        ------       ------        -----       -----        -----

   Net (loss) income                                        $(0.43)       $(0.10)      $(0.65)       $0.83       $1.25        $1.09
                                                            ======        ======       ======        =====       =====        =====

Weighted average number of shares outstanding               12,110        12,110       12,110       12,107      12,094       12,093
                                                            ======        ======       ======       ======      ======       ======

Diluted earnings per share:
   (Loss) income before extraordinary item                  $(0.43)       $(0.05)      $(0.64)       $0.83       $1.23        $1.09
   Extraordinary item                                            -         (0.05)       (0.01)           -           -            -
                                                            ------        ------       ------        -----       -----       ------

   Net (loss) income                                        $(0.43)       $(0.10)      $(0.65)       $0.83       $1.23        $1.09
                                                            ======        ======       ======        =====       =====        =====

Weighted average number of shares outstanding               12,110        12,110       12,198       12,223      12,255       12,139
                                                            ======        ======       ======       ======      ======       ======

</TABLE>


                                       11

<PAGE>

<TABLE>
<CAPTION>


                                                    Company                   Predecessor
                                            ----------------------- ------------------------------------
                                              December                        December 31,
Balance Sheet Data:                          29, 2000       1999       1998         1997         1996
                                            ----------   ---------- ----------   ----------   ----------

<S>                                           <C>          <C>        <C>          <C>          <C>
Total assets                                  $389,586     $402,871   $262,897     $254,081     $229,997
Long-term obligations, including
   current portion                             191,023      185,616    127,333      123,612      112,181
Stockholders' equity                           113,860      129,002     69,554       59,439       44,523
</TABLE>

(1)  Our  results of  operations  include  results  for the Cotton  Division  of
     American White Cross,  Inc.  ("AWC") since its April 22, 1997,  acquisition
     date.  Results for the period ended December 31, 1997, include net sales of
     AWC of $21.1 million.
(2)  Our results of operations include results for Bond-America Israel Blades,
     Ltd., and its wholly-owned subsidiary, A.I. Blades, Inc. (collectively,
     "Bond") since its March 29, 1996, acquisition date. Results for the period
     ended December 31, 1996, include net sales of Bond of $11.2 million.
(3)  Cost of sales for the  period  from April 24,  1999 to  December  31,  1999
     includes  additional   inventory  costs  of  $9.0  million  resulting  from
     adjusting  the  carrying  value of acquired  inventories  to reflect  their
     estimated fair market value at the Acquisition date.
(4) See Note 14 to our Consolidated Financial Statements relating to the special
charges in 1998.
(5)  Transaction  expenses of $11.4 million were incurred in connection with the
sale of the Predecessor (see Note 1 to our Consolidated  Financial  Statements).
(6) Expenses relating to the special termination  benefits of $14.4 million were
incurred in  connection  with the early  retirement  program  (see Note 8 to our
Consolidated
     Financial Statements).
(7) Extraordinary item relates to the early  extinguishment of debt in 1999 (see
Note 6 to our Consolidated Financial Statements).


ITEM 7 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

General

     The following discussion and analysis of financial condition and results of
operations is based upon and should be read in conjunction with the Consolidated
Financial  Statements of our Company and notes thereto  included under Item 8 of
this  Report.  Additionally,  management  has  prepared  pro  forma  results  of
operations for 1999 to enable a more meaningful comparison between 2000 and 1999
results of operations and 1999 and 1998 results of operations.  Accordingly, see
"Year Ended  December  29, 2000  Compared to Pro Forma Year Ended  December  31,
1999" and "Pro  Forma  Year  Ended  December  31,  1999  Compared  to Year Ended
December 31, 1998"  discussions  below which compare the year ended December 31,
1999 on a pro forma basis,  assuming the Acquisition  and the related  financing
transactions  had  occurred  on January  1, 1999,  with 2000 and 1998 for a more
meaningful comparison of operations.

Forward-Looking Statements.
     Management's  discussion and analysis of financial condition and results of
operations  and  other   sections  of  this  Report   contain   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933 and
Section  21E  of  the   Securities   Exchange   Act  of  1934.   We  intend  the
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  in these  sections.  All  statements  regarding our
expected financial  position,  business and financing plans are  forward-looking
statements.   Such   forward-looking   statements   are  identified  by  use  of
forward-looking  words such as "anticipates,"  "believes," "plans," "estimates,"
"expects,"  and  "intends"  or words or  phrases of  similar  expression.  These
forward-looking  statements  are  subject  to  various  assumptions,  risks  and
uncertainties,  including but not limited to,  changes in political and economic
conditions,  demand for our products,  acceptance  of new  products,  technology
developments  affecting our products and to those  discussed in our filings with
the Securities and Exchange Commission. Accordingly, actual results could differ
materially from those contemplated by the forward- looking statements.

Results of Operations

     American  Safety Razor Company is a leading  manufacturer  of  high-quality
private  label and value  brand  consumer  products.  We have  three  reportable
segments,  organized  primarily on the basis of differences  in products,  which
consist of Razors  and  Blades,  Cotton  and Foot Care and Custom Bar Soap.  The
razors and blades segment includes three product lines,  consumer shaving razors
and  blades,  both store and value  brand,  blades and bladed  hand  tools,  and
specialty  industrial  and  medical  blades.  The cotton  and foot care  segment
includes  cotton  swabs,  cotton  balls  and  puffs,   cosmetic  pads,  tissues,
pharmaceutical  and beauty  coil,  and foot care  products.  The custom bar soap
segment includes  cosmetic/skin care, bath,  pharmaceutical and specialty custom
bar soaps. We distribute our products to the retail and  professional  trades in
the United States and in selected  international  markets.  The following  table
sets forth information with respect to our business segments:

                                       12

<PAGE>

<TABLE>
<CAPTION>


                                                                    Company                 Predecessor
                                             Company          --------------------     -------------------           Predecessor
                                       -----------------         Period from              Period from             -----------------
                                           Year Ended         April 24, 1999 to        January 1, 1999 to            Year Ended
                                       December 29, 2000      December 31, 1999           April 23, 1999          December 31, 1998
                                       -----------------      -----------------        --------------------       -----------------
                                                                                              (dollars in millions)


<S>                                    <C>           <C>       <C>         <C>          <C>         <C>          <C>          <C>
Net Sales:
   Razors and blades                   $210.1        65.9%     $146.3      64.4%        $55.2       63.0%        $184.0       61.9%
   Cotton and foot care                  81.1        25.4        58.8      25.9          25.5       29.1           87.3       29.3
   Custom bar soap                       27.6         8.7        22.1       9.7           6.9        7.9           26.2        8.8
                                       ------       -----      ------     -----         -----      -----         ------      -----
      Total                            $318.8       100.0%     $227.2     100.0%        $87.6      100.0%        $297.5      100.0%
                                       ======       =====      ======     =====         =====      =====         ======      =====

Operating Income (3):
   Razors and blades (1) (2) (4)        $14.3         6.8%      $11.4       7.8%         $6.7       12.1%         $21.0       11.4%
   Cotton and foot care (2) (4)          (0.8)       (1.0)        1.8       3.1           0.3        1.2            4.1        4.7
   Custom bar soap (2)                    1.3         4.7         2.7      12.2          (0.2)      (2.9)           1.3        5.0
                                        -----        ----       -----      ----          ----       ----          -----        ---
      Total                             $14.8         4.6%      $15.9       7.0%         $6.8        7.8%         $26.4        8.9%
                                        =====        ====       =====       ===          ====        ===          =====        ===
</TABLE>

(1) Operating income in 2000 for Razors and Blades includes expenses relating to
special  termination  benefits of $14.4  million.  (2) Operating  income for the
period from April 24, 1999 to  December  31, 1999 for Razors and Blades,  Cotton
and Foot Care and
    Custom Bar Soap  includes a purchase  accounting  adjustment to inventory of
    $8.8 million, $0.2 million and $0.05 million, respectively.
(3) Operating  income for the  period  from  January  1, 1999 to April 23,  1999
    excludes  transaction  expenses of $11.4 million incurred in connection with
    the sale of the Predecessor.
(4) Operating  income in 1998 for  Razors  and  Blades  and Cotton and Foot Care
    includes special charges of $2.8 million and $0.2 million, respectively.


Overview

    Net sales are gross sales net of returns and cash discounts.

    Gross  profit is net sales  less cost of  sales,  which  includes  the costs
necessary to make our products,  including  the costs of materials,  production,
warehousing  and  procurement,  and  the  costs  to  ship  our  products  to our
customers,  including  freight and distribution.  The principal  elements of our
cost to make our products are raw materials and  packaging  supplies,  labor and
manufacturing  overhead.  Raw  materials,  among other things,  consist of steel
(both carbon and stainless),  cotton fiber, coconut oil, fatty acids and plastic
resins.  Labor costs  consist  primarily  of hourly wages plus  employee  fringe
benefits. Manufacturing overhead generally includes indirect labor, plant costs,
depreciation and manufacturing supplies.

    Selling,  general and administrative  expenses include the costs incurred to
support  the  sale  and   marketing   of  our   products  and  the  general  and
administrative  costs of managing the business,  including  salaries and related
benefits, commissions, advertising and promotion expenses, bad debts, travel and
insurance.


Pro Forma  Condensed  Consolidated  Statement of  Operations  for the Year Ended
December 31, 1999

    The  following  unaudited  pro forma  condensed  consolidated  statement  of
operations  has  been  prepared  by  management  from the  historical  financial
statements of the  Predecessor  for the period from January 1, 1999 to April 23,
1999, and the historical financial statements of the Company for the period from
April 24, 1999 to December 31, 1999. The Acquisition,  and the related financing
transactions, are assumed to have occurred on January 1, 1999 (see Notes 1 and 6
to our Consolidated Financial Statements).  The pro forma condensed consolidated
statement of operations for the year ended December 31, 1999, is not necessarily
indicative  of the results of  operations  that would have occurred for the year
ended December 31, 1999, had the Acquisition and relating financing transactions
occurred  on  January  1,  1999.  In  preparation  of the  pro  forma  condensed
consolidated statement of operations,  management has made certain estimates and
assumptions  that  affect  the  amounts  reported  in the  unaudited  pro  forma
condensed  consolidated  statement  of  operations.   The  unaudited  pro  forma
condensed  consolidated  statement of operations for the year ended December 31,
1999, should

                                       13

<PAGE>



be read in  conjunction  with the  historical  financial  statements and related
notes  thereto of the Company  which are included in this Annual  Report on Form
10-K for the year ended December 29, 2000.
<TABLE>
<CAPTION>

                             Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
                                                  Year Ended December 31, 1999
                                                          (In Thousands)


                                      Predecessor                    Predecessor         Company                         Company
                                       Historical                      Pro Forma        Historical                      Pro Forma
                                       Period from                    Period From       Period From                       Year
                                    January 1, 1999                   January 1, 1999  April 24, 1999                     Ended
                                      to April 23,     Pro Forma      to April 23,      to December    Pro Forma        December
                                         1999         Adjustments        1999          31, 1999        Adjustments      31, 1999
                                    ---------------   -----------    ----------------  --------------  -----------      ----------

<S>                                        <C>           <C>              <C>              <C>            <C>           <C>
Net sales                                  $87,591       $     -          $ 87,591         $227,159       $    -        $314,750
Cost of sales:
   Cost of sales                            58,520           460 (a)        58,980          146,488            -         205,468
   Purchase accounting adjustment
      to inventory                               -         9,008 (b)         9,008            9,008       (9,008)(b)       9,008
                                           -------       -------          --------         --------       ------        --------

   Gross profit                             29,071        (9,468)           19,603           71,663        9,008         100,274

Selling, general and administrative
   expenses                                 21,429            68 (c)        21,497           52,567            -          74,064
Amortization of intangible assets              835           638 (d)         1,473            3,178            -           4,651
Transaction expenses                        11,440             -            11,440                -            -          11,440
                                           -------       -------          --------         --------       ------        --------

   Operating (loss) income                  (4,633)      (10,174)          (14,807)          15,918        9,008          10,119

Interest expense                             3,907         2,030 (e)         5,937           15,112         (138)(g)      20,911
                                           -------        ------          --------         --------       ------        --------
   (Loss) income before income taxes
      and extraordinary item                (8,540)      (12,204)          (20,744)             806        9,146         (10,792)

Income taxes (benefit)                        (842)       (4,666)(f)        (5,508)           1,453        3,631 (f)        (424)
                                           -------       -------          --------         --------       ------        --------

   (Loss) income before
      extraordinary item                   $(7,698)      $(7,538)         $(15,236)        $   (647)      $5,515        $(10,368)
                                           =======       =======          ========          =======       ======        ========
</TABLE>


(a) Adjustment  to provide pro forma  depreciation  expense  resulting  from the
    application  of  purchase  accounting  adjustments  computed  based  on  the
    remaining useful lives of plant and equipment.

(b) Adjustment  to reflect the impact on cost of sales of  additional  inventory
    costs resulting from adjusting the carrying value of acquired inventories to
    reflect their estimated fair market value assuming the Acquisition  occurred
    on January 1, 1999.

(c) Adjustment to reflect the elimination of amortization of unrecognized  prior
    service cost and unrecognized gains related to the Predecessor's pension and
    postretirement benefit plans.

(d) Adjustment to reflect the  elimination  of $705 of  amortization  related to
    historical  goodwill and record pro forma  amortization of $1,343 related to
    intangible  assets  including  goodwill,  trademarks and patents recorded in
    connection with the Acquisition. Goodwill and trademarks are being amortized
    over a 40-year  useful life and patents are being  amortized  over a 15-year
    useful life. These periods are believed by management to be reasonable based
    on the expected lives of the underlying processes,  products,  and equipment
    assumed to be acquired.

(e) Adjustment to reflect (i) the elimination of historical  interest expense of
    $494 related to the Predecessor's  credit facilities,  loan commitment fees,
    and  the  amortization  of  deferred   financing   costs,   (ii)  pro  forma
    amortization of $353 for the $8,001 in deferred  financing costs incurred in
    connection  with the financing,  amortized over the respective  lives of the
    Company's credit facilities,  and (iii) pro forma interest expense of $2,171
    on the Company's  credit  facilities  related to the balances  assumed to be
    outstanding on January 1, 1999.  Interest expense has been computed assuming
    that the LIBOR-based interest rate (plus the applicable margin)

                                       14

<PAGE>



    option is selected by the Company.  Balances  assumed to be  outstanding  on
    January 1, 1999,  includes  $5,000 under the revolving  credit  facility and
    $88,000 under the Term Loan Facility.  In addition,  the purchase of $30,700
    in Senior Notes on June 10, 1999, was assumed to occur on January 1, 1999.

(f) Adjustment  to  reflect  the  income  tax  consequences  of  the  pro  forma
    adjustments  computed  at the  statutory  rate of  39.7%  excluding  the net
    adjustment for goodwill of $451 which is not tax deductible.

(g) Adjustment  to reflect pro forma  interest  expense of $261 on the Company's
    credit facilities related to the balances assumed to be outstanding on April
    24, 1999.  Interest expense has been computed  assuming that the LIBOR-based
    interest  rate  (plus  the  applicable  margin)  option is  selected  by the
    Company.  Balances assumed to be outstanding on April 24, 1999, are the same
    as described in (e) above.  Adjustment to reflect pro forma interest expense
    reduction  of $399 related to the $30,700 in Senior Notes which were assumed
    to be purchased on April 24, 1999.


Year Ended December 29, 2000 Compared to Pro Forma Year Ended December 31, 1999

    Net Sales.  Net sales for 2000 and pro forma 1999 were  $318.8  million  and
$314.8 million,  respectively,  an increase of $4.0 million, or 1.3%. We did not
experience  any  significant  price  increases in 2000 across our three business
segments.  Our  increase  in net  sales  for 2000  related  primarily  to volume
increases.

    Razors and Blades.  Net sales of our razors and blades  segment for 2000 and
pro forma 1999 were $210.1 million and $201.5 million, respectively, an increase
of $8.6 million, or 4.3%.

    Net sales of  shaving  razors  and  blades  for 2000 and pro forma 1999 were
$142.0 million and $134.3 million,  respectively, an increase of $7.7 million or
5.8%.  Net sales of domestic  value  branded  shaving  products  decreased  2.8%
primarily  reflecting a decline in promotional programs and inventory reductions
by a key  customer.  In  addition,  net sales for pro forma 1999 were  favorably
affected by sales of the Revlon  Perfect  Finish(TM)  shaving  system  which was
discontinued  in September  1999.  Net sales of domestic  private  label shaving
products  increased  1.9%  primarily  reflecting  sales  gains  relating  to the
Tri-Flexxx(TM) and Premier  Comfort(TM) shaving products which was substantially
offset by a decline in  promotional  programs by several  customers  and reduced
sales  volume  to  certain   customers.   Net  sales  of  shaving   products  in
international   markets  increased  15.8%  (net  of  a  7%  negative  impact  of
unfavorable  exchange rates) reflecting  stronger sales in most of the Company's
markets.   The  increase   results   primarily  from  increased   sales  of  the
Tri-Flexxx(TM)  and long handle  disposable  shaving products and from increased
sales penetration in existing and new markets.

    Net sales of blades and  bladed  hand tools for 2000 and pro forma 1999 were
$51.1 million and $50.6 million,  respectively,  an increase of $0.5 million, or
1.0%.

    Net sales of specialty  industrial and medical blades for 2000 and pro forma
1999 were $17.0  million and $16.6  million,  respectively,  an increase of $0.4
million,  or 2.2%.  Sales  of  specialty  industrial  products  increased  10.0%
reflecting strong  distribution  gains. Sales of medical products decreased 4.0%
primarily   reflecting   inventory   reductions   by   certain   customers   and
consolidations within the healthcare industry.

    Cotton and Foot Care.  Net sales of cotton and foot care  products  for 2000
and pro forma  1999  were  $81.1  million  and $84.3  million,  respectively,  a
decrease of $3.2 million or 3.8%.  The decrease  results  primarily from reduced
sales volume  resulting  from issues related to the cotton coil matter (see Note
12 to our Consolidated  Financial Statements and Item 3 - Legal Proceedings) and
redesign of products by certain customers.

    Custom Bar Soap.  Net sales of our custom bar soap products for 2000 and pro
forma 1999 were $27.6  million and $29.0  million,  respectively,  a decrease of
$1.4 million or 4.6%. The decrease results primarily from decreased sales volume
to several  pharmaceutical/skin  care customers including repackaging of product
for one  customer,  which was  somewhat  offset by  increased  sales volume to a
specialty customer.

    Gross  Profit.  Gross profit  increased  $6.4 million to $106.7  million for
2000,  from $100.3  million  for pro forma 1999 due  primarily  to the  purchase
accounting  adjustment  to inventory  of $9.0  million for pro forma 1999.  As a
percentage of net sales, gross profit was 33.5% for 2000 and 31.9% for pro forma
1999.  Excluding  the 1999 purchase  accounting  adjustment to inventory of $9.0
million, gross

                                       15

<PAGE>



profit  decreased $2.6 million to $106.7  million for 2000,  from $109.3 million
for pro forma 1999, and as a percentage of net sales, gross profit was 33.5% for
2000,  and 34.7% for pro forma 1999.  Blade  margins  declined due  primarily to
product mix,  higher  material  costs,  higher  depreciation  expense related to
capacity expansion projects and from the negative impact of unfavorable exchange
rates.  Cotton margins  declined due primarily to higher material costs,  higher
absorption  of  manufacturing  overheads  over a lower  sales  base  and  higher
manufacturing  overheads which were somewhat offset by labor efficiencies.  Soap
margins  declined due primarily to product mix, the repackaging of product for a
customer and higher  absorption of  manufacturing  overheads  over a lower sales
base.

    Operating and Other Expenses.  Selling,  general and administrative expenses
were  22.9% of net sales for 2000,  compared  to 23.5% for pro forma  1999.  The
decrease primarily reflects a decrease in legal expenses, an increase in pension
income and a decrease  in  employee  bonuses  which were  somewhat  offset by an
increase  in   administrative   overhead   associated  with  the  new  corporate
headquarters.  Amortization of intangible assets was substantially  unchanged at
$4.6  million for 2000 and $4.7  million for pro forma  1999.  Interest  expense
decreased  $1.1 million to $19.8  million for 2000,  from $20.9  million for pro
forma 1999,  due  primarily  to the  write-off  in July 1999 of $2.2  million of
deferred financing costs and lower commitment fee expense in connection with the
$52.5 million  permanent  reduction in the  Company's  term loan  facility.  The
decrease  was somewhat  offset by  increased  interest  expense  resulting  from
additional  borrowings  under the  Company's  revolving  credit  facility and an
increase in interest rates.

    Costs of $14.4 million  associated  with the early  retirement  program (see
Note  8  to  our  Consolidated   Financial   Statements)  are  included  in  the
consolidated  statement  of  operations  in the  caption,  "Special  termination
benefits".

    The Company's  effective  income tax rate was 4.0% for 2000,  and (3.9)% for
pro forma 1999,  and varies from the United States  statutory rate due primarily
to  nondeductible  goodwill  amortization,   certain  nondeductible  transaction
expenses in 1999,  foreign taxes in excess of the U.S. tax rate and state income
taxes, net of the federal tax benefit.


Pro Forma Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

    Net Sales.  Net sales for pro forma 1999 and 1998 were  $314.8  million  and
$297.5 million,  respectively,  an increase of $17.3 million or 5.8%. We did not
experience  any  significant  price  increases in 1999 across our three business
segments.  Our  increase  in net  sales  for 1999  related  primarily  to volume
increases.

    Razors and Blades.  Net sales of our razors and blades segment for pro forma
1999 and 1998 were $201.5 million and $184.0 million,  respectively, an increase
of $17.5 million or 9.5%.

    Net sales of  shaving  razors  and  blades  for pro forma 1999 and 1998 were
$134.3 million and $119.0 million, respectively, an increase of $15.3 million or
12.8%.  Net sales of domestic value branded  shaving  products  increased  32.1%
compared to 1998,  rebounding  from weak sales in 1998,  reflecting  sales gains
relating to the launch of the new Tri-Flexxx(TM) shaving product, an increase in
promotional  programs with several customers and overall increased  distribution
of the Company's shaving  products.  Net sales of domestic private label shaving
products were  substantially  unchanged  compared to 1998.  Net sales of shaving
products in international markets increased 9.2% (net of a 2% negative impact of
unfavorable exchange rates) reflecting stronger sales in certain markets.

    Net sales of blades and  bladed  hand tools for pro forma 1999 and 1998 were
$50.6 million and $48.9  million,  respectively,  an increase of $1.7 million or
3.6%.  This growth  primarily  reflects  increased  sales of our Personna(R) and
American Line(TM) brands of products as a result of distribution gains.

    Net sales of specialty  industrial and medical blades for pro forma 1999 and
1998 were $16.6  million and $16.1  million,  respectively,  an increase of $0.5
million,  or 3.2%.  Sales of specialty  industrial  products  decreased 6.3% due
primarily to inventory  adjustments by certain customers and mix shifts to lower
priced blade products.  Additionally,  certain of our  distributors  experienced
increased competition in their serviced niche markets. Sales of medical products
increased 12.3% due primarily to increased distribution of certain products.

    Cotton and Foot Care.  Net sales of cotton  and foot care  products  for pro
forma  1999 and 1998 were  $84.3  million  and $87.3  million,  respectively,  a
decrease of $3.0 million,  or 3.5%. This decrease results  primarily from issues
related to the cotton  coil matter  (see Note 12 to our  Consolidated  Financial
Statements and Item 3 - Legal  Proceedings)  and the continuing  integration and
reorganization of the Company's cotton operations.

                                       16

<PAGE>




    Custom Bar Soap.  Net sales of our custom  bar soap  products  for pro forma
1999 and 1998 were $29.0 million and $26.2 million, respectively, an increase of
$2.8 million,  or 10.5%.  This increase  results  primarily from increased sales
volume to certain of our pharmaceutical/skin care customers.

    Gross Profit.  Gross profit increased $4.8 million to $100.3 million for pro
forma 1999 from $95.5  million for 1998.  As a  percentage  of net sales,  gross
profit  was  31.9% for pro forma  1999 and  32.1% for 1998.  Excluding  the 1999
purchase  accounting  adjustment  to  inventory  of $9.0  million,  gross profit
increased $13.8 million to $109.3 million for pro forma 1999, from $95.5 million
for 1998, and as a percentage of net sales, gross profit was 34.7% for pro forma
1999, and 32.1% for 1998. Blade margins  improved due to favorable  product mix,
lower  material  costs and lower  manufacturing  costs  reflecting the Company's
continuing efforts to reduce  manufacturing  costs. Soap margins improved due to
lower material costs for certain raw  materials.  This  improvement in blade and
soap margins was somewhat  offset by increased  depreciation  expense  resulting
from the Acquisition and by lower margins in the Company's cotton operations due
to increased  distribution costs and higher  manufacturing  overheads  resulting
primarily from issues related to the continuing  integration and  reorganization
of the cotton operations.

    Operating and Other Expenses.  Selling,  general and administrative expenses
were 23.5% of net sales for pro forma  1999,  compared  to 21.4% for 1998.  This
increase primarily  reflects an increase in promotional  support for our shaving
blade  products  and an  increase  in legal  fees  resulting  from the  Gillette
lawsuit.  Amortization of goodwill and other  intangible  assets  increased $2.2
million  to $4.7  million  for pro  forma  1999  from  $2.5  million  for  1998,
reflecting   increased   amortization  of  intangible   assets  related  to  the
Acquisition.  Interest  expense  increased $8.6 million to $20.9 million for pro
forma 1999,  from $12.3  million for 1998,  due  primarily  to the  write-off of
approximately  $2.2 million in  connection  with the  reduction in the term loan
facility and increased  interest  expense,  commitment fees and  amortization of
deferred  loan  fees  associated  with  debt  incurred  in  connection  with the
Acquisition.  This  increase  was  somewhat  offset  by lower  interest  expense
relating to the Company's  $30.7 million  purchase of its 9 7/8% Series B Senior
Notes in June 1999.

    In connection with the Acquisition  the Predecessor  incurred  approximately
$11.4 million in transaction  expenses related  primarily to (i) amounts paid to
redeem  all  of  the  outstanding  options  to  purchase  common  stock  of  the
Predecessor,  (ii)  costs  incurred  by or  on  behalf  of  the  Predecessor  in
connection  with the  Acquisition,  including legal and other advisory fees, and
(iii) costs incurred by or on behalf of the Predecessor related to payments made
to  certain  employees  of the  Predecessor  in  connection  with the  change of
control.

    Costs of $0.7 million (net of tax benefit)  associated  with the purchase of
the Senior Notes and repayment of the Terminated  Credit Facility (see Note 6 to
our  Consolidated  Financial  Statements)  are  reflected  in  the  consolidated
statement of operations in the caption "Extraordinary item".

    Our  effective  income  tax rate for pro forma  1999 and 1998 was (3.9)% and
28.7%,  respectively,  and varies  from the  United  States  statutory  rate due
primarily  to  nondeductible  goodwill   amortization,   certain  non-deductible
transaction expenses, state income taxes, net of the federal tax benefit, and in
1998 due to a tax benefit relating to the settlement of tax issues.  (See Note 9
to our Consolidated Financial Statements).


Liquidity and Capital Resources

    Our  primary  sources  of  liquidity  are  cash  flow  from  operations  and
borrowings under our revolving credit facility.  For the year ended December 29,
2000, net cash provided by operating  activities  amounted to $9.4 million.  For
the period  from April 24,  1999 to  December  31,  1999,  net cash  provided by
operating  activities  amounted to $19.3 million and for the period from January
1, 1999 to April 23,  1999,  net cash used in operating  activities  amounted to
$5.3  million.  For the years ended  December  31,  1998,  net cash  provided by
operating  activities amounted to $12.5 million.  Net cash provided by operating
activities for the year ended  December 29, 2000 primarily  reflects an increase
in earnings excluding the expense relating to the special  termination  benefits
of $14.4 million which was somewhat  offset by net changes in the  components of
working  capital,  primarily  accounts  receivable  and  inventories.  Net  cash
provided by operating  activities for the period from April 24, 1999 to December
31, 1999  primarily  reflects a decrease in  inventories of $15.1 million due in
part to the write-off of the purchase accounting  adjustment of $9.0 million and
a decrease in income taxes  receivable of $3.7 million which was somewhat offset
by a decline in net income,  a decrease  in accounts  payable and an increase in
accounts  receivable.  Net cash used in operating activities for the period from
January 1, 1999 to April 23, 1999 primarily  reflects the payment of transaction
expenses  of  $11.4  million  relating  to  the  Acquisition,   an  increase  in
inventories of $7.7 million and an

                                       17

<PAGE>



increase in income taxes receivable of $2.3 million,  which were somewhat offset
by a decrease  in accounts  receivable.  The  increase  in net cash  provided by
operating  activities for 1998 compared to 1997 primarily reflects a decrease in
trade receivables of $1.2 million  reflecting the timing of customer payments as
compared  to an  increase  of $7.7  million in 1997,  offset by a decline in net
income and a decline in accounts payable.

    For the year ended December 29, 2000, net cash used in investing  activities
related primarily to capital  expenditures of $15.4 million. For the period from
April 24, 1999 to December  31, 1999 and for the period from  January 1, 1999 to
April 23,  1999,  net cash used in  investing  activities  related  primarily to
capital  expenditures  of $8.4 million and $3.6 million,  respectively.  For the
year ended December 31, 1998, net cash used in investing  activities amounted to
$12.6 million and related primarily to capital expenditures of $11.4 million and
the purchase of Wolco for $0.6 million.

    For the year ended December 29, 2000, net cash used in financing  activities
resulted  from $9.3  million in net advances to the  Company's  parent which was
somewhat offset by net borrowings of $5.3 million. For the period from April 24,
1999 to December 31, 1999, net cash used in financing  activities  resulted from
$18.6 million in net advances to the Company's  parent and deferred loan fees of
$0.4 million which were substantially offset by net borrowings of $18.4 million.
For the period from January 1, 1999 to April 23, 1999,  net cash  provided  from
financing  activities  resulted  from net  borrowings of $39.5 million which was
reduced by net advances to the  Company's  parent of $24.2  million and deferred
loan fees of $7.6  million.  For the year  ended  December  31,  1998,  net cash
provided  by  financing  activities  was  $2.1  million.  Net cash  provided  by
financing activities for 1998 resulted from net borrowings of $2.0 million.

    At December  29, 2000,  long-term  indebtedness  amounted to $191.0  million
(including  the  current  portion  of $11.9  million),  and we had $8.9  million
available for future borrowings and letters of credit under our revolving credit
facility. The weighted-average  interest rate incurred by us with respect to all
our debt  obligations  was  approximately  9.8% for the year ended  December 29,
2000.

    On March 28, 2001, the Company  amended its Credit  Agreement  which,  among
other  things,  modified  the  financial  ratio  requirements  relating  to  the
leverage,  fixed charges and interest  coverage  ratios.  These  financial ratio
requirements were modified to allow the Company to meet certain of the financial
ratio  requirements.  In  addition,  the  Company's  principal  stockholder  has
guaranteed  $5.0 million of borrowings  under the Company's  existing  revolving
credit  facility.  On March 28, 2001,  the Company  entered  into an  additional
revolving  credit  facility of $5.0  million  which has been  guaranteed  by the
principal stockholder.

    Our liquidity  requirements  are  primarily  the funding of working  capital
needs,  which primarily  consist of inventory and accounts  receivable,  capital
expenditures  and  scheduled  principal and interest  payments on  indebtedness.
Capital expenditures in 2000 totaled $15.4 million, as compared to $12.1 million
in 1999 and  $11.4  million  in 1998.  We expect  our  capital  expenditures  to
approximate  $13.0 million in 2001. It is  anticipated  that these  expenditures
will fund  purchases  of equipment  to support  production  capacity for new and
existing products as well as routine on-going requirements.

    We believe that our cash on hand,  anticipated funds from operations and the
amounts  available to us under our revolving  credit facility will be sufficient
to cover our working capital,  capital  expenditures,  debt service requirements
and tax obligations for at least the next 12 months.

    Our ability to fund operations, make capital expenditures and make scheduled
principal  and interest  payments or to refinance our  indebtedness  will depend
upon our future financial and operating  performance,  which will be affected by
prevailing economic conditions and financial,  business and other factors,  some
of which are beyond our control.

Market Risk

    The Company is exposed to various  market risk factors  such as  fluctuating
interest  rates and changes in foreign  currency  rates.  These risk factors can
impact our results of operations,  cash flows and financial position.  We manage
these risks through regular operating and financing  activities and periodically
use derivative financial instruments such as foreign exchange option and forward
contracts  and  interest  rate  cap  and  swap   agreements.   These  derivative
instruments  are  placed  with  major  financial  institutions  and  are not for
speculative or trading purposes.

    The following analysis presents the effect on the Company's  earnings,  cash
flows and  financial  position  as if the  hypothetical  changes in market  risk
factors  occurred  on  December  29,  2000.  Only the  potential  impacts of our
hypothetical  assumptions  are analyzed.  The analysis  does not consider  other
possible effects that could impact our business.

                                       18

<PAGE>




Interest Rate Risk

    At December 29, 2000, the Company carried $191.0 million of outstanding debt
on its books, with $120.9 million of that total held at variable interest rates.
In October 1999, the Company  entered into an interest rate cap agreement and an
interest rate swap  agreement  with a bank covering  $56,250,000 of its variable
rate  debt  outstanding  to  manage  its  interest  rate risk (see Note 6 to our
Consolidated  Financial  Statements).  Holding all other variables constant,  if
interest  rates  hypothetically  increased  or  decreased  by 10%, the impact on
earnings,  cash flow and financial position would not be material.  In addition,
if interest rates  hypothetically  increased or decreased by 10%, with all other
variables  held  constant,  the fair  market  value of our $69.3  million 9 7/8%
Series B Senior Notes would increase or decrease by approximately $2.8 million.


Foreign Currency Risk

    The  Company  sells to  customers  in foreign  markets  through  our foreign
operations  and  through  export  sales  from  our  plants  in  the  U.S.  These
transactions are often denominated in currencies other than the U.S. dollar. Our
primary currency exposures are the Euro, British Pound Sterling, Canadian Dollar
and Mexican Peso.

    The Company limits its foreign currency risk by operational means, mostly by
locating  its   manufacturing   operations  in  those  locations  where  it  has
significant exposures in major currencies. The Company has entered into currency
option  contracts to minimize  the risk of foreign  currency  fluctuations.  The
value of these  contracts at December 29, 2000 was not material to the Company's
earnings, cash flow and financial position.


New Accounting Standards

    In June 1998, the Financial  Accounting  Standards Board (the "FASB") issued
Statement of Financial  Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging  Activities" ("FAS 133"). FAS 133 establishes  standards
for accounting and disclosure of derivative  instruments.  This new standard, as
amended by FAS 137 and FAS 138, is effective for fiscal quarters of fiscal years
beginning  after June 15,  2000.  The Company  was  required to adopt FAS 133 on
December 30, 2000.  The Company's use of  derivative  instruments  is limited to
interest  rate  cap and  swap  agreements  and  foreign  currency  options.  The
implementation  of this new  standard  did not  have a  material  effect  on the
Company's results of operations or financial position.

     In March 2000, the FASB issued FASB  Interpretation No. 44, "Accounting for
Certain  Transactions  Involving Stock  Compensation",  an interpretation of APB
Opinion No. 25,  "Accounting for Stock Issued to Employees." The  Interpretation
clarifies  guidance  for  certain  issues that arose in the  application  of APB
Opinion No. 25. The Company adopted the  Interpretation  on July 1, 2000,  which
did not have any effect on the  Company's  results of  operations  or  financial
position.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting   Bulletin   (SAB)  No.  101,   "Revenue   Recognition  in  Financial
Statements".  SAB No.  101  provides  additional  guidance  relating  to revenue
recognition. The Company adopted SAB No. 101, as amended by SAB No. 101A and SAB
No.  101B,  in the  fourth  quarter  of 2000  and  concluded  that  its  revenue
recognition policies were in compliance with SAB No. 101.

    In May 2000, the Emerging  Issues Task Force ("EITF") issued EITF No. 00-14,
"Accounting  for  Certain  Sales  Incentives".  EITF  No.  00-14  addresses  the
recognition,  measurement,  and income statement classification of various sales
incentives including discounts, coupons, rebates, and free products or services.
EITF No.  00-14  requires a vendor to  recognize  discounts,  coupons and rebate
obligations as a reduction of revenue. The Company has historically followed the
practice of recording  the cost of  discounts,  coupons and rebates as a selling
expense.  The Company is required to adopt EITF No. 00-14 in the second  quarter
of 2001. At the time of adoption, the Company will reclassify prior quarters and
prior  year  financial  statements  to  conform  to  the  new  income  statement
classification.  As  the  Company  believes  its  current  accounting  practices
relative to the timing and method of recognizing  such costs is consistent  with
the consensus it is not expected  that the adoption of the  consensus  will have
any impact on the Company's  financial  position or results of  operations.  The
Company is in the process of determining the amounts to be reclassified.

    In January 2001, the EITF reached a consensus on one of the issues currently
under  consideration  within EITF Issue No.  00-22,  "Accounting  for Points and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free  Products  or Services  to be  Delivered  in the  Future".  This  consensus
requires a vendor to recognize a rebate or refund obligation as a reduction of

                                       19

<PAGE>



revenue based on a systematic  and rational  allocation of the costs of honoring
rebates or refunds earned. The Company has historically followed the practice of
recording the cost of such items as a selling  expense.  The Company is required
to adopt the  consensus in the first  quarter of 2001.  At the time of adoption,
the Company will reclassify  prior quarters and prior year financial  statements
to conform to the new income statement  classification.  As the Company believes
its  current  accounting   practices  relative  to  the  timing  and  method  of
recognizing  such costs is consistent with the consensus it is not expected that
the adoption of the consensus  will have any impact on the  Company's  financial
position or results of operations.  The Company is in the process of determining
the amounts to be reclassified.



Contingencies

    Refer to Note 12 - Commitments,  Contingencies and Other to our Consolidated
Financial Statements for a discussion of legal contingencies.


Inflation

    Inflation  has not  been  material  to our  operations  within  the  periods
presented.


                                       20

<PAGE>



ITEM 7A - Quantitative and Qualitative Disclosures about Market Risk

    The  information  called  for by this item is  provided  under the  captions
"Market Risk",  "Interest  Rate Risk" and "Foreign  Currency Risk" under Part I,
Item 7 - Management's Discussion and Analysis of Financial Condition and Results
of Operations of this Report.


ITEM 8 - Financial Statements and Supplementary Data

    The consolidated  financial  statements of the registrant are submitted as a
separate  section of this  Report  starting on page 32.  Information  related to
"Quarterly Data (Unaudited)" is summarized below:
<TABLE>
<CAPTION>

                                                                                                    2000
                                                                           ----------------------------------------------------
                                                                            First          Second        Third          Fourth
                                                                           --------       --------      --------       --------
                                                                          (In thousands, except per share and market price data)

<S>                                                                        <C>            <C>           <C>            <C>
Net sales                                                                  $77,209        $79,921       $83,434        $78,249
Gross profit                                                                25,408         26,502        29,327         25,464
Special termination benefits                                                     -              -             -         14,351  (1)
Net (loss) income                                                             (103)         1,695         1,888         (8,688)
Earnings per share - net (loss) income
   Basic                                                                     (0.01)          0.14          0.16          (0.72)
   Diluted                                                                   (0.01)          0.14          0.16          (0.72)
Market price
   High                                                                        n/a            n/a           n/a            n/a
   Low                                                                         n/a            n/a           n/a            n/a
</TABLE>

<TABLE>
<CAPTION>
                                                                                                    1999
                                                                            -----------------------------------------------------
                                                                             First         Second         Third         Fourth
                                                                            -------       --------       -------       --------
                                                                           (In thousands, except per share and market price data)

<S>                                                                         <C>           <C>            <C>            <C>
Net sales                                                                   $70,287       $77,246        $86,080        $81,137
Gross profit                                                                 23,458        18,362  (2)    31,167         27,747
Transaction expenses                                                              -        11,440  (3)         -              -
Income (loss) before extraordinary item                                       1,974       (13,397)         1,259          1,819
Extraordinary item                                                                -          (729)             -              -
Net income (loss)                                                             1,974       (14,126)         1,259          1,819
Earnings per share - income (loss) before extraordinary item
   Basic                                                                       0.16         (1.11)          0.10           0.15
   Diluted                                                                     0.16         (1.11)          0.10           0.15
Earnings per share - net income (loss)
   Basic                                                                       0.16         (1.17)          0.10           0.15
   Diluted                                                                     0.16         (1.17)          0.10           0.15
Market price
   High                                                                       14.06         14.25            n/a            n/a
   Low                                                                         9.88         11.81            n/a            n/a
</TABLE>

(1)  Expenses  relating  to  the  special   termination   benefits  incurred  in
     connection  with  the  early   retirement   program  (see  Note  8  to  our
     Consolidated Financial Statements).

(2)  Includes  additional   inventory  costs  of  $9.0  million  resulting  from
     adjusting  the  carrying  value of acquired  inventories  to reflect  their
     estimated fair market value at the Acquisition date.

(3) Relates to expenses  incurred in connection with the sale of the Predecessor
(see Note 1 to our Consolidated Financial Statements).



                                       21

<PAGE>



ITEM 9 -  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure

     On  April  18,  2000,  the  Company  dismissed  PricewaterhouseCoopers  LLP
("PWC"),  which served as the Company's  independent  public  accountants  since
1994.

     PWC's reports on the financial  statements  for the year ended December 31,
1998,  for the period  from April 24,  1999 to December  31,  1999,  and for the
period  from  January  1,  1999 to April 23,  1999 did not  contain  an  adverse
opinion,   disclaimer  of  opinion  or   qualification  or  modification  as  to
uncertainty, audit scope or accounting principles.

     The  change in the  independent  public  accountants  was  approved  by the
Company's Board of Directors on April 18, 2000.

     During  1998  and  1999  and  through   April  18,  2000,   there  were  no
disagreements  with PWC on any matter of  accounting  principles  or  practices,
financial  statement   disclosure,   or  auditing  scope  or  procedure,   which
disagreement,  if not resolved to the  satisfaction of PWC would have caused PWC
to make reference to the subject matter of the  disagreements in connection with
their report.

     On  April  18,  2000,  the  Company  engaged  its  new  independent  public
accountants,  Ernst & Young LLP,  which was approved by the  Company's  Board of
Directors  on April 18, 2000.  During 1998 and 1999 and through  April 18, 2000,
the Company did not consult with Ernst & Young LLP regarding the  application of
accounting principles or any reportable events.


                                    PART III


ITEM 10 - Directors and Executive Officers of the Registrant

         The  following  table sets forth the name,  age and position of each of
the Company's directors, executive officers and other significant employees. All
of the Company's  officers are elected  annually and serve at the  discretion of
the Company's Board of Directors.

Name               Age  Position

James D. Murphy    54   President, Chief Executive Officer and Director
J. Andrew Bolt     44   Senior Vice President - Chief Financial Officer
James W. Nelson    61   Senior Vice President - Manufacturing and Logistics
Karen A. August    43   Senior Vice President - Consumer Products
Mario E. Soussou   50   Senior Vice President - International
Lawrence Friedman  54   Vice President and Secretary - General Counsel
Gary R. Moorhead   52   Vice President - General Manager, Custom Bar Soap
Paul W. Tonnesen   36   Vice President- Consumer Products
Gary S. Wade       52   Vice President - Industrial/Specialty
Adam L. Suttin     33   Vice President, Assistant Secretary and Director
John W. Childs     59   Director
Timothy J. Healy   51   Director
Raymond B. Rudy    70   Director, Non-Executive Chairman

Biographical Information

     Mr. Murphy joined the Company as President and Chief  Executive  Officer on
April 23, 1999 in  connection  with the  acquisition  of American  Safety  Razor
Company by RSA  Acquisition  Corporation,  an  affiliate of J.W.  Childs  Equity
Partners II, L.P. (the  "Acquisition").  He has nearly 25 years of experience in
the packaged goods industry both domestically and  internationally.  He has held
the senior  management  position in three  companies  over the last ten years as
either Country Manager,  Division President or President/CEO.  Mr. Murphy is the
former  President  and CEO of the Personal Care Group which was acquired by J.W.
Childs in 1996 and sold to Playtex  Products,  Inc. in 1998.  Prior to this, Mr.
Murphy was Managing  Director for Scott Paper,  Ltd. from 1995 through 1996 with
responsibility  for the U.K. and Ireland.  From 1983 to 1995, he held increasing
levels of  responsibility  at L&F Products  including  President of the Canadian
Division  and  President  of the  Personal  Care  Division.  He also held senior
management positions

                                       22

<PAGE>



at the Airwick Division of Ciba Geigy and American Home Products.

         Mr. Bolt  joined the  Company on  November  6, 2000,  and has served as
Senior Vice President and Chief Financial  Officer since that time. Mr. Bolt has
20 years of experience in financial and management  positions,  most recently as
Chief  Financial  Officer of Maple Leaf Foods,  USA, from 1995 until joining the
Company.   He  previously  served  as  Chief  Financial  Officer  for  Bidermann
Industries and Federal Resources and held various positions with Ernst & Young.

         Mr. Nelson joined the Company as Senior Vice President -  Manufacturing
and Logistics on April 23, 1999 in connection with the Acquisition. From 1963 to
1998,  Mr.  Nelson has held senior  management  positions in  manufacturing  and
logistics  with consumer and health care product  companies  such as Reckitt and
Colman, L&F Products, and Johnson and Johnson.

         Ms.  August  joined the  Company as Senior  Vice  President  - Consumer
Products on April 23, 1999 in connection  with the  Acquisition.  Ms. August has
over 15 years of consumer  packaged goods  experience that spans a wide range of
categories  in  personal  care and  household  products.  Prior to  joining  the
Company,  Ms. August was Vice  President,  Marketing for the Personal Care Group
from 1996 to 1998.  Prior to working at  Personal  Care Group,  Ms.  August held
positions of increasing responsibility for L&F Products.

     Mr. Soussou joined the Company as Senior Vice President - International  on
April 23, 1999 in connection with the Acquisition.  From 1996 to 1998 he was the
Managing Director,  International  Business for the Personal Care Group where he
oversaw the company's international business. From 1992 to 1995, Mr. Soussou was
Vice President of Snapple Beverage Corporation. He was Director of International
Business  Development  and Exports at Best Foods,  Inc.,  where he held  various
positions of increasing responsibility between 1981 and 1992.

     Mr.  Friedman  joined  the  Company on April 3, 2000 and has served as Vice
President and Secretary,  General Counsel since that time.  Prior to joining the
Company,  Mr. Friedman was Director,  Group Legal Services for Reckitt & Colman,
Inc., since 1997 and from 1990 to 1997 he was the Senior Vice President, General
Counsel for Reckitt & Colman,  Inc.  From 1984 to 1990,  Mr.  Friedman  was Vice
President, General Counsel for Durkee-French Foods, Inc.

         Mr.  Moorhead  joined  the  Company  in 1980,  in  connection  with the
acquisition  of the Hewitt Soap  Company and held  various  sales and  marketing
positions  until April 1997,  when he became Vice  President - General  Manager,
Custom Bar Soap.

     Mr.  Tonnesen  joined the  Company  in October  1998 and has served as Vice
President - Consumer Products since that time. Prior to joining the Company, Mr.
Tonnesen was National Sales Manager for the Personal Care Group since 1996. From
1994 to 1996,  Mr.  Tonnesen  was  Eastern  Zone Sales  Manager  at H.J.  Heinz,
Inc./Kraft General Foods. From 1991 to 1994, Mr. Tonnesen held various positions
at Kraft General Foods.

         Mr. Wade has been employed in various  sales,  management and marketing
positions in our  industrial  blade  division  since 1978. In 1990, Mr. Wade was
appointed Vice President -  Industrial/Specialty.  Prior to joining the Company,
Mr. Wade was employed in various sales and sales  management  positions with the
General Products Division of Philip Morris U.S.A.

     Mr. Suttin became a member of the Company's Board of Directors on April 23,
1999 in connection with the Acquisition. He has been a Managing Director of J.W.
Childs  Associates,  L.P.  ("JWCA")  since January 1998,  and has been with JWCA
since  July  1995.  Prior to that  time,  he was an  executive  at Thomas H. Lee
Company from August 1989, most recently holding the position of Associate. He is
a director  of Quality  Stores,  Inc.,  Empire  Kosher  Poultry,  Inc.  and DESA
International, Inc.

     Mr. Childs became a member of the Company's Board of Directors on April 23,
1999 in connection  with the  Acquisition.  He has been  President of JWCA since
July 1995. Prior to that time, he was an executive at Thomas H. Lee Company from
May 1987, most recently holding the position of Senior Managing Director.  Prior
to that, Mr. Childs was with the Prudential  Insurance  Company of America where
he held various executive positions in the investment area ultimately serving as
Senior  Managing  Director  in  charge of the  Capital  Markets  Group.  He is a
director of Big V Supermarkets,  Inc.,  Quality Stores,  Inc.,  Chevys Holdings,
Inc.,  Beltone  Electronics  Corp.,  Pan Am  International  Academy,  Inc., DESA
International, Inc., Edison Schools Inc., and Bass Pro Inc.

     Mr. Healy became a member of the Company's  Board of Directors on April 23,
1999 in connection with the Acquisition. He has been a Managing Director of JWCA
since July 1998.  From 1991 to 1998, Mr. Healy was President and Chief Executive
Officer of Select Beverages.  Prior to 1991, he was Executive Vice President and
Chief Operating Partner of National  Beverage  Corporation and from 1972 to 1986
he held various executive and marketing  positions of increasing  responsibility
for Proctor & Gamble Co.; Frito-

                                       23

<PAGE>



Lay, Inc.; Heinz, USA; General Foods Corporation and the NutriSweet  division of
G.D. Searle & Co. He is the chairman of IDF Holdings, Inc.

     Mr. Rudy became a member of the  Company's  Board of Directors on April 23,
1999 in connection with the Acquisition. He has been a Managing Director of JWCA
since July 1995.  Prior to that time,  he was Deputy  Chairman  and  Director of
Snapple Beverage  Corporation from 1992 until the company was sold in 1994. From
1987  to  1989,  Mr  Rudy  was  President  of  Best  Foods  Subsidiaries  of CPC
International.  From 1984 to 1986,  Mr. Rudy was Chairman,  President and CEO of
Arnold Foods Company,  Inc. He is Chairman of Beltone  Electronics  Corp.,  Vice
Chairman of Empire Kosher Poultry,  Inc. and a director of International Diverse
Foods, Inc., Widmer Brothers Brewing Company and DESA International, Inc.



                                       24

<PAGE>



ITEM 11 - Executive Compensation

          The  following  table  sets  forth a summary  of  certain  information
regarding  compensation  paid or accrued by the Company for services rendered to
the Company  for the fiscal  year ended  December  29,  2000,  and the two prior
fiscal  years,  paid or awarded to those persons who were, at December 29, 2000:
(i) the Company's chief executive  officer,  (ii) the Company's four most highly
compensated  executive  officers  other than the chief  executive  officer whose
total   annual   salary  and  bonus   exceeded   $100,000   during  such  period
(collectively,   the  "Named  Executive  Officers")  and  (iii)  two  additional
individuals for whom  disclosure  would have been provided but for the fact that
the  individuals  were not serving as an executive  officer of the Company as of
December 29, 2000.
<TABLE>
<CAPTION>

                           Summary Compensation Table

                                                                                                                 Long-Term
                                                     Annual                                                     Compensation
                                                  Compensation                                              ----------------------
                                               -----------------                          Other Annual       Securities Underlying
Name and Principal Position                    Year    Salary(1)       Bonus(2)          Compensation(3)               Options
---------------------------                    ----    ---------       --------          ---------------    ----------------------
<S>                                            <C>       <C>            <C>                    <C>         <C>             <C>
James D. Murphy                                2000      411,528              0                        0                   0
   President and Chief                         1999      274,364        372,500                        0                   0
   Executive Officer                           1998            0              0                        0                   0

James W. Nelson                                2000      191,258         35,000                        0                   0
   Senior Vice President -                     1999      134,065        132,500                        0                   0
   Manufacturing and Logistics                 1998            0              0                        0                   0

Karen A. August                                2000      205,988         35,000                        0                   0
   Senior Vice President -                     1999      135,400        130,000
   Consumer Products                           1998            0              0                        0                   0

Mariou E. Soussou                              2000      205,988         48,000                        0                   0
   Senior Vice President -                     1999      137,050        130,000                        0                   0
   International                               1998            0              0                        0                   0

Gary S. Wade                                   2000      151,359         25,000                        0                   0
   Vice President - Industrial/                1999      141,828         84,500                   32,000   (4)             0
   Specialty                                   1998      134,678         64,300                        0                   0

Thomas H. Quinn                                2000            0              0                        0                   0
   Past Chairman and                           1999       41,668              0                  374,000   (5)             0
   Chief Executive Officer                     1998      125,000              0                        0                   0

Thomas G. Kasvin                               2000            0              0                        0                   0
   Past Senior Vice President--                1999      150,003        105,000                1,191,250   (6)             0
   Chief Financial Officer                     1998      190,832              0                        0                   0
</TABLE>

----------------------------------
(1)  Includes amounts deferred under the Company's 401(k) plan.

(2)  The  Company   provides  bonus   compensation   based  on  an  individual's
     achievement of certain  specified  objectives,  with additional  rewards if
     certain operating objectives, including, among others, EBITDA, are met. The
     bonus plan is administered by the Company's Compensation Committee.

(3)  Except as  indicated,  no executive  named in the table  received any other
     annual  compensation in an amount in excess of the lesser of either $50,000
     or 10% of the total of annual salary and loans  reported for him in the two
     preceding columns for the periods covered by this table.


                                       25

<PAGE>



(4) Payment related to the April 30, 1999 redemption of the Predecessor's  stock
options.

(5)  Payment pursuant to a Letter Agreement dated as of February 5, 1999 between
     the Company and Mr. Quinn.

(6)  Payment of $660,000  pursuant to an Employment  Protection  Agreement dated
     December 8, 1997  between the Company and Mr.  Kasvin,  payment of $300,000
     pursuant to a Letter  Agreement dated July 15, 1998 between the Company and
     Mr. Kasvin and payment of $231,250 related to the April 30, 1999 redemption
     of the Predecessor's stock options.

     In June 2000, RSA Holdings  Corporation,  the Company's  parent,  adopted a
stock  incentive  plan,  whereby  stock  options  may be granted  to  directors,
officers  and  other  key  employees  of  RSA  Holdings   Corporation   and  its
subsidiaries to purchase a specified number of shares of common stock for a term
not to exceed  10 years.  The plan  provides  for the  granting  of  options  to
purchase  up to  110,000  shares of common  stock of RSA  Holdings  Corporation.
Grants of options to be issued to  directors,  officers and other key  employees
vest and become exercisable upon the attainment of certain  performance goals at
the end of  certain  performance  periods,  as defined in the plan or after nine
years. At December 29, 2000, there were 93,700 stock options  outstanding  under
the RSA Holdings Corporation stock plan.

     The following table shows RSA Holdings  Corporation stock options exercised
by each of the Named  Executive  Officers  during the fiscal year ended December
29, 2000,  including  the aggregate  value of gains on the date of exercise.  In
addition,  this table includes the number of shares covered by both  exercisable
and  non-exercisable  stock  options as of fiscal  year-end,  and the values for
unexercised options based on the year-end value of the RSA Holdings  Corporation
common stock.  Except as listed in the table, no other Named  Executive  Officer
exercised  any RSA Holdings  Corporation  stock  options or  beneficially  owned
unexercised RSA Holdings Corporation stock options.
<TABLE>
<CAPTION>

                 Aggregated Option Exercises in Last Fiscal Year
                           and Fiscal Year-End Values

                                                                                                 Value of Unexercised
                                                              Number of Unexercised           In-the-Money Options at
                                 Shares                     Options at December 29, 2000          December 29, 2000 (1)
                                Acquired        Value       ----------------------------      ---------------------------
Name                           On Exercise     Realized     Exercisable      Unexercisable    Exercisable   Unexercisable
----                           -----------     --------     -----------      -------------    -----------   -------------

<S>                                      <C>         <C>          <C>               <C>                <C>             <C>
James D. Murphy                          0           $0           7,200             28,800             $0              $0
James W. Nelson                          0            0           1,500              6,000              0               0
Karen A. August                          0            0           1,500              6,000              0               0
Mario E. Soussou                         0            0           1,500              6,000              0               0
Gary S. Wade                             0            0           1,000              4,000              0               0
-----------------------
</TABLE>

(1)  Based on the difference  between the estimated  value on December 29, 2000,
     for the common stock and the option exercise price.

Employment Agreements

         Effective  August 9,  1999,  the  Company  entered  into an  Employment
Agreement (the  "Employment  Agreement")  with Mr. James D. Murphy,  to serve as
President and Chief Executive  Officer until December 31, 2003.  Pursuant to the
terms of the Employment  Agreement,  Mr. Murphy's benefits include,  among other
benefits,: (i) a base annual salary of $400,000, (ii) an annual cash bonus based
on the Company's  annual EBITDA  target (as defined  therein),  (iii) one year's
base salary upon  termination of Mr. Murphy by the Company  without cause,  (iv)
one year's base salary upon  termination  by Mr. Murphy of his  employment  with
good  reason,  except  that his base  salary due for the one year  period  after
termination  shall be reduced by the amount of his base  compensation in his new
employment,  and (v) one year's base  salary as  outlined  in (iv)  above,  upon
termination of Mr. Murphy by the Company  without cause upon a change in control
(as defined  therein) and provided that the return  hurdle (as defined  therein)
has not been  satisfied.  If the return hurdle has been  satisfied,  the Company
will have no obligation to pay the base salary to Mr. Murphy.

     On  March  3,  1995,  Sterile  Products  Holdings,   Inc.,  a  wholly-owned
subsidiary of the Company ("Holdings") and Sterile Products Corporation,  d.b.a.
Absorbent Cotton Company, Inc., a wholly-owned  subsidiary of Holdings ("ACCO"),
entered  into an  employment  agreement  with Mr.  C. C.  Van Noy (the  "Van Noy
Employment  Agreement").  Pursuant  to the  terms  of  the  Van  Noy  Employment
Agreement,  Mr. Van Noy served as the President of ACCO for two years and agreed
not to compete with Holdings or

                                       26

<PAGE>



ACCO or disclose  any  confidential  information  during the period in which the
Annual  Retirement  Payments (as hereinafter  defined) are being paid to him. In
exchange  for his  services and  agreements  not to compete or disclose  certain
information,  Mr. Van Noy, who has retired and no longer  performs  services for
the  Company,  is entitled to receive an annual  payment of $75,000 (the "Annual
Retirement  Payments") for a ten year period.  The Van Noy Employment  Agreement
provides that the Annual Retirement Payments shall be made to the beneficiary of
Mr. Van Noy upon his death, subject to certain adjustments.

         On December 8, 1997,  the Company  entered into  Employment  Protection
Agreements (the  "Protection  Agreements")  with each of Messrs.  Weathersby and
Kasvin (the "Executive").  The Protection  Agreement provides that, in the event
of a Change of Control (as defined therein),  the Company will pay the Executive
a lump sum in cash (the  "Change of Control  Payment")  equal to: (i) one year's
base salary (six months in the case of Mr.  Weathersby) and (ii) an amount equal
to 100% of Executive's  target bonus (50% in the case of Mr. Weathersby) for the
fiscal  year in which  the  Change  of  Control  occurs.  If,  after a Change of
Control,  Executive's  employment is terminated or is otherwise  materially  and
adversely affected, Executive will be entitled to an additional lump sum payment
equal  to the  Change  of  Control  Payment.  In  addition,  all  stock  options
previously  granted  to the  Executive,  whether  or not  vested,  shall  become
immediately  exercisable.  Executive  shall  have one  year  from  such  date to
exercise the options.  During  1999,  Mr.  Weathersby  and Mr.  Kasvin  received
payments aggregating $542,000 and $660,000, respectively, under their Employment
Protection  Agreements.  In addition,  Mr.  Weathersby  and Mr. Kasvin  received
payments aggregate $203,375 and $231,250, respectively, related to the April 30,
1999 redemption of the Predecessor's stock options.

         On July 15, 1998, the Company entered into a Letter  Agreement with Mr.
Kasvin,  in which the Company agreed to pay Mr. Kasvin  $300,000 on September 1,
1999 (above and beyond  salary and other  benefits  which he is receiving) if he
remained  employed  by the  Company  until that date (or was  terminated  by the
Company  without cause prior to that date).  Mr. Kasvin  remained on the payroll
until  September  30, 1999 and  received a payment of $300,000  under the Letter
Agreement.

         On November 9, 1998, the Company  entered into a Separation and Release
Agreement  (the  "Release  Agreement")  with Mr.  James  V.  Heim,  Senior  Vice
President  of  Consumer  and  Personal  Products.  Pursuant  to the terms of the
Release Agreement, Mr. Heim's employment with the Company ceased on November 30,
1998.  In  satisfaction  of all Mr.  Heim's  claims for  compensation,  Mr. Heim
received a lump sum payment from the Company of $322,500.  Mr. Heim may exercise
his stock options in the Company's stock until November 30, 1999. In furtherance
of the Employee Patent and Confidential  Information  Agreement  executed by Mr.
Heim on June 3, 1996, Mr. Heim agreed that he would keep secret all confidential
financial and proprietary matters of the Company and would not take with him any
documents  relating  to the  Company.  Mr.  Heim  received  a payment of $64,000
related to the April 30, 1999 redemption of the Predecessor's stock options.

     On  February 5, 1999,  the Company  entered  into a Letter  Agreement  with
Thomas H. Quinn.  Pursuant to the Letter Agreement,  Mr. Quinn's employment with
the Company will cease upon a change of control of the Company.  In  recognition
of his service and dedication to the Company, Mr. Quinn is entitled to receive a
lump sum payment,  upon consummation of a change of control, from the Company of
$374,000. Mr. Quinn received a payment of $374,000 under the Letter Agreement.


ITEM 12 - Security Ownership of Certain Beneficial Owners and Management

         As of December 29, 2000, there were 12,110,349  shares of the Company's
Common Stock  outstanding  which were owned 100% by the  Company's  parent,  RSA
Holdings  Corporation.  The  following  table sets forth as of December 29, 2000
certain  information with respect to the number of shares of common stock of RSA
Holdings Corporation  beneficially owned by (i) each director of the Company who
beneficially  owned common stock,  (ii) each executive officer of the Company as
of December 29, 2000,  named in the table under "Executive  Compensation"  under
Item 11 of this Report, who beneficially owned common stock, (iii) all directors
and executive  officers of the Company as a group and (iv) each person or entity
that  beneficially  owned (directly or together with affiliates) more than 5% of
the common stock.  The Company believes that each individual or entity named has
sole  investment  and  voting  power  with  respect  to shares  of common  stock
indicated as beneficially owned by them, except as otherwise noted.


                                       27

<PAGE>

<TABLE>
<CAPTION>


                                                                                                        Common
                                                                                                        Stock
                                                                        Beneficially                  Percentage
Name                                                                       Owned(1)                   Ownership(1)
----                                                                     -----------                  ------------


<S>            <C>                                                            <C>                          <C>
Directors and Executive Officers:
John W. Childs (2)                                                            45,320                        4.4%
Timothy J. Healy                                                               1,944                           *
Raymond B. Rudy                                                                2,500                           *
Adam L. Suttin (3)                                                             6,105                           *
James D. Murphy                                                               13,867                        1.4%
J. Andrew Bolt                                                                     0                           *
James W. Nelson                                                                3,722                           *
Karen A. August                                                                3,722                           *
Lawrence Friedman                                                              1,111                           *
Mario E. Soussou (4)                                                           6,500                           *
Gary R. Moorhead                                                                 578                           *
Paul W. Tonnesen                                                                 817                           *
Gary S. Wade                                                                   4,378                           *
All directors and executive officers as a group (13 persons)                  90,564                        8.8%

Other Principal Stockholders:
J.W. Childs Equity Partners II, L.P. (5)                                     904,097                       88.3%

</TABLE>
---------------------------
* Indicates beneficial ownership of less than 1% of shares of common stock.

(1)  Calculated  pursuant to Rule  13d-3(d) of the  Exchange  Act.  Under Rule
     13d-3(d), shares not outstanding which are subject to options,  warrants,
     rights or  conversion  privileges  exercisable  within 60 days are deemed
     outstanding  for the  purpose of  calculating  the number and  percentage
     owned by such  person,  but not  deemed  outstanding  for the  purpose of
     calculating the percentage owned by each other person listed.

(2)  Includes 556 shares of common  stock held by Richard  Childs and 556 shares
     of common stock held by James Childs for each of which Mr. Childs disclaims
     beneficial ownership.

(3)  Includes 276 shares of common stock held by the Suttin Irrevocable Family
     Trust,  599 shares of common stock held by the Suttin Family Trust II and
     2,281  shares of common  stock held by the Eugene  Suttin IRA for each of
     which Mr. Suttin disclaims beneficial ownership.

(4)  Includes 111 shares of common stock held by the  Isabelle  Soussou  Trust
     and 111 shares of common  stock held by the  Moriella  Soussou  Trust for
     each of which Mr. Soussou disclaims beneficial ownership.

(5)  Shares of common stock shown as  beneficially  owned by J.W.  Childs Equity
     Partners II, L.P. are owned by RSA  Holdings  Corporation,  which is wholly
     owned by J.W. Childs Equity Partners II, L.P. J.W. Childs Advisors II, L.P.
     is the sole general  partner of J.W.  Childs Equity  Partners II, L.P. J.W.
     Childs Associates, L.P. is the sole general partner of J.W. Childs Advisors
     II L.P. J. W. Childs  Associates,  Inc. is a  corporation,  the officers of
     which are Messrs. John W. Childs, Steven G. Segal, Adam L. Suttin, Glenn A.
     Hopkins, Dana L. Schmaltz, Edward D. Yun and Allan A. Dowds. Messrs. Childs
     and Suttin are  directors of the Company.  Each of Messrs.  Childs,  Segal,
     Suttin  and  Hopkins  may be deemed to share  beneficial  ownership  of the
     shares shown as beneficially owned by J. W. Childs Equity Partners II, L.P.
     Each of these  individuals  disclaims such  beneficial  ownership.  Messrs.
     Raymond B. Rudy and Timothy J. Healy are  directors  of the Company and are
     also Managing  Directors of J.W. Childs Associates,  L.P. Messrs.  Rudy and
     Healy  disclaim  that  they  are  the  beneficial   owners  of  any  shares
     beneficially  owned by J.W.  Childs  Equity  Partners II, L.P.  Each of the
     foregoing  has a business  address c/o J.W.  Childs  Equity  Partners,  One
     Federal Street, 21st Floor, Boston, MA 02110.



                                       28

<PAGE>



ITEM 13 - Certain Relationships and Related Transactions

     J.W.  Childs.   J.W.  Childs  owns   approximately   88%  of  RSA  Holdings
Corporation,  which  beneficially  owns 100% of the Company's  Common Stock. The
President of J.W. Childs is Mr. John W. Childs,  the Senior Managing Director is
Mr. Steven G. Segal and the other Managing  Directors are Messrs.  John V. Bock,
Jr., Glenn A. Hopkins, Jerry D. Horn, Timothy J. Healy, Raymond B. Rudy and Adam
L. Suttin.  Messrs. Childs, Healy, Rudy and Suttin are directors of the Company.
J.W.  Childs  assisted the Company in negotiating  the Acquisition and arranging
the financing  therefor,  and was paid a fee of $3.0 million and  reimbursed for
its expenses in connection  therewith,  which aggregated $0.2 million. From time
to time in the future, J.W. Childs may receive customary investment banking fees
for  services   rendered  to  the  Company  in  connection  with   divestitures,
acquisitions  and  certain  other  transactions.  In  addition,  pursuant  to  a
management  agreement  entered  into with the Company,  J.W.  Childs will render
management,  consulting and financial  services to the Company for an annual fee
of $240,000.  See  "Directors  and  Executive  Officers of the  Registrant"  and
"Security Ownership of Certain Beneficial Owners and Management."

         The Jordan  Company.  On July 12, 1995,  the Company and TJC Management
Corporation,  an  affiliate  of The Jordan  Company,  entered  into an  advisory
agreement (the "Advisory  Agreement").  The Advisory  Agreement provided for the
payment by the  Company  to TJC  Management  Corporation  of (a) up to 2% of the
aggregate   consideration  paid  by  the  Company  and/or  its  subsidiaries  in
connection with acquisitions or paid to the Company in connection with a sale of
the  Company  and/or its  subsidiaries  and (b) up to 1% of the amount  obtained
pursuant to any debt,  equity or other  refinancing.  In accordance with Company
policy,  the Advisory Agreement was (i) approved by a majority of the members of
the  Company's  Board and by a  majority  of the  disinterested  members  of the
Company's  Board and (ii) deemed by the  Company's  Board to be subject to terms
and  conditions  no less  favorable to the Company  than could be obtained  from
unaffiliated third parties.

         Pursuant to the terms of the Advisory  Agreement,  on May 28, 1997, the
Company  paid  to  TJC  Management  Corporation  $196,000  as  compensation  for
providing   investment  banking  and  other  consulting   services  rendered  in
connection with the acquisition by a subsidiary of the Company of certain assets
of AWC.  Messrs.  Jordan,  Zalaznick,  Boucher and Lowden were  directors of the
Predecessor and are partners of The Jordan Company.

         On  February  12,  1999,  the Company  and TJC  Management  Corporation
amended and restated the Advisory Agreement (the "Amended Advisory  Agreement").
The  Company's  Board  unanimously  approved  the  Amended  Advisory  Agreement.
Pursuant  to the Amended  Advisory  Agreement,  the  Company and TJC  Management
Corporation  agreed upon a flat $2,500,000 fee for financial  advisory  services
which was paid at closing of the Stock Tender Offer. The financial  advisory fee
in the Amended Advisory Agreement represents a reduction from the base fee of up
to 2% which would  otherwise have been paid in connection  with the Stock Tender
Offer. In accordance with Company policy, the Amended Advisory Agreement was (i)
approved by a majority of the members of the  Company's  Board and a majority of
the  disinterested  members  of the  Company's  Board  and  (ii)  deemed  by the
Company's  Board to be subject to terms and  conditions no less favorable to the
Company than could be obtained from unaffiliated third parties.

         During the fiscal year 1999,  the Company paid to The Jordan Company an
aggregate of $15,000 as compensation for Messrs. Jordan, Zalaznick,  Boucher and
Lowden serving as members of the Company's Board prior to the Acquisition.

         Indemnification  Agreements.  The  Company is party to  indemnification
agreements  with each of the past  members of the  Company's  Board  pursuant to
which the Company has agreed to indemnify  and hold  harmless each director from
liabilities  incurred as a result of such director's status as a director of the
Company, subject to certain limitations.


                                       29

<PAGE>



                                     PART IV

Item 14.  Exhibits, Financial Statement Schedule and Reports on Form 8-K.

(a) (1), (2) and (3)--The  response to this portion of Item 14 is submitted as a
separate section of this Report starting on page 32.

(b)  Reports on Form 8-K filed in the fourth quarter of 2000.

     None

(c) Exhibits--The response to this portion of Item 14 is submitted as a separate
section of this Report starting on page 73.

(d)  Financial  Statement  Schedule--The  response to this portion of Item 14 is
     submitted as a separate section of this Report on page 72.



                                       30

<PAGE>



                                   Signatures

Pursuant to the  requirements of Section 13 or 15(d) 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,  as of the 28th day of
March 2001.

                                AMERICAN SAFETY RAZOR COMPANY



                                /s/James D. Murphy
                                -----------------------------------------------
                                James D. Murphy
                                Director, President and Chief Executive Officer

                                Power of Attorney

Each person whose signature appears below hereby  constitutes and appoints James
D.  Murphy  and  Adam  L.  Suttin,  and  each  of  them,  the  true  and  lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution,  for and in the name, place and stead of the undersigned and
to file the same, with all exhibits  thereto,  in any and all  capabilities,  to
sign any and all amendments  (including  post-effective  exhibits  thereto,  and
other  documents  in  connection  therewith)  with the  Securities  and Exchange
Commission,  and hereby grants to such attorneys-in-fact and agents, and each of
them,  full power and  authority  to do and perform each and every act and thing
requisite  and necessary to be done, as fully to all intents and purposes as the
undersigned  might or could do in person,  hereby  ratifying and  confirming all
that  said  attorneys-in-fact  and  agents,  or any of  them,  or  their  or his
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  persons on behalf of the Registrant and
in the capacities as of the 28th day of March 2001.


        Signature                      Title
        ---------                      -----


/s/James D. Murphy             Director, President and
--------------------------       Chief Executive Officer
        James D. Murphy


/s/J. Andrew Bolt              Senior Vice President
--------------------------       Chief Financial Officer (Principal Financial
        J. Andrew Bolt           Officer and Principal Accounting Officer)

/s/Adam L. Suttin              Director, Vice President and Assistant Secretary
--------------------------
        Adam L. Suttin


/s/John W. Childs              Director
--------------------------
        John W. Childs


/s/Timothy J. Healy            Director
--------------------------
        Timothy J. Healy


/s/Raymond B. Rudy              Director, Non-Executive Chairman
--------------------------
        Raymond B. Rudy


                                       31

<PAGE>




                           ANNUAL REPORT ON FORM 10-K

                   ITEM 8, ITEM 14(a)(1) and (2), (c) and (d)

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

                                CERTAIN EXHIBITS

                          FINANCIAL STATEMENT SCHEDULE

                          YEAR ENDED DECEMBER 29, 2000

                          AMERICAN SAFETY RAZOR COMPANY

                            CEDAR KNOLLS, NEW JERSEY


                                       32

<PAGE>



FORM 10-K--ITEM 14(a)(1) AND (2)

American Safety Razor Company

List of Financial Statements and Financial Statement Schedule

The following consolidated financial statements of American Safety Razor Company
are included in Item 8:

        Consolidated Balance Sheets--December 29, 2000 and December 31, 1999

        Consolidated  Statements of Operations--For  the year ended December 29,
        2000,  for the period  from April 24,  1999 to  December  31,  1999 (the
        Company), for the period from January 1, 1999 to April 23, 1999, and for
        the year ended December 31, 1998 (Predecessor)

        Consolidated  Statements  of  Comprehensive  Income--For  the year ended
        December  29,  2000,  for the period from April 24, 1999 to December 31,
        1999 (the  Company),  for the period  from  January 1, 1999 to April 23,
        1999, and for the year ended December 31, 1998 (Predecessor)

        Consolidated  Statements of Cash  Flows--For the year ended December 29,
        2000,  for the period  from April 24,  1999 to  December  31,  1999 (the
        Company), for the period from January 1, 1999 to April 23, 1999, and for
        the year ended December 31, 1998 (Predecessor)

        Notes to Consolidated Financial Statements--December 29, 2000

        Report of Independent Accountants

The following consolidated financial statement schedule of American Safety Razor
Company is included in Item 14(d):

        Schedule II        Valuation and Qualifying Accounts

All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.


                                       33

<PAGE>



AMERICAN SAFETY RAZOR COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
                                                                                                         Company
                                                                                               ----------------------------
                                                                                               December 29,    December 31,
                                                                                                  2000           1999
                                                                                               ------------    ------------

<S>                                                                                              <C>             <C>
Assets
Current assets:
    Cash and cash equivalents                                                                     $  2,142        $ 12,500
    Accounts receivable, less allowances of $3,415 in 2000, and $4,213 in 1999                      51,697          46,252
    Inventories                                                                                     61,628          54,404
    Deferred income taxes                                                                            5,394           6,814
    Prepaid expenses                                                                                   970           1,882
                                                                                                  --------        --------

Total current assets                                                                               121,831         121,852

Property and equipment, net                                                                         91,814          89,991

Intangible assets, net:
    Goodwill, trademarks, patents and licenses                                                     156,814         159,675
    Other                                                                                            5,292           6,826
                                                                                                  --------        --------
                                                                                                   162,106         166,501

Prepaid pension cost and other                                                                      13,835          24,527
                                                                                                  --------        --------
Total assets                                                                                      $389,586        $402,871
                                                                                                  ========        ========

Liabilities and stockholder's equity Current liabilities:
    Accounts payable                                                                              $ 15,217        $ 13,711
    Accrued expenses                                                                                12,281          13,607
    Payroll and related liabilities                                                                  4,673           6,045
    Accrued interest                                                                                 3,342           3,294
    Income taxes payable                                                                             2,931             185
    Current maturities of long-term obligations                                                     11,925          10,508
                                                                                                  --------        --------

Total current liabilities                                                                           50,369          47,350

Long-term obligations                                                                              179,098         175,108
Retiree health and insurance benefits                                                               26,916          26,025
Pension and other liabilities                                                                        1,188           1,308
Deferred income taxes                                                                               18,155          24,078
                                                                                                  --------        --------

Total liabilities                                                                                  275,726         273,869
                                                                                                  --------        --------

Contingent liabilities and commitments

Stockholder's equity:
    Common stock, $.01 par value, 25,000,000 shares authorized;
        12,110,349 shares issued and outstanding in 2000 and 1999                                      121             121
    Additional paid-in capital                                                                     172,843         172,843
    Advances to RSA Holdings Corporation, net                                                      (52,061)        (42,714)
    Accumulated deficit                                                                             (6,466)         (1,258)
    Accumulated other comprehensive (loss) income                                                     (577)             10
                                                                                                  --------        --------
                                                                                                   113,860         129,002
Total liabilities and stockholder's equity                                                        $389,586        $402,871
                                                                                                  ========        ========

See accompanying notes.

</TABLE>
                                       34

<PAGE>



AMERICAN SAFETY RAZOR COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>


                                                                                   Company                  Predecessor
                                                                           ----------------------   -----------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


<S>                                                                         <C>         <C>           <C>          <C>
Net sales                                                                   $318,813    $227,159      $87,591      $297,488
Cost of sales:
    Cost of sales                                                            212,112     146,488       58,520       201,978
    Purchase accounting adjustment to inventory                                    -       9,008            -             -
                                                                            --------    --------      -------      --------

Gross profit                                                                 106,701      71,663       29,071        95,510

Selling, general and administrative expenses                                  72,948      52,567       21,429        63,516
Amortization of intangible assets                                              4,569       3,178          835         2,543
Special charges                                                                    -           -            -         3,003
Transaction expenses                                                               -           -       11,440             -
Special termination benefits                                                  14,351           -            -             -
                                                                            --------    --------      -------      --------

Operating income (loss)                                                       14,833      15,918       (4,633)       26,448
Interest expense                                                              19,842      15,112        3,907        12,270
                                                                            --------    --------      -------      --------

(Loss) income before income taxes and extraordinary item                      (5,009)        806       (8,540)       14,178
Income taxes (benefit)                                                           199       1,453         (842)        4,076
                                                                            --------    --------      -------      --------

(Loss) income before extraordinary item                                       (5,208)       (647)      (7,698)       10,102
Extraordinary item, net of income tax benefit                                      -        (611)        (118)            -
                                                                            --------    --------      -------      --------
Net (loss) income                                                           $ (5,208)   $ (1,258)     $(7,816)     $ 10,102
                                                                            ========    ========      =======      ========

Basic earnings per share:
    (Loss) income before extraordinary item                                   $(0.43)     $(0.05)      $(0.64)        $0.83
    Extraordinary item                                                             -       (0.05)       (0.01)            -
                                                                              ------      ------       ------         -----
    Net (loss) income                                                         $(0.43)     $(0.10)      $(0.65)        $0.83
                                                                              ======      ======       ======         =====

    Weighted average number of shares outstanding                             12,110      12,110       12,110        12,107
                                                                              ======      ======       ======        ======

Diluted earnings per share:
    (Loss) income before extraordinary item                                   $(0.43)     $(0.05)      $(0.64)        $0.83
    Extraordinary item                                                             -       (0.05)       (0.01)            -
                                                                              ------      ------       ------         -----
    Net (loss) income                                                         $(0.43)     $(0.10)      $(0.65)        $0.83
                                                                              ======      ======       ======         =====

    Weighted average number of shares outstanding                             12,110      12,110       12,198        12,223
                                                                              ======      ======       ======        ======

</TABLE>




See accompanying notes.


                                       35

<PAGE>



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
<TABLE>
<CAPTION>

                                                                                  Company                   Predecessor
                                                                           ------------------------ -----------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


<S>                                                                          <C>         <C>          <C>          <C>
Net (loss) income                                                            $(5,208)    $(1,258)     $(7,816)     $10,102
Other comprehensive (loss) income:
    Foreign currency translation adjustments                                    (587)         10         (116)         (91)
                                                                             -------     -------      -------      -------
Comprehensive (loss) income                                                  $(5,795)    $(1,248)     $(7,932)     $10,011
                                                                             =======     =======      =======      =======

</TABLE>


See accompanying notes.

                                       36

<PAGE>



AMERICAN SAFETY RAZOR COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
                                                                                  Company                   Predecessor
                                                                           ------------------------ -----------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


<S>                                                                          <C>         <C>          <C>          <C>
Operating activities
Net (loss) income                                                            $(5,208)    $(1,258)     $(7,816)     $10,102
Adjustments to reconcile net (loss) income to net cash
    provided by (used in) operating activities:
        Extraordinary item                                                         -         611          118            -
        Special termination benefits                                          14,351           -            -            -
        Depreciation                                                          13,577       8,319        3,270        9,634
        Amortization                                                           4,569       3,178          835        2,543
        Interest and financing costs                                           1,468       3,264          180          553
        Deferred income taxes                                                 (4,503)     (1,980)         232         (381)
        Retiree health and insurance benefits                                    831         926          224          836
        Pension and other                                                     (4,306)     (2,062)        (943)      (2,126)
        Changes in operating assets and liabilities
        net of effects of acquisitions:
            Accounts receivable                                               (5,445)     (9,464)       7,710        1,186
            Inventories                                                       (7,224)     15,111       (7,748)      (2,186)
            Income taxes receivable                                                -       3,667       (2,252)         (93)
            Prepaid expenses                                                     912          84          205         (927)
            Accounts payable                                                   1,506      (2,153)       1,723       (1,671)
            Accrued and other expenses                                        (3,900)        835       (1,072)      (1,328)
            Income taxes payable                                               2,746         185            -       (3,601)
                                                                             -------     -------      -------      -------

Net cash provided by (used in) operating activities                            9,374      19,263       (5,334)      12,541
                                                                             -------     -------      -------      -------

Investing activities
Capital expenditures                                                         (15,400)     (8,430)      (3,638)     (11,375)
Acquisitions, net of cash acquired                                                 -           -            -         (571)
Other, net                                                                      (237)        (29)          49         (663)
                                                                             -------     -------      -------      -------

Net cash used in investing activities                                        (15,637)     (8,459)      (3,589)     (12,609)
                                                                             -------     -------      -------      -------

Financing activities
Repayment of long-term obligations                                           (34,017)    (32,906)     (21,909)      (1,397)
Proceeds from borrowings                                                      39,349      51,294       61,400        3,380
Deferred loan fees                                                               (80)       (395)      (7,606)           -
Proceeds from exercise of stock options                                            -            -           2          104
Advances to RSA Holdings Corporation, net                                     (9,347)    (18,559)     (24,155)           -
                                                                             -------     -------      -------      -------

Net cash (used in) provided from financing activities                         (4,095)       (566)       7,732        2,087
                                                                             -------     -------      -------      -------

Net (decrease) increase in cash and cash equivalents                         (10,358)     10,238       (1,191)       2,019
Cash and cash equivalents, beginning of period                                12,500       2,262        3,453        1,434
                                                                             -------     -------      -------      -------
Cash and cash equivalents, end of period                                     $ 2,142     $12,500      $ 2,262      $ 3,453
                                                                             =======     =======      =======      =======

See accompanying notes.
</TABLE>

                                       37

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. MERGER

Effective  April 23, 1999,  RSA  Acquisition  Corporation,  an affiliate of J.W.
Childs Equity Partners II, L.P. ("J.W. Childs"),  completed its $14.20 per share
cash tender offer for all  outstanding  shares of American  Safety Razor Company
(the "Predecessor") in accordance with a February 12, 1999 merger agreement,  as
amended on April 8, 1999, (the  "Acquisition") upon the terms and subject to the
conditions  set forth in the  offer to  purchase  (the  "Stock  Tender  Offer").
Following  completion of the Stock Tender Offer,  there  remained  approximately
266,601 American Safety Razor Company shares  outstanding.  On July 1, 1999, RSA
Acquisition  Corporation  and American  Safety Razor Company  completed a merger
transaction  (the  "Merger")  pursuant  to  which  RSA  Acquisition  Corporation
acquired  the  remaining  shares of the  Predecessor  for $14.20 per share.  The
aggregate purchase price,  including transaction costs of $1.0 million, paid for
the common stock  purchased in the Stock Tender Offer was  approximately  $173.0
million.

Following the Merger,  American Safety Razor Company and its  subsidiaries  (the
"Company")  became  the  surviving  corporation  and is a  direct,  wholly-owned
subsidiary of RSA Holdings  Corporation,  which is wholly-owned by J.W.  Childs,
its affiliates and Company management.

Subsequent to the  Acquisition  and pursuant to the terms of its Indenture,  the
Company made an offer to purchase all of its $100 million 9 7/8% Series B Senior
Notes due August 1, 2005 (the "Senior Notes"). In response thereto in June 1999,
$30.7  million of the Senior  Notes were  validly  tendered  and  retired by the
Company.

The Company has accounted for the  Acquisition as a purchase.  The allocation of
the purchase price resulted in purchase  adjustments being applied to the assets
acquired and  liabilities  assumed.  The total purchase  price of  approximately
$172,964,000 was allocated to the acquired assets and assumed  liabilities based
on their respective fair values at April 23, 1999 as follows:

         Working capital                                 $ 76,555,000
         Property, plant and equipment                     89,880,000
         Intangible assets, including goodwill            173,496,000
         Prepaid pension and other assets                  46,827,000
         Long-term debt                                  (163,685,000)
         Other liabilities                                (50,109,000)
                                                         ------------
                                                         $172,964,000
                                                         ============


As a result  of the  Acquisition  and new  basis of  accounting,  the  Company's
financial  statements  for the year ended  December 29, 2000, and for the period
from April 24, 1999 to December 31, 1999 are not comparable to the Predecessor's
financial  statements  for the period from January 1, 1999 to April 23, 1999 and
for the year ended December 31, 1998. As a result of the application of purchase
accounting the Company's  depreciation  expense and  amortization  of intangible
assets  increased  and the  Company  adjusted  the  carrying  value of  acquired
inventories to reflect their  estimated fair market value,  which  adjustment of
$9,008,000  increased  cost of sales in the April 24, 1999 to December  31, 1999
reporting  period.  In addition,  certain fees and expenses incurred relating to
the above transactions aggregating $11,440,000 were expensed and are included in
the   Predecessor's   consolidated   statement  of  operations  in  the  caption
"Transaction expenses".

The primary components of the 1999 Transaction  expenses are (i) amounts paid to
redeem  all  of  the  outstanding  options  to  purchase  common  stock  of  the
Predecessor,  (ii)  costs  incurred  by or  on  behalf  of  the  Predecessor  in
connection  with the  Acquisition,  including legal and other advisory fees, and
(iii) costs incurred by or on behalf of the Predecessor related to payments made
to  certain  employees  of the  Predecessor  in  connection  with the  change of
control.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company
The Company is a leading  manufacturer of  high-quality  private label and value
brand consumer  products.  The Company's  principal products consist of consumer
shaving razors and blades,  blades and bladed hand tools,  specialty  industrial
and  medical  blades,  cotton  and foot  care  products,  and  custom  bar soaps
principally sold to the retail and professional  trades in the United States and
in selected international markets.


                                       38

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Basis of Presentation
The  consolidated  financial  statements  have been prepared in accordance  with
generally  accepted  accounting  principles  which  require  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of contingent  assets and liabilities at the dates of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the  reporting  periods.  Accordingly,  actual  results could differ from
those estimates.

Effective January 1, 2000, the Company changed its calendar year ending December
31 to a 52-53 week fiscal year ending on the Friday  closest to December 31. The
change in fiscal year did not have a material effect on the Company's  financial
position,  results of operations  or cash flows for the year ended  December 29,
2000.

Principles of Consolidation
The consolidated  financial  statements  include the accounts of American Safety
Razor  Company  and  its  subsidiaries,  all of  which  are  wholly  owned.  The
consolidated  financial  statements  also include the accounts of Wolco  Holland
B.V.  ("Wolco") since its acquisition  date on September 18, 1998 (See Note 13).
All significant  intercompany  accounts and transactions have been eliminated in
consolidation.

Revenue Recognition
Sales and related cost of sales  (including  shipping costs) are recognized upon
shipment of products or delivery of products to  customers  based upon  shipping
terms and passage of title of products to customers.

Inventories
Inventories  are stated at the lower of cost or market.  In connection  with the
Acquisition,  in 1999 the Company's new owners  adopted the first-in,  first-out
("FIFO")  method of valuation of inventories for financial  reporting  purposes.
Cost for approximately 59 percent of inventories for 1998 were determined by the
Predecessor using the last-in,  first-out ("LIFO") method.  Cost for 1998 of the
remaining inventories, operating supplies and inventories of foreign and certain
domestic subsidiaries, were determined by the FIFO method.

Long-Lived Assets
Property  and  equipment  are  stated  on the  basis of cost.  Expenditures  for
renewals and  betterments  are  capitalized,  and  expenditures  for repairs and
maintenance   are  expensed  as  incurred.   Depreciation  is  computed  by  the
straight-line  method over the  estimated  useful  lives of the related  assets,
which are as follows:

                 Land improvements                          4-20 years
                 Buildings and improvements                10-40 years
                 Machinery and equipment                    2-15 years

Intangible  assets are stated on the basis of cost.  Goodwill and trademarks are
being amortized on a straight-line  basis over a forty-year period.  Patents are
being amortized on a straight-line  basis over a fifteen-year  period.  Licenses
are being amortized on a straight-line  basis over the weighted  average life of
the patents of fourteen years. The Company  periodically  reviews its long-lived
assets  to  assess   recoverability  or  impairment  based  on  expectations  of
undiscounted  cash flows and the assets'  carrying  amount.  Any  impairment  in
carrying value would be recognized in operating  results if a permanent  decline
in value were to occur.  Noncompete  agreements  are being  amortized  using the
straight-line  method over the terms of the related  agreements.  Deferred  loan
costs are being amortized  using the effective  interest method over the term of
the related long-term obligations.

Advertising Expenses
Advertising  costs are expensed  when  incurred and  approximated  $1,028,000 in
2000, $997,000 for the period from April 24, 1999 to December 31, 1999, $259,000
for the period from January 1, 1999 to April 23, 1999 and $912,000 in 1998.

Foreign Currency Translation
The accounts of the Company's foreign  subsidiaries are generally measured using
local currency as the functional currency.  Accordingly,  assets and liabilities
are translated into U.S.  dollars at period-end  exchange rates,  and income and
expense are translated at average monthly  exchange rates. Net exchange gains or
losses  resulting  from such  translations  are  excluded  from net earnings and
accumulated as a separate component of accumulated other comprehensive income or
loss. The Company does not provide income taxes on such gains and losses because
the earnings of foreign subsidiaries are permanently invested.  Gains and losses
from foreign currency  transactions are included in earnings and currency losses
approximated $1,364,000 in 2000, $1,160,000 for the period from

                                       39

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


April 24, 1999 to December  31,  1999,  $129,000  for the period from January 1,
1999 to April 23, 1999 and  $778,000 for the year ended  December 31, 1998.  The
effect of exchange rate changes on cash is not material.

Financial Instruments
The Company's financial instruments include cash and cash equivalents,  accounts
receivable,  accounts payable,  debt  obligations,  foreign currency options and
interest  rate cap and swap  agreements.  Because of their short  maturity,  the
carrying amount of cash and cash equivalents,  accounts  receivable and accounts
payable  approximates  fair value.  Fair value of debt  obligations  is based on
quoted  market prices for the same or similar  issues or discounted  cash flows.
Fair value of foreign currency  options are based on quoted market prices.  Fair
value of  interest  rate cap and swap  agreements  are based on  dealer  quotes,
considering current interest rates.

The Company  periodically  hedges certain foreign currency exposures through the
use of foreign currency forward contracts and foreign currency options.  Certain
of these contracts,  although intended and economically  effective as a hedge of
certain of the Company's  foreign currency  exposures,  do not qualify for hedge
accounting.  Gains  and  losses on  contracts  qualifying  for hedge  accounting
treatment are deferred and offset  against  foreign  exchange gains or losses on
the  underlying  transaction.  Gains and losses on contracts not  qualifying for
hedge  accounting  treatment are included in current  income.  Premiums paid are
amortized on a straight-line basis over the term of the related contract.

The Company also  periodically  hedges  exposure to  fluctuating  interest rates
through  the use of interest  rate cap and swap  agreements.  As interest  rates
change,  the differential  paid or received is recognized in interest expense of
the period.

Concentration of Credit Risk
Financial  instruments that potentially  subject the Company to concentration of
credit  risk  consist  primarily  of cash  and  cash  equivalents  and  accounts
receivable.  The Company  restricts its cash and cash  equivalents  to financial
institutions with high credit ratings and credit risk on accounts  receivable is
minimized  due  to  the  diverse  geographic  areas  covered  by  the  Company's
operations and its diverse customer base.

Earnings Per Share
Basic earnings per share excludes any dilutive effects of options,  warrants and
convertible securities. Diluted earnings per share includes the dilutive effects
of options,  warrants and  convertible  securities.  The difference  between the
weighted  average number of shares  outstanding for computing basic earnings per
share and diluted  earnings per share is related to the  Predecessor's  employee
stock  options  outstanding  which were assumed to be converted  for the diluted
earnings  per  share   calculation   when  the  average   market  price  of  the
Predecessor's  common stock for the period  exceeded  the exercise  price of the
employee stock options which were outstanding.

Statement of Cash Flows
The Company  considers  all highly liquid  investments  with a maturity of three
months or less at the time of purchase to be cash equivalents.  The Company paid
income taxes of $1,735,000 in 2000,  $582,000 for the period from April 24, 1999
to December 31, 1999 and the  Predecessor  paid income taxes of $806,000 for the
period  from  January  1, 1999 to April 23,  1999 and  $9,994,000  in 1998.  The
Company paid interest of  $18,618,000 in 2000,  $11,174,000  for the period from
April 24,  1999 to  December  31,  1999 and the  Predecessor  paid  interest  of
$5,564,000 for the period from January 1, 1999 to April 23, 1999 and $11,802,000
in 1998.

Supplemental  non-cash  investing and financing  activities  related to the 1998
Wolco acquisition consist of (in thousands):

      Fair value of assets acquired, net of cash           $2,626
      Liabilities assumed                                    (877)
      Seller financing                                     (1,178)
                                                           ------
      Cash paid                                            $ (571)
                                                           ======

Liabilities assumed include acquired debt of $506,000.

Stock Options
The Predecessor followed Accounting Principles Board Opinion No. 25, "Accounting
for  Stock  Issued to  Employees"  ("APB  25") and  related  interpretations  in
accounting for its employee  stock  options.  Under APB 25, because the exercise
price of the  Predecessor's  employee stock options  equaled the market price of
the  underlying  stock  on the  date  of  grant,  no  compensation  expense  was
recognized.  The Predecessor  provides  additional pro forma  disclosures of the
fair-value based method in accordance with Statement of Financial

                                       40

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Accounting  Standards No. 123,  "Accounting for Stock-Based  Compensation"  (See
Note 10).

Income Taxes
Income taxes are determined based on FAS No. 109, "Accounting for Income Taxes."
Deferred tax  liabilities  and assets are recognized for the expected future tax
consequences  of events that have been included in the  financial  statements or
tax  returns.  Deferred  tax  liabilities  and  assets are  determined  based on
differences between financial statement carrying amounts and tax bases of assets
and  liabilities  using  enacted  tax  rates in effect in the years in which the
differences are expected to reverse.

Segment Reporting The Company provides segment  disclosures  pursuant to FAS No.
131,  "Disclosures About Segments of an Enterprise and Related Information" (See
Note 11).

New Accounting Standards
In June 1998,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging  Activities" ("FAS 133"). FAS 133 establishes  standards
for accounting and disclosure of derivative  instruments.  This new standard, as
amended by FAS 137 and FAS 138, is effective for fiscal quarters of fiscal years
beginning  after June 15,  2000.  The Company  was  required to adopt FAS 133 on
December 30, 2000.  The Company's use of  derivative  instruments  is limited to
interest  rate  cap and  swap  agreements  and  foreign  currency  options.  The
implementation  of this new  standard  did not  have a  material  effect  on the
Company's results of operations or financial position.

In March 2000,  the FASB  issued FASB  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation",  an interpretation of APB
Opinion No. 25,  "Accounting for Stock Issued to Employees." The  Interpretation
clarifies  guidance  for  certain  issues that arose in the  application  of APB
Opinion No. 25. The Company adopted the  Interpretation  on July 1, 2000,  which
did not have any effect on the  Company's  results of  operations  or  financial
position.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial  Statements".  SAB No.
101 provides  additional guidance relating to revenue  recognition.  The Company
adopted SAB No. 101, as amended by SAB No. 101A and SAB No. 101B,  in the fourth
quarter of 2000 and  concluded  that its revenue  recognition  policies  were in
compliance with SAB No. 101.

In May 2000,  the Emerging  Issues Task Force  ("EITF")  issued EITF No.  00-14,
"Accounting  for  Certain  Sales  Incentives".  EITF  No.  00-14  addresses  the
recognition,  measurement,  and income statement classification of various sales
incentives including discounts, coupons, rebates, and free products or services.
EITF No.  00-14  requires a vendor to  recognize  discounts,  coupons and rebate
obligations as a reduction of revenue. The Company has historically followed the
practice of recording  the cost of  discounts,  coupons and rebates as a selling
expense.  The Company is required to adopt EITF No. 00-14 in the second  quarter
of 2001. At the time of adoption, the Company will reclassify prior quarters and
prior  year  financial  statements  to  conform  to  the  new  income  statement
classification.  As  the  Company  believes  its  current  accounting  practices
relative to the timing and method of recognizing  such costs is consistent  with
the consensus it is not expected  that the adoption of the  consensus  will have
any impact on the Company's  financial  position or results of  operations.  The
Company is in the process of determining the amounts to be reclassified.

In January  2001,  the EITF reached a consensus  on one of the issues  currently
under  consideration  within EITF Issue No.  00-22,  "Accounting  for Points and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free  Products  or Services  to be  Delivered  in the  Future".  This  consensus
requires a vendor to recognize a rebate or refund  obligation  as a reduction of
revenue based on a systematic  and rational  allocation of the costs of honoring
rebates or refunds earned. The Company has historically followed the practice of
recording the cost of such items as a selling  expense.  The Company is required
to adopt the  consensus in the first  quarter of 2001.  At the time of adoption,
the Company will reclassify  prior quarters and prior year financial  statements
to conform to the new income statement  classification.  As the Company believes
its  current  accounting   practices  relative  to  the  timing  and  method  of
recognizing  such costs is consistent with the consensus it is not expected that
the adoption of the consensus  will have any impact on the  Company's  financial
position or results of operations.  The Company is in the process of determining
the amounts to be reclassified.


                                       41

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



3. INVENTORIES

     Inventories consisted of:
                                                               Company
                                                      ------------------------
                                                       December       December
                                                      29, 2000       31, 1999
                                                      ---------      ---------
                                                           (In thousands)

     Raw materials                                      $29,240        $27,928
     Work in process                                      5,110          4,521
     Finished goods                                      22,810         18,098
     Operating supplies                                   4,468          3,857
                                                        -------        -------
                                                        $61,628        $54,404
                                                        =======        =======

4. PROPERTY AND EQUIPMENT

     Property and equipment consisted of:
                                                               Company
                                                      ------------------------
                                                       December       December
                                                      29, 2000       31, 1999
                                                      ---------      ---------
                                                           (In thousands)

     Land and land improvements                        $ 3,975        $ 3,928
     Buildings and improvements                          7,319          7,107
     Machinery and equipment                            92,556         82,728
     Construction in progress                            9,888          4,635
                                                       -------        -------
                                                       113,738         98,398
     Less accumulated depreciation                     (21,924)        (8,407)
                                                       -------        -------
                                                       $91,814        $89,991
                                                       =======        =======


5. INTANGIBLE ASSETS

     Intangible assets consisted of:
                                                               Company
                                                      ------------------------
                                                       December       December
                                                      29, 2000       31, 1999
                                                      ----------     ---------
                                                           (In thousands)

     Goodwill                                         $149,414       $149,414
     Trademarks                                          6,624          6,624
     Patents and licenses                                8,057          6,570
     Noncompete agreements                                 689            689
     Deferred loan costs and other                       9,648          9,568
                                                      --------       --------
                                                       174,432        172,865
     Less accumulated amortization                     (12,326)        (6,364)
                                                      --------       --------
                                                      $162,106       $166,501
                                                      ========       ========


                                       42

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6. LONG-TERM OBLIGATIONS

     Long-term obligations consist of the following:
<TABLE>
<CAPTION>
                                                                                                            Company
                                                                                                   -------------------------
                                                                                                   December       December
                                                                                                   29, 2000       31, 1999
                                                                                                   ---------      ---------
                                                                                                        (In thousands)

<S>                          <C>                                                                    <C>            <C>
     Term loans, due January 2005                                                                   $104,875       $112,500

     Revolving loans, due January 2005                                                                15,900              -

     9 7/8% Series B Senior Notes, due August 2005                                                    69,300         69,300

     9% subordinated note                                                                                  -          1,250

     Other:
       3% Virginia Small Business Financing Authority Note, due March 30, 2002                           779          1,118
       Other obligations                                                                                 169          1,448
                                                                                                    --------       --------
                                                                                                     191,023        185,616
     Less current maturities                                                                          11,925         10,508
                                                                                                    --------       --------
                                                                                                    $179,098       $175,108
                                                                                                    ========       ========
</TABLE>

On April 23, 1999 and concurrent with the  Acquisition  described in Note 1, the
Company entered into a $190,000,000  credit agreement (the "Credit  Agreement"),
which provided for term loan commitments in the aggregate amount of $165,000,000
(the "Term  Loan  Facility")  and a  revolving  credit  facility  commitment  of
$25,000,000,   and  terminated  its  existing  revolving  credit  facility  (the
"Terminated  Credit  Facility").  Borrowings  under  the Term Loan  Facility  of
$88,000,000 and borrowings under the revolving credit facility of $5,000,000 and
internally  generated funds of $1,986,000 were used to purchase $30,700,000 face
value of the  Company's  Senior Notes which were validly  tendered (see Note 1),
pay expenses and accrued interest of $1,402,000  incurred in connection with the
purchase  of the Senior  Notes,  pay the  outstanding  balances  of  $18,811,000
including   accrued  interest  on  the  Terminated  Credit  Facility  and  other
short-term debt, pay fees and expenses of $19,918,000 related to the acquisition
and  financing  and  advance  funds  totaling  $24,155,000  to  RSA  Acquisition
Corporation to fund a portion of the Acquisition described in Note 1.

In  connection  with the purchase of the Senior Notes in June 1999,  the Company
paid a premium over par and wrote-off  deferred financing costs in the aggregate
gross  amount of  $969,000.  These  expenses,  net of the related tax benefit of
$358,000, are reflected in the Company's consolidated statement of operations in
the caption  "Extraordinary item" for the period from April 24, 1999 to December
31, 1999.

In  addition,  the  Predecessor  wrote-off  deferred  financing  costs,  in  the
aggregate  gross amount of $186,000 in connection  with the  termination  of the
Terminated  Credit Facility.  These expenses,  net of the related tax benefit of
$68,000, are reflected in the Predecessor's consolidated statement of operations
in the caption "Extraordinary item" for the period from January 1, 1999 to April
23, 1999.

Effective July 5, 1999, the Company permanently reduced the amount available for
future  borrowings  under  its Term Loan  Facility  by $52.5  million  to $112.5
million which  represented the amount of borrowings  outstanding  under the Term
Loan Facility at December 31, 1999. In connection with the reduction in the Term
Loan Facility,  the Company wrote off deferred  financing costs in the aggregate
amount of $2,103,000. These expenses are reflected in the Company's consolidated
statement of operations in the caption,  "Interest  expense" for the period from
April 24, 1999 to December 31, 1999.

The Term Loan Facility expires on January 31, 2005 and principal  payments under
this  facility  began on  January  31,  2000 and  continue  quarterly  until the
expiration  date.  Principal  payments  are based on a  percentage  of principal
balance  outstanding  on the  respective  payment  date as defined in the Credit
Agreement.  The revolving  credit  facility also expires on January 31, 2005 and
borrowings under this facility are required to be repaid by the expiration date.
Interest is based on the bank's prime rate or the London Interbank  Offered Rate
plus a margin as defined in the Credit Agreement. The weighted-average  interest
rate on the Company's outstanding revolving

                                       43

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


loans was approximately 9.7% at December 29, 2000. The weighted-average interest
rate on the Company's  outstanding Term Loans was approximately 9.8% at December
29, 2000. The  weighted-average  interest rate incurred with respect to all debt
obligations  was  approximately  9.8% for the year ended  December 29, 2000, and
9.5% for the period from April 24,  1999 to  December  31, 1999 and 9.3% for the
period from January 1, 1999 to April 23, 1999.

The Senior Notes require semi-annual  interest payments on August 1 and February
1 of each year and a principal  payment of  $69,300,000 on August 1, 2005. The 9
7/8% Series B Senior Notes are guaranteed by certain  domestic  subsidiaries  of
the Company.

The 9%  subordinated  note was issued in connection  with an acquisition and was
paid on June 10, 2000.

The Virginia  Small  Business  Financing  Authority  note  requires  semi-annual
payments of $185,000 through September 2001 with a final payment of $435,000 due
March  2002.  Other  obligations  include  debt  obligations  of  several of the
Company's subsidiaries.

Maturities of long-term obligations subsequent to December 29, 2000, approximate
$11,925,000 in 2001,  $14,609,000 in 2002,  $15,147,000 in 2003,  $15,334,000 in
2004, and $134,008,000 in 2005.

The Company's  accounts  receivable,  inventories and property and equipment are
pledged as collateral for the Virginia Small Business  Financing  Authority note
and accounts  receivable  and  inventories  are pledged as collateral  under the
Credit Agreement.  The Credit Agreement limits the ability of the Company, among
other  limitations,  to incur certain  additional  indebtedness,  places certain
restrictions on the payment of dividends and limits the amount of annual capital
expenditures.  The Credit  Agreement also contains certain  financial  covenants
which require the Company,  among other requirements,  to meet certain financial
ratios  relating to leverage,  fixed charges and interest  coverage (see Note 15
relating to the amendment of the Credit Agreement). The indenture related to the
9 7/8%  Series B Senior  Notes  limits the ability of the  Company,  among other
limitations,  to pay dividends,  make certain other restricted payments or incur
certain additional  indebtedness  unless it meets a cash flow coverage ratio, as
defined.  In addition,  the Company may be required to offer to purchase  Senior
Notes  equal to 100% of the  principal  amount  thereof,  with the  proceeds  of
certain asset sales, as defined.

In October 1999, the Company  entered into an interest rate cap agreement and an
interest rate swap agreement with a bank. The interest rate cap agreement covers
$28,125,000  of variable  rate debt,  has an interest  rate cap of 6.5% over a 3
month LIBOR period and expires in October 2001. The interest rate swap agreement
also covers $28,125,000 of variable rate debt and expires in October 2001. Under
the terms of this agreement,  the interest rate is fixed at 5.98% over a 3 month
LIBOR  period as long as the 3 month LIBOR  remains  below 6.5%.  If the 3 month
LIBOR is greater than or equal to 6.5%,  but less than or equal to 7.00% then no
payment is required by the Company or the bank.  If the 3 month LIBOR is greater
than 7.00%,  the swap  becomes a cap at an interest  rate of 7.00%.  Under these
agreements  the Company  reduced its interest  expense in 2000 by an  immaterial
amount.


7. FINANCIAL INSTRUMENTS

At December 29, 2000 and December 31, 1999,  the carrying value of the Company's
financial instruments,  excluding foreign currency options and interest rate cap
and swap agreements,  approximate their fair values except for the 9 7/8% Series
B Senior Notes which had a fair value of  approximately  $67,568,000 at December
29, 2000 and $67,221,000 at December 31, 1999.

At December  29, 2000 and  December  31,  1999,  there were no foreign  exchange
forward  contracts  outstanding.  At December 29, 2000, the Company held foreign
currency  options  with a notional  amount of 9,000,000  Euros,  which expire in
monthly  amounts  through June 2001. At December 29, 2000, the carrying value of
these contracts was a $302,000 liability which approximated their fair value.

At December 29, 2000, the Company had  $56,250,000 of variable rate debt covered
by interest rate cap and swap  agreements.  At December 29, 2000, the fair value
of these agreements was not significant.


8. RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company and certain subsidiaries have defined benefit pension plans covering
substantially  all employees.  Benefits are generally based on employee years of
service and  compensation.  The Company's  funding policy is to contribute  such
amounts as are necessary

                                       44

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


to provide assets sufficient to meet the benefits to be paid to plan members.

The Company also sponsors  several  defined benefit  postretirement  medical and
life insurance plans providing  benefits to certain  employees who have worked a
minimum of five years and attained age 55 while in service with the Company. The
Company  requires  salaried  employees  retiring after April 1, 1993, to have 20
years of  service  after age 40 to receive  full  benefits  and has  implemented
maximum payment limits for certain of its hourly employees.  Salaried  employees
hired after May 1, 1991, are not eligible to participate in these postretirement
benefit plans. The plans are contributory,  with retiree contributions  adjusted
annually,  and contain other cost-  sharing  features  such as  deductibles  and
coinsurance. The Company's policy is to fund the costs of these medical and life
insurance benefit plans as they become due.

In the third quarter of 2000, the Company's Board of Directors approved an early
retirement  program  which  covered  certain  hourly  employees  at its  Verona,
Virginia  plant.  Employees'  eligibility for the early  retirement  program was
based  on  age  and  years  of  service.  Participants  were  provided  enhanced
retirement  benefits  including  additional years of credited service,  a social
security bridge and certain postretirement benefits.

The early retirement  program was offered to eligible employees between November
1, 2000 and December 15, 2000.  The offer was accepted by a majority of eligible
employees. The special termination benefits and related curtailment loss related
to the early retirement program approximated  $14,351,000 which were expensed in
the fourth  quarter of 2000 and are  included in the  consolidated  statement of
operations in the caption, "Special termination benefits".


                                       45

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The  following  tables  reconcile  the changes in benefit  obligations  and plan
assets in 2000 and 1999,  and  reconcile the funded status to prepaid or accrued
cost at December 29, 2000 and December 31, 1999:
<TABLE>
<CAPTION>


                                                                                                         Other Post-
                                                                          Pension Benefits           Retirement Benefits
                                                                     ----------------------        -----------------------
                                                                       2000         1999             2000          1999
                                                                     --------      --------        --------       --------
                                                                                         (In thousands)

<S>                                                                  <C>           <C>             <C>            <C>
Change in benefit obligation:
     Benefit obligation, beginning of year                           $ 95,576      $102,679        $ 23,714       $ 24,294
     Service cost                                                       2,209         2,550             510            560
     Interest cost                                                      7,357         6,995           1,950          1,732
     Employee contributions                                                 -             -              70             73
     Effect of discount rate change                                     2,863       (11,412)            567         (1,387)
     Effect of mortality assumption change                              6,299             -               -              -
     Curtailments                                                      (1,669)            -             739              -
     Special termination benefits                                      14,291             -            (282)             -
     Plan amendments related to changes in benefits                         -         1,035            (302)           149
     Effect of health care cost trend rate change                           -             -               -            143
     Actuarial (gain) loss                                                501          (275)            830           (682)
     Benefits paid                                                     (6,938)       (5,996)         (1,590)        (1,168)
                                                                     --------      --------        --------       --------
     Benefit obligation, end of year                                 $120,489      $ 95,576        $ 26,206       $ 23,714
                                                                     ========      ========        ========       ========
Change in plan assets:
     Plan assets at fair value, beginning of year                    $123,923      $122,222        $      -       $      -
     Actual return on plan assets                                       8,950         7,575               -              -
     Employer contributions                                               163           122           1,520          1,095
     Employee contributions                                                 -             -              70             73
     Benefits paid                                                     (6,938)       (5,996)         (1,590)        (1,168)
                                                                     --------      --------        --------       --------
     Plan assets at fair value, end of year                          $126,098      $123,923        $      -       $      -
                                                                     ========      ========        ========       ========
Reconciliation of prepaid (accrued) cost:
     Funded status of the plans                                      $  5,609      $ 28,347        $(26,206)      $(23,714)
     Unrecognized prior service cost                                      839           967            (136)           141
     Unrecognized net (gain) loss                                       6,813        (5,527)           (574)        (2,452)
                                                                     --------      --------        --------       --------
     Prepaid (accrued) cost, end of year                             $ 13,261      $ 23,787        $(26,916)      $(26,025)
                                                                     ========      ========        ========       ========
</TABLE>

The benefit obligation, plan assets at fair value and prepaid cost (accrued cost
in 1999) for the  pension  plans with the benefit  obligation  in excess of plan
assets were $67,130,000,  $65,943,000 and $995,000, respectively, as of December
29, 2000, and $1,049,000,  $893,000 and $221,000,  respectively,  as of December
31, 1999.

                                       46

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Assumptions used for financial reporting purposes to compute benefit obligations
and net benefit  income or cost,  and the  components  of net  periodic  benefit
income or cost, are as follows (in thousands, except percentages):
<TABLE>
<CAPTION>

                                                                                                                Other Post-
                                                                          Pension Benefits                   Retirement Benefits
                                                                 ------------------------------        ---------------------------
                                                                     Company        Predecessor           Company      Predecessor
                                                                 -----------------  ----------         --------------   ----------
                                                                  2000       1999      1998            2000     1999       1998
                                                                 ------     ------  ------------       ------   ------  ----------

<S>                                                               <C>        <C>          <C>          <C>      <C>        <C>
Weighted-average assumptions for benefit obligations:
     Discount rate                                                7.75%      8.00%        7.00%        7.75%    8.00%      7.00%
     Rate of compensation increases                               4.00%      4.00%        4.00%        4.00%    4.00%      4.00%
     Expected return on plan assets                              11.00%     11.00%       11.00%          n/a      n/a        n/a

Weighted-average assumptions for net benefit income or cost:
     Discount rate                                                8.00%      7.00%        7.25%        8.00%    7.00%      7.25%
     Rate of compensation increases                               4.00%      4.00%        5.00%        4.00%    4.00%      5.00%
     Expected return on plan assets                              11.00%     11.00%       11.00%          n/a      n/a        n/a
Rate of increase in per capita cost
  of covered health care benefits                                   n/a        n/a          n/a        6.50%    7.00%      7.50%

</TABLE>

<TABLE>
<CAPTION>
                                                                                          Pension Benefits
                                                                           -------------------------------------------------
                                                                                  Company                   Predecessor
                                                                           ------------------------ ------------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


<S>                                                                          <C>         <C>          <C>          <C>
Components of net periodic benefit income (cost):
    Service cost                                                             $(2,209)    $(1,744)     $  (806)     $(2,585)
    Interest cost                                                             (7,357)     (4,624)      (2,371)      (6,794)
    Expected return on plan assets                                            13,351       8,380        4,032       11,383
    Special termination benefits                                             (14,291)          -            -            -
    Net amortization and deferral                                               (118)        (68)          (8)         (94)
                                                                            --------     -------      -------      -------
Net periodic benefit (cost) income                                          $(10,624)    $ 1,944      $   847      $ 1,910
                                                                            ========     =======      =======      =======

</TABLE>

<TABLE>
<CAPTION>


                                                                                      Other Post-Retirement Benefits
                                                                           ------------------------------------------------
                                                                                  Company                 Predecessor
                                                                           ----------------------   -----------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


<S>                                                                          <C>         <C>            <C>        <C>
 Components of net periodic benefit income (cost):
   Service cost                                                             $  (510)    $  (374)       $(186)     $  (548)
    Interest cost                                                             (1,950)     (1,157)        (575)      (1,714)
    Special termination benefits                                                 282           -            -            -
    Curtailment loss                                                            (342)          -            -            -
    Net amortization and deferral                                                  3        (141)         188          419
                                                                             -------     -------        -----      -------
Net periodic benefit cost                                                    $(2,517)    $(1,672)       $(573)     $(1,843)
                                                                             =======     =======        =====      =======

</TABLE>

                                       47

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Net benefit income or cost is determined  using  assumptions at the beginning of
each year.  Funded status is  determined  using  assumptions  at the end of each
year.

The rates for the per capita cost of covered  health care  benefits were assumed
to  decrease  gradually  to  5.50%  in year  2003,  and  remain  at  that  level
thereafter.  The health care cost trend rate assumption has a significant effect
on the amounts reported. An increase in the assumed health care cost trend rates
by  one  percentage   point  in  each  year  would   increase  the   accumulated
postretirement  benefit  obligation as of December 29, 2000, by $918,000 and the
aggregate  of  the  service  and  interest  cost   components  of  net  periodic
postretirement benefit cost for 2000 by $118,000.

The net pension asset is comprised of a prepaid  pension asset of $13,347,000 in
2000 and $24,007,000 in 1999 and an accrued pension liability of $86,000 in 2000
and $220,000 in 1999. As a result of the  application of purchase  accounting in
1999,  the  Company  increased  its prepaid  pension  asset by  $15,904,000  and
increased  its pension  liability by $220,000 to reflect their fair market value
at  the  Acquisition  date.  In  addition  in  1999,  the  liability  for  other
postretirement benefits was increased by $1,073,000 to reflect fair market value
at the Acquisition  date.  Amortization  of  unrecognized  prior service cost is
based on the expected  future  service of active  employees  expected to receive
benefits. The plan assets are primarily invested in listed common stocks, bonds,
cash equivalents, and U.S. government debt securities.

The Company and certain  subsidiaries sponsor defined contribution benefit plans
for substantially all U.S.  employees.  The plans permit employees to contribute
up to 15% of their salary to the plan. The Company also makes  contributions  to
certain of the plans  which  approximated  $246,000  in 2000,  $109,000  for the
period  from April 24, 1999 to December  31,  1999,  $51,000 for the period from
January 1, 1999 to April 23, 1999, and $136,000 in 1998.


9. TAXES ON INCOME

The provision for taxes on income is comprised of the following:
<TABLE>
<CAPTION>

                                                      Company                Predecessor
                                               ----------------------  --------------------------
                                                            Period      Period
                                                             from        from
                                                 Year      April 24,   January 1,      Year
                                                 Ended      1999 to      1999 to       Ended
                                                December    December    April 23,     December
                                               29, 2000    31, 1999       1999       31, 1998
                                               ---------  ----------   ----------   ----------
                                                                (In thousands)

    <S>                                         <C>         <C>          <C>          <C>
    Current:
     Federal                                    $2,490      $1,065       $ (850)      $4,541
      State and local                              457         611         (262)         319
      Foreign                                    1,755       1,757           38         (403)
                                                 -----       -----       ------        -----
    Total current                                4,702       3,433       (1,074)       4,457
                                                 -----       -----       ------        -----

    Deferred:
      Federal                                   (4,201)     (1,718)         207         (557)
      State and local                             (468)       (195)          31          (34)
      Foreign                                      166         (67)          (6)         210
                                                ------      ------       ------       ------
    Total deferred                              (4,503)     (1,980)         232         (381)
                                                ------      ------       ------       ------
    Total provision for income taxes            $  199      $1,453       $ (842)      $4,076
                                                ======      ======       ======       ======
</TABLE>

The Company is included in its parent company's  consolidated federal income tax
return and has calculated its federal tax provision on a separate  return basis.
The  Company's  state tax  provision  for 2000 and for the period from April 24,
1999 to December 31, 1999  reflects the state tax benefit of the  unconsolidated
parent company. This benefit is approximately  $100,000 in 2000 and $230,000 for
the period from April 24, 1999 to December 31, 1999.

The  Company  has  not  provided  taxes  of  approximately   $1,428,000  on  the
undistributed pre-tax earnings of $19,336,000 of foreign

                                       48

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


subsidiaries  as it is the intent of the Company to support  these  subsidiaries
with  such  earnings.   Income  before  income  taxes  attributable  to  foreign
operations  for 2000,  for the period from April 24, 1999 to December  31, 1999,
for the  period  from  January  1,  1999 to  April  23,  1999,  and for 1998 was
approximately $5,207,000, $5,474,000, $516,000, and $265,000, respectively.


The Company's  effective income tax rate varies from the United States statutory
rate as follows:
<TABLE>
<CAPTION>

                                                                                  Company                 Predecessor
                                                                           ----------------------   -----------------------
                                                                                         Period      Period
                                                                                          from        from
                                                                              Year      April 24,   January 1,      Year
                                                                              Ended      1999 to      1999 to       Ended
                                                                             December    December    April 23,     December
                                                                            29, 2000    31, 1999       1999       31, 1998
                                                                           ----------  ----------   ----------   ----------


    <S>                                                                       <C>           <C>        <C>            <C>
    United States rate                                                        (35)%         35%        (35)%          35%
    Foreign taxes in excess of (less than) U.S. rate                           16           12          (2)           (2)
    State income taxes, net of federal tax benefit                             (1)          26          (2)            2
    Goodwill amortization                                                      26          109           3             5
    Transaction expenses                                                        -            -          26             -
    Tax liability adjustments                                                   -            -           -           (11)
    Other--net                                                                 (2)          (2)          -             -
                                                                               --         ----         ---           ---
    Effective income tax rate                                                  4%          180%        (10)%          29%
                                                                               =           ===         ====           ==
</TABLE>

At December  29, 2000 and  December  31,  1999,  the  Company had  deferred  tax
liabilities  and  assets  which  have  been  netted  by  tax   jurisdiction  for
presentation  purposes.  Included in the deferred tax  liabilities-other are the
Company's  estimated tax  liabilities  relating to tax issues.  The  significant
components  of these  amounts at December  29, 2000 and December 31, 1999 are as
follows:

                                                            Company
                                                    ------------------------
                                                    December       December
                                                    29, 2000       31, 1999
                                                    ---------      ---------
                                                         (In thousands)

Deferred tax liabilities:
Property and equipment                                $14,254        $15,837
Employee benefits                                       5,520          9,437
Goodwill, trademarks and patents                        4,722          4,888
Inventories                                               283              -
Other                                                   4,250          4,084
                                                      --------       -------
Total deferred tax liabilities                         29,029         34,246

Deferred tax assets:
Employee benefits                                      12,177         11,441
Selling and promotion costs                             1,868          1,537
Inventories                                             1,610          1,947
Interest                                                   28          1,442
Other                                                     585            615
                                                      -------        -------
Total deferred tax assets                              16,268         16,982
                                                      -------        -------
Net deferred tax liabilities                          $12,761        $17,264
                                                      =======        =======

As a result of the  application  of  purchase  accounting  in 1999,  the Company
decreased its deferred tax assets by  $1,043,000  and increased its deferred tax
liabilities  by  $16,467,000  to  reflect  the  differences   between  financial
statement amounts and tax bases of assets and liabilities.

                                       49

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The  deferred  tax  liabilities  and assets are  disclosed  in the  consolidated
balance sheets at December 29, 2000 and December 31, 1999 as follows:

                                                              Company
                                                      -----------------------
                                                      December       December
                                                      29, 2000       31, 1999
                                                      --------     ----------
                                                           (In thousands)


Noncurrent deferred income tax liabilities            $18,155        $24,078
Current deferred income tax assets                      5,394          6,814
                                                      -------       --------
Net deferred tax liabilities                          $12,761        $17,264
                                                      =======        =======

During 1998, the Predecessor  recognized a $1,546,000 reduction in its provision
for income taxes as a result of settling  prior years' IRS  examination  issues.
The  settlement of these issues did not have a materially  adverse impact on the
1998   consolidated   financial   position  or  results  of  operations  of  the
Predecessor.


10. STOCKHOLDER'S EQUITY

In June 2000, RSA Holdings  Corporation,  the Company's parent,  adopted a stock
incentive plan, whereby stock options may be granted to directors,  officers and
other key employees of RSA Holdings Corporation and its subsidiaries to purchase
a specified  number of shares of common stock for a term not to exceed 10 years.
The plan  provides for the granting of options to purchase up to 110,000  shares
of common stock of RSA Holdings  Corporation.  Grants of options to be issued to
directors, officers and other key employees vest and become exercisable upon the
attainment  of  certain  performance  goals  at the end of  certain  performance
periods, as defined in the plan or after nine years. At December 29, 2000, there
were 93,700 stock options  outstanding under the RSA Holdings  Corporation stock
plan.

In  accordance  with  FASB   Interpretation  No.  44,  "Accounting  for  Certain
Transactions Involving Stock Compensation", an interpretation of APB Opinion No.
25,  "Accounting  for Stock Issued to Employees",  the Company has accounted for
the provisions of the RSA Holdings  Corporation  stock plan in its  consolidated
financial  statements.  Accordingly,  because  the  exercise  price of the stock
options equaled the fair market value of the underlying stock on the measurement
date, no compensation expense was recognized.

The  Predecessor  had an incentive  stock option plan  whereby  incentive  stock
options were granted to directors,  officers and other key employees to purchase
a specified  number of shares of common  stock at a price not less than the fair
market  value on the date of grant and for a term not to  exceed  10 years.  The
plan  provided for the  granting of options to purchase up to 750,000  shares of
common  stock.  Grants of options for 10,000  shares of common stock for each of
two new  directors  issued  in  June  1993  became  exercisable  in  five  equal
installments  commencing  one year  from the date of grant.  Grants  of  options
issued to key management  employees  became 40%  exercisable two years following
the date of grant and the remainder were  exercisable  over the following  three
years in equal annual  installments.  The plan also provided for the granting of
stock  appreciation  rights ("SARs") to officers and key employees with terms of
ten  years.  The terms of the SARs are  determined  at the time of  grant.  Upon
exercise,  holders of SARs are paid, at the option of the  Predecessor,  cash or
common  stock in an amount  equal to the  appreciation  in market  value of such
stock between the grant date and the exercise date.

In  connection  with  the  Acquisition,  the  Predecessor  redeemed  all  of its
outstanding  options to purchase common stock at an aggregate  purchase price of
$1,162,000. The Company does not have an incentive stock option plan.

Pro forma information regarding net income and earnings per share is required by
FAS Statement No. 123,  "Accounting for Stock- Based Compensation," and has been
determined as if the  Predecessor  had accounted for its employee  stock options
under the fair value method of that Statement.  The fair value for these options
was estimated at the date of grant using the Black-Scholes option-pricing model.
Significant  weighted-average  assumptions  used in the model for valuing  stock
options granted during 1997 and 1996 are as follows:


                                       50

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                              1997             1996
                                              ----             ----

Risk-free interest rate                       6.9%             6.6%
Expected life of the option              7.9 years        8.0 years
Expected volatility of stock                  .268             .261
Expected dividend yield                         0%               0%

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options vesting period.  The  Predecessor's pro
forma information follows (in thousands, except for earnings per share data):

                                 Period from          Year Ended
                                January 1, 1999        December
                              to April 23, 1999        31, 1998
                              -----------------       ----------
Net (loss) income
      As reported                      $(7,816)          $10,102
      Pro forma                         (7,974)            9,600

Earnings per share
      As reported
        Basic                           $(0.65)            $0.83
        Diluted                          (0.65)             0.83
      Pro forma
        Basic                            (0.66)             0.79
        Diluted                          (0.66)             0.79

Stock options granted during 1997 (net of forfeitures) aggregated 120,500 shares
and the weighted-average estimated fair value at the date of grant was $7.47 per
share.  There were no stock options  granted by the  Predecessor  during 1999 or
1998.

Stock option plan activity of the Predecessor is summarized below:
<TABLE>
<CAPTION>

                                                              Exercise Price Per Share
                                                           -----------------------------
                                              Number of                         Weighted
                                              Shares           Range             Average
                                              --------      ------------         -------

<S>                                            <C>          <C>                   <C>
Outstanding at December 31, 1997               482,200      $8.63-$15.38          $11.03
Exercised in 1998                              (12,000)             8.63            8.63
Cancelled in 1998                               (5,500)       8.63-15.38           10.93
                                              --------      ------------          ------
Outstanding at December 31, 1998               464,700        8.63-15.38           11.09
Exercised - March 19, 1999                        (300)             8.63            8.63
Redeemed - April 23, 1999                     (457,600)       8.63-11.00           11.04
Cancelled - April 23, 1999                      (6,800)       8.63-15.38           15.08
                                              --------      ------------          ------
Outstanding at April 23, 1999                        -      $          -          $    -
                                              ========      ============          ======
</TABLE>

Stock options  outstanding at December 31, 1998,  aggregated  464,700 shares and
had  a  weighted-average   remaining   contractual  life  of  6.9  years  and  a
weighted-average  exercise price of $11.09 per share. Stock options  exercisable
at December 31, 1998 and 1997 totaled 232,600 and 142,460 shares,  respectively.
Stock options exercisable at December 31, 1998, had a weighted-average  exercise
price of $9.20 per share.  Stock  options  reserved for future grant at December
31, 1998 and 1997 totaled 268,100 and 262,600 shares, respectively.


                                       51

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Changes in the components of stockholder's equity are as follows:
<TABLE>
<CAPTION>

                                                                           Predecessor
                                           ----------------------------------------------------------------------------------------
                                                  Common Stock              Advances        Retained      Accumulated
                                           -----------------------------     to RSA         Earnings        Other
                                                        Par   Additional     Holdings     (Accumulated   Comprehensive
                                            Shares     Value   Capital     Corporation     Deficit)      (Loss) Income     Total
                                           ----------  -----  ----------   -----------    ------------   -------------   ---------
                                                                       (In thousands, except share data)

<S>                                        <C>          <C>    <C>         <C>               <C>                <C>       <C>
Balance at December 31, 1998               12,110,049   $121   $  65,905   $        -        $  4,457           $(929)    $69,554
   Exercise of stock options                      300      -           2            -               -               -           2
   Foreign currency translation                     -      -           -            -               -            (116)       (116)
   Purchase accounting transactions                 -      -     106,936      (24,155)          3,359           1,045      87,185
   Net loss                                         -      -           -            -          (7,816)              -      (7,816)
                                           ----------   ----    --------     --------        --------         -------    --------
Balance at April 23, 1999                  12,110,349   $121    $172,843     $(24,155)       $      -         $     -    $148,809
                                           ==========   ====    ========     ========        ========         =======    ========
</TABLE>

<TABLE>
<CAPTION>

                                                                                  Company
                                           ----------------------------------------------------------------------------------------
                                                  Common Stock              Advances        Retained     Accumulated
                                           -----------------------------     to RSA         Earnings        Other
                                                        Par   Additional     Holdings     (Accumulated   Comprehensive
                                            Shares     Value   Capital     Corporation     Deficit)      Income (Loss)     Total
                                           ----------  -----  ----------   -----------    ------------   -------------   ---------
                                                                       (In thousands, except share data)

<S>                                        <C>          <C>     <C>          <C>              <C>               <C>      <C>
Balance at April 23, 1999                  12,110,349   $121    $172,843     $(24,155)        $     -           $   -    $148,809
   Foreign currency translation                     -      -           -            -               -              10          10
   Advances to RSA Holdings
      Corporation, net                              -      -           -      (18,559)              -               -     (18,559)
   Net loss                                         -      -           -            -          (1,258)              -      (1,258)
                                           ----------    ---     -------     --------         -------           -----    --------
Balance at December 31, 1999               12,110,349    121     172,843      (42,714)         (1,258)             10     129,002
   Foreign currency translation                     -      -           -            -               -            (587)       (587)
   Advances to RSA Holdings, net                    -      -           -       (9,347)              -               -      (9,347)
   Net loss                                         -      -           -            -          (5,208)              -      (5,208)
                                           ----------   ----    --------     --------         -------           -----    --------
Balance at December 29, 2000               12,110,349   $121    $172,843     $(52,061)        $(6,466)          $(577)   $113,860
                                           ==========   ====    ========     ========         =======           =====    ========
</TABLE>

Accumulated  other  comprehensive  (loss)  income  consists  entirely of foreign
currency  translation  adjustments  at December 29, 2000,  December 31, 1999 and
April 23, 1999.  These amounts have not been tax  effected.  Net advances to RSA
Holdings  Corporation for 2000 of $9,347,000 relate primarily to the $10,000,000
reduction in RSA Holdings Corporation outstanding note payable including accrued
interest. Net advances to RSA Holdings Corporation for the period from April 24,
1999 to December 31, 1999 of  $18,559,000  relate  primarily to the  $15,000,000
reduction in RSA Holdings Corporation outstanding note payable including accrued
interest  and the  repurchase  of the  outstanding  shares of the  Predecessor's
Common Stock, which remained  outstanding  following the Stock Tender Offer, for
$3,362,000.


11. SEGMENT INFORMATION

The Company has three reportable  segments,  organized primarily on the basis of
differences  in products,  which  consist of Razors and Blades,  Cotton and Foot
Care and Custom Bar Soap. The razors and blades  segment  includes three product
lines,  consumer shaving razors and blades,  both store and value brand,  blades
and bladed hand tools, and specialty  industrial and medical blades.  The cotton
and foot care segment  includes cotton swabs,  cotton balls and puffs,  cosmetic
pads,  tissues,  pharmaceutical  and beauty coil,  and foot care  products.  The
custom bar soap segment includes  cosmetic/skin  care, bath,  pharmaceutical and
specialty custom bar soaps.

The Company evaluates  performance and allocates resources to its segments based
on operating  income.  The  accounting  policies of the segments are the same as
those described in the summary of significant accounting policies (See Note 2).


                                       52

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


                                                       Net Sales                                   Operating Income (Loss)
                                      ---------------------------------------------    --------------------------------------------
                                             Company             Predecessor                 Company              Predecessor
                                      ---------------------  ----------------------    ---------------------- ---------------------
                                                   Period      Period                               Period      Period
                                                    from        from                                 from        from
                                        Year      April 24,  January 1,     Year         Year      April 24,   January 1,   Year
                                        Ended      1999 to     1999 to      Ended        Ended      1999 to     1999 to    Ended
                                       December    December   April 23     December     December   December    April 23,  December
                                      29, 2000     31, 1999     1999       31, 1998     29, 2000   31, 1999      1999     31, 1998
                                      ---------   ---------  ----------   ---------    ---------   ---------   ---------  ---------
                                                                               (In thousands)

<S>                                    <C>         <C>          <C>        <C>          <C>          <C>       <C>         <C>
Razors and Blades                      $210,116    $146,318     $55,189    $183,979     $14,343      $11,368   $ 6,761     $20,969
Cotton and Foot Care                     81,103      58,767      25,551      87,339        (837)       1,847       264       4,111
Custom Bar Soap                          27,594      22,074       6,851      26,170       1,327        2,703      (218)      1,368
                                       --------    --------     -------    --------     -------      -------   -------     -------
                                       $318,813    $227,159     $87,591    $297,488      14,833       15,918     6,807      26,448
                                       ========    ========     =======    ========
Transaction expenses                                                                          -            -    11,440           -
                                                                                        -------      -------   -------     -------
Operating income (loss)                                                                  14,833       15,918    (4,633)     26,448
Interest expense                                                                         19,842       15,112     3,907      12,270
                                                                                        -------      -------   -------     -------
(Loss) income before income taxes
   and extraordinary item                                                               $(5,009)     $   806   $(8,540)    $14,178
                                                                                        =======      =======   =======     =======
</TABLE>

<TABLE>
<CAPTION>


                                                                      Additions to Long-Lived Assets
                                                               --------------------------------------------
                                                                     Company               Predecessor
                                                               ---------------------   ---------------------
                                     Year-End Assets                         Period     Period
                           --------------------------------                   from       from
                           Company     Company  Predecessor      Year      April 24,   January 1,   Year
                           --------    -------- -----------      Ended      1999 to    1999 to      Ended
                           December    December    December     December    December   April 23,   December
                           29, 2000    31, 1999    31, 1998     29, 2000    31, 1999    1999       31, 1998
                          ---------   ---------   ---------    ---------  ----------   ----------  --------
                                                           (In thousands)

<S>                        <C>         <C>         <C>           <C>          <C>      <C>          <C>
Razors and Blades          $303,088    $315,932    $186,328      $14,561      $5,624   $113,885     $ 8,362
Cotton and Foot Care         57,168      56,569      50,940        1,981       1,065      6,970       3,700
Custom Bar Soap              29,330      30,370      25,629          425         994        427         964
                           --------    --------    --------      -------      ------   --------     -------
                           $389,586    $402,871    $262,897      $16,967      $7,683   $121,282     $13,026
                           ========    ========    ========      =======      ======   ========     =======
</TABLE>

<TABLE>
<CAPTION>

                                                 Depreciation and Amortization
                                       -------------------------------------------------
                                             Company                    Predecessor
                                       -----------------------  ------------------------
                                                    Period      Period
                                                     from        from
                                         Year      April 24,   January 1,      Year
                                         Ended      1999 to      1999 to       Ended
                                       December    December    April 23,     December
                                       29, 2000    31, 1999      1999        31, 1998
                                       ---------  ----------   ----------   ----------
                                                         (In thousands)

<S>                                      <C>          <C>          <C>         <C>
Razors and Blades                        $14,170      $8,973       $2,769      $ 8,162
Cotton and Foot Care                       2,930       1,867          917        2,876
Custom Bar Soap                            1,046         657          419        1,139
                                         -------     -------       ------      -------
                                         $18,146     $11,497       $4,105      $12,177
                                         =======     =======       ======      =======
</TABLE>


Operating  income in 2000 for  Razors and Blades  includes  special  termination
benefits of $14,351,000.  Operating income for the period from April 24, 1999 to
December  31,  1999 for Razors and  Blades,  Cotton and Foot Care and Custom Bar
Soap  includes a purchase  accounting  adjustment  to inventory  of  $8,793,000,
$169,000  and  $46,000,  respectively.  Operating  income in 1998 for Razors and
Blades and Cotton  and Foot Care  includes  special  charges of  $2,819,000  and
$184,000, respectively.

                                       53

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The table below reports net sales and long-lived  assets  (including  intangible
assets) by  geographic  area.  Transfers  between  geographic  areas are made at
arms-length  pricing.  With the  exception  of the United  States and the United
Kingdom,  no  country  exceeded  10% of net  sales  and only the  United  States
exceeded  10% of  long-lived  assets in any year.  Revenues  were  allocated  to
geographic areas based on the location to which the product was shipped.
<TABLE>
<CAPTION>

                                                      Geographic Areas
                                                       (In thousands)
                                           Company                 Predecessor
                                    ---------------------   -----------------------
                                                 Period      Period
                                                  from        from
                                      Year      April 24,   January 1,      Year
                                      Ended      1999 to      1999 to       Ended
                                     December    December    April 23,     December
                                    29, 2000    31, 1999       1999       31, 1998
                                    ---------   ---------   ----------    ---------

<S>                                  <C>         <C>           <C>         <C>
  Net sales:
     United States                   $253,139    $184,863      $71,618     $243,660
       Foreign                         65,674      42,296       15,973       53,828
                                     --------    --------      -------     --------
          Total                      $318,813    $227,159      $87,591     $297,488
                                     ========    ========      =======     ========

                                     December         December 31,
                                     29, 2000      1999         1998
                                     --------    --------     --------
    Long-lived assets
       United States                 $241,384    $243,590     $134,996
       Foreign                         12,536      12,902       11,480
                                     --------    --------     --------
          Total                      $253,920    $256,492     $146,476
                                     ========    ========     ========
</TABLE>

The Company's foreign operations are located  principally in the United Kingdom,
the Caribbean, Canada, Mexico, Brazil, Europe and Israel.

Export  sales from United  States  operations  aggregated  $5,988,000  for 2000,
$4,628,000  for the period from April 24, 1999 to December 31, 1999,  $1,398,000
for the period from January 1, 1999 to April 23, 1999,  and  $5,793,000 in 1998.
Sales to one of the Company's  customers in the Razors and Blades and Cotton and
Foot Care segments for 2000,  for the period from April 24, 1999 to December 31,
1999,  for the  period  from  January  1, 1999 to April 23,  1999,  and for 1998
amounted to  approximately  12%,  12%,  13% and 11% of  consolidated  net sales,
respectively.


12. COMMITMENTS, CONTINGENCIES AND OTHER

Cotton Matter:

During 1998, the Company purchased  bleached cotton from an outside supplier for
use in its pharmaceutical coil business.  The Company converted this cotton from
incoming bales into a coil, which was shipped to its pharmaceutical customers to
be used as filler in bottles of oral dosage forms of pharmaceutical  products to
prevent  breakage.  During the period from March through  November of 1998,  the
process by which the  Company's  supplier  bleached  this  cotton was changed by
introducing  an  expanded  hydrogen  peroxide   treatment.   Subsequent  testing
indicated  varying levels of residual  hydrogen peroxide in the cotton processed
during this time period and the supplier in November  1998 reduced the levels of
residual hydrogen peroxide in its bleaching process.  The Company,  to date, has
received  complaints from a number of customers  alleging  defects in the cotton
supplied  them  during the period and  asserting  these  defects may have led to
changes  in their  products  pharmaceutical  appearance,  and with  respect to a
limited number of products, potency. No lawsuits have been filed by any of these
customers.  The Company has received written notice of claims for damages in the
aggregate amount of approximately $117.0 million. In addition, $113.0 million of
this amount is for alleged lost profits from two  customers,  which lost profits
have not been substantiated.  It is possible that additional damage claims might
be  forthcoming.  On  March  2,  1999,  at the  request  of the  Food  and  Drug
Administration,  the Company  notified all (numbering  approximately  85) of its
pharmaceutical  cotton coil  customers that it was  withdrawing  from the market
those lots of cotton coil which may contain elevated

                                       54

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


levels of hydrogen peroxide.

The Company has notified its supplier that, in the Company's  view, the supplier
is primarily responsible for damages, if any, that may arise out of this matter.
At this time, the Company's  supplier has agreed to be responsible  for the cost
of fiber,  bleaching and freight of returned  product,  but has not agreed to be
responsible  for any other  damages and has  expressed  an  intention  to assert
defenses to the Company's  claims.  The Company's  insurance  carriers have been
timely notified of the existence of the claim and have agreed to provide defense
in a  reservation  of rights  letter,  but are  continuing  to evaluate  whether
coverage  would apply to all  aspects of the  claims.  The Company is advised by
outside counsel that it has strong legal arguments that the aggregate  amount of
insurance  available for these claims would be sufficient to cover the magnitude
of the claims currently expressed.

The Company also has been advised by its outside counsel that it has a number of
valid  defenses  to  potential  customer  claims as well as a third  party claim
against its  supplier  for damages,  if any,  incurred by the Company.  However,
management cannot at this time make a meaningful estimate of the amount or range
of loss that could result from an unfavorable  outcome  relating to this overall
issue,  and accordingly,  there can be no assurance that the Company's  exposure
from this matter might not  potentially  exceed the combination of its insurance
coverages  and  recourse to its  supplier.  It is  therefore  possible  that the
Company's  results of  operations  or cash flows in a  particular  quarterly  or
annual  period or its financial  position  could be  significantly  or adversely
affected by an ultimate unfavorable outcome of this matter.

Other Matters:

In June  1999,  the  Company  received  notice of the filing of a lawsuit by The
Gillette Company ("Gillette") asserting claims for damages and injunctive relief
for  alleged  patent  infringement,   misappropriation  of  trade  dress,  false
advertising  and breach of  contract in  connection  with the  marketing  of the
Company's  two-bladed and three-bladed  shaving  cartridge  systems (the MBC(TM)
introduced in 1994 and the  Tri-Flexxx(TM)  introduced in 1999). In August 1999,
the  Company  filed an answer and  counterclaims  in which it denied  Gillette's
allegations,  sought a declaration  that Gillette's  patents were not infringed,
were invalid and unenforceable,  and asserted counterclaims against Gillette for
damages  and  injunctive  relief  for,  among other  things,  alleged  antitrust
violations  and false  advertising.  In December  2000, the Company and Gillette
resolved their  differences on a mutually  acceptable  basis and the lawsuit was
dismissed.  The Company  entered  into a worldwide  license  relating to certain
Gillette  patents which was recorded as an intangible asset in December 2000 and
is being  amortized on a straight-line  basis over the weighted  average life of
the patents of fourteen years.

The  Company is subject to other  litigation  incidental  to the  conduct of its
business and is also subject to government  agency  regulations  relating to its
products,  environmental matters, taxes and other aspects of its business. While
the ultimate outcome of proceedings against the Company cannot be predicted with
certainty,  management does not expect that these matters will have a materially
adverse effect on the consolidated  financial  position or results of operations
of the Company.

In connection  with the change in control of the Company in 1999 and termination
of  employment,   certain  executives  of  the  Predecessor   received  payments
aggregating $1.9 million. In addition in 1999, The Jordan Company, as advisor to
the transaction, received a fee of $2.5 million.

The Company leases  buildings,  office space and equipment under operating lease
agreements  which expire on various dates through 2013.  Certain  leases contain
renewal or purchase  options  which may be exercised  by the  Company.  Rent for
leases amounted to approximately  $4,093,000 for 2000, $2,709,000 for the period
from April 24, 1999 to December 31, 1999, $1,376,000 for the period from January
1,  1999 to  April  23,  1999 and  $3,918,000  in 1998.  Future  minimum  rental
commitments  under all  noncancellable  operating  leases at  December  29, 2000
approximate  $3,376,000  in  2001,  $2,759,000  in  2002,  $2,338,000  in  2003,
$2,215,000 in 2004 and $1,984,000 in 2005.


13. ACQUISITION

On September  18, 1998,  the  Predecessor  purchased all of the capital stock of
Wolco Holland B.V.  ("Wolco") for an aggregate  purchase price of  approximately
$2,626,000 net of cash acquired,  including assumed  liabilities of $877,000 and
acquisition  related  expenses.  Wolco is a packager  and  distributor  of razor
products to private label accounts in certain European markets.  The acquisition
was financed by borrowings  under the  Predecessor's  revolving credit facility,
internally  generated  funds and seller  financing  of  $1,178,000  and has been
accounted for under the purchase method of accounting.

                                       55

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Pro forma results of operations  for the year ended December 31, 1998, as if the
Wolco acquisition  occurred as of the beginning of the period, are not presented
as the effects are not material.


14. SPECIAL CHARGES

During  1998,  the  Predecessor  recorded an aggregate  charge of  approximately
$3,003,000,  which was  comprised  of  approximately  $1,000,000  related to the
Predecessor's  decision to discontinue  one of its product lines,  approximately
$1,803,000  for  certain   severance  and  employee   benefits  related  to  the
termination of certain  employees,  and  approximately  $200,000  related to the
shutdown of the  Predecessor's  cotton  operations in Sparks,  Nevada.  Employee
terminations  resulted  primarily from the  consolidation  of the  Predecessor's
sales forces and the termination of certain other management employees.


15. SUBSEQUENT EVENT

On March 28, 2001, the Company amended its Credit Agreement  which,  among other
things,  modified the  financial  ratio  requirements  relating to the leverage,
fixed charges and interest coverage ratios.  These financial ratio  requirements
were  modified  to allow the  Company  to meet  certain of the  financial  ratio
requirements.  In addition,  the Company's principal  stockholder has guaranteed
$5.0  million  of  borrowings  under the  Company's  existing  revolving  credit
facility.  On March 28, 2001, the Company  entered into an additional  revolving
credit  facility of $5.0  million  which has been  guaranteed  by the  principal
stockholder.


16. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

The  Company's  $69,300,000  of 9 7/8% Series B Senior  Notes due 2005 have been
guaranteed, on a joint and several basis by certain domestic subsidiaries of the
Company, which guarantees are senior unsecured obligations of each guarantor and
will rank pari passu in right of  payment  with all other  indebtedness  of each
guarantor.  However,  the guarantee of one of the guarantor  subsidiaries  ranks
junior to its outstanding subordinated note.

The following condensed  consolidating  financial information presents condensed
consolidating  financial  statements  as of December  29, 2000 and  December 31,
1999,  for the year ended  December 29, 2000, for the period from April 24, 1999
to December 31, 1999 (the Company), for the period from January 1, 1999 to April
23, 1999 and for the year ended  December  31, 1998  (Predecessor),  of American
Safety Razor  Company - the parent  company,  the guarantor  subsidiaries  (on a
combined basis),  the  non-guarantor  subsidiaries  (on a combined  basis),  and
elimination  entries necessary to combine such entities on a consolidated basis.
Separate  financial  statements and other  disclosures  concerning the guarantor
subsidiaries  are not presented  because  management  has  determined  that such
information would not be material to the holders of the Series B Senior Notes.


                                       56

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                     Condensed Consolidating Balance Sheets

                                December 29, 2000

<TABLE>
<CAPTION>

                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                             Guarantor      guarantor
                                                                   ASR     Subsidiaries   Subsidiaries  Eliminations   Consolidated
                                                                --------   ------------   ------------  ------------   ------------
                                                                                         (In thousands)


<S>                                                             <C>            <C>            <C>         <C>             <C>
Assets
Current assets:
   Cash and cash equivalents                                    $     97       $   191        $ 1,854     $       -       $  2,142
   Accounts receivable, net                                       22,304        11,393         18,331          (331)        51,697
   Advances receivable--subsidiaries                              66,995             -              -       (66,995)             -
   Inventories                                                    31,915        15,679         14,979          (945)        61,628
   Income taxes and prepaid expenses                               3,788         2,278            298             -          6,364
                                                                --------       -------        -------     ---------       --------

     Total current assets                                        125,099        29,541         35,462       (68,271)       121,831

Property and equipment, net                                       60,767        23,993          7,054             -         91,814
Intangible assets, net                                           134,978        22,161          4,967             -        162,106
Prepaid pension cost and other                                     4,533         9,281             21             -         13,835
Investment in subsidiaries                                        33,687             -          5,297       (38,984)             -
                                                                --------       -------        -------     ---------       --------
     Total assets                                               $359,064       $84,976        $52,801     $(107,255)      $389,586
                                                                ========       =======        =======     =========       ========

Liabilities and stockholder's equity Current liabilities:
   Accounts payable, accrued expenses
     and other                                                  $ 23,731       $ 8,300        $ 6,413     $       -       $ 38,444
   Advances payable--subsidiaries                                      -        50,472         17,799       (68,271)             -
   Current maturities of long-term obligations                    11,875            50              -             -         11,925
                                                                --------        ------        -------     --------        -------

     Total current liabilities                                    35,606        58,822         24,212       (68,271)        50,369

Long-term obligations                                            178,979           119              -             -        179,098
Retiree benefits and other                                        17,495        10,609              -             -         28,104
Deferred income taxes                                             12,820         4,792            543             -         18,155
                                                                --------        ------        -------     ---------       --------

     Total liabilities                                           244,900        74,342         24,755       (68,271)       275,726
                                                                --------        ------        -------     ---------       --------

Stockholder's equity
   Common stock                                                      121             -              2            (2)           121
   Additional paid-in capital                                    172,843        12,948         23,736       (36,684)       172,843
   Advances to RSA Holdings Corporation, net                     (52,061)            -              -             -        (52,061)
   (Accumulated deficit) retained earnings                        (6,464)       (2,314)         5,187        (2,875)        (6,466)
   Dividends                                                         302             -           (302)            -              -
   Accumulated other comprehensive loss                             (577)            -           (577)          577           (577)
                                                                --------       -------        -------     ---------       --------
                                                                 114,164        10,634         28,046       (38,984)       113,860
                                                                --------       -------        -------     ---------       --------
     Total liabilities and stockholder's equity                 $359,064       $84,976        $52,801     $(107,255)      $389,586
                                                                ========       =======        =======     =========       ========
</TABLE>


                                       57

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                     Condensed Consolidating Balance Sheets

                                December 31, 1999

<TABLE>
<CAPTION>

                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                             Guarantor      guarantor
                                                                   ASR     Subsidiaries   Subsidiaries  Eliminations   Consolidated
                                                                --------   ------------   ------------  ------------   ------------
                                                                                         (In thousands)


<S>                                                            <C>            <C>            <C>          <C>             <C>
Assets
Current assets:
  Cash and cash equivalents                                     $  6,221       $ 1,180        $ 5,081     $      18       $ 12,500
   Accounts receivable, net                                       19,927        12,906         13,751          (332)        46,252
   Advances receivable--subsidiaries                              59,790             -              -       (59,790)             -
   Inventories                                                    29,825        13,322         11,947          (690)        54,404
   Income taxes and prepaid expenses                               6,511         1,912            273             -          8,696
                                                                --------       -------        -------     ---------       --------

     Total current assets                                        122,274        29,320         31,052       (60,794)       121,852

Property and equipment, net                                       58,005        24,731          7,255             -         89,991
Intangible assets, net                                           138,404        22,994          5,103             -        166,501
Prepaid pension cost and other                                    16,133         8,373             21             -         24,527
Investment in subsidiaries                                        32,506             -          8,587       (41,093)             -
                                                                --------       -------        -------     ---------       --------
     Total assets                                               $367,322       $85,418        $52,018     $(101,887)      $402,871
                                                                ========       =======        =======     =========       ========

Liabilities and stockholder's equity Current liabilities:
   Accounts payable, accrued expenses
     and other                                                  $ 19,299       $10,830        $ 6,714     $      (1)      $ 36,842
   Advances payable--subsidiaries                                      -        44,289         16,504       (60,793)             -
   Current maturities of long-term obligations                     7,964         1,417          1,127             -         10,508
                                                                --------       -------        -------     ----------      ---------

     Total current liabilities                                    27,263        56,536         24,345       (60,794)        47,350

Long-term obligations                                            174,954           154              -             -        175,108
Retiree benefits and other                                        16,750        10,583              -             -         27,333
Deferred income taxes                                             19,353         4,392            333             -         24,078
                                                                --------       -------        -------     ---------       --------

     Total liabilities                                           238,320        71,665         24,678       (60,794)       273,869
                                                                --------       -------        -------     ---------       --------

Stockholder's equity
   Common stock                                                      121           485             87          (572)           121
   Additional paid-in capital                                    172,843        12,463         23,391       (35,854)       172,843
   Advances to RSA Holdings Corporation, net                     (42,714)            -              -             -        (42,714)
   (Accumulated deficit) retained earnings                        (1,258)          805          3,852        (4,657)        (1,258)
   Accumulated other comprehensive
     income                                                           10             -             10           (10)            10
                                                                --------       -------        -------     ---------       --------
                                                                 129,002        13,753         27,340       (41,093)       129,002
                                                                --------       -------        -------     ---------       --------
     Total liabilities and stockholder's equity                 $367,322       $85,418        $52,018     $(101,887)      $402,871
                                                                ========       =======        =======     =========       ========
</TABLE>


                                       58

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                Condensed Consolidating Statements of Operations

                          Year Ended December 29, 2000
<TABLE>
<CAPTION>


                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                             Guarantor      guarantor
                                                                   ASR     Subsidiaries   Subsidiaries  Eliminations   Consolidated
                                                                --------   ------------   ------------  ------------   ------------
                                                                                         (In thousands)

<S>                                                             <C>           <C>             <C>          <C>            <C>
Net sales                                                       $166,259      $109,552        $70,657      $(27,655)      $318,813
Cost of sales                                                     93,246        93,239         53,282       (27,655)       212,112
                                                                --------      --------        -------      --------       --------

Gross profit                                                      73,013        16,313         17,375             -        106,701

Selling, general and
   administrative expenses                                        45,917        14,989         12,042             -         72,948
Amortization of intangible assets                                  3,601           833            135             -          4,569
Special termination benefits                                      14,351             -              -             -       14,351
                                                                --------      --------        -------      ---------      --------

Operating income                                                   9,144           491          5,198             -         14,833

Operating income (expense):
   Equity in earnings (losses) of affiliates                       1,508             -         (3,290)        1,782              -
   Interest expense                                              (17,252)       (4,876)         2,286             -        (19,842)
                                                                --------      --------        -------      --------       --------
(Loss) income before income taxes                                 (6,600)       (4,385)         4,194         1,782         (5,009)
Income taxes (benefit)                                            (1,394)       (1,266)         2,859             -            199
                                                                --------      --------        -------      --------       --------

Net (loss) income                                               $ (5,206)     $ (3,119)       $ 1,335      $  1,782       $ (5,208)
                                                                ========      ========        =======      ========       ========

</TABLE>



                                       59

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                Condensed Consolidating Statements of Operations

             For the Period from April 24, 1999 to December 31, 1999
<TABLE>
<CAPTION>


                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                             Guarantor      guarantor
                                                                   ASR     Subsidiaries   Subsidiaries  Eliminations   Consolidated
                                                                --------   ------------   ------------  ------------   ------------
                                                                                         (In thousands)

<S>                                                             <C>            <C>            <C>          <C>            <C>
Net sales                                                       $116,497       $81,359        $44,001      $(14,698)      $227,159
Cost of sales:
   Cost of sales                                                  64,162        66,064         30,825       (14,563)       146,488
   Purchase accounting adjustment
      to inventory                                                 7,910           215            883             -          9,008
                                                                 -------       -------        -------      --------       --------

Gross profit                                                      44,425        15,080         12,293          (135)        71,663

Selling, general and
   administrative expenses                                        35,643         9,904          7,020             -         52,567
Amortization of intangible assets                                  2,466           626             86             -          3,178
                                                                 -------       -------        -------       -------       --------

Operating income                                                   6,316         4,550          5,187          (135)        15,918

Operating income (expense):
   Equity in earnings (losses) of affiliates                       5,205             -            (22)       (5,183)             -
   Interest expense                                              (13,514)       (2,996)         1,398             -        (15,112)
                                                                 -------       -------        -------       -------        -------
(Loss) income before income taxes
   and extraordinary item                                         (1,993)        1,554          6,563        (5,318)           806
Income taxes (benefit)                                            (1,346)          743          2,056             -          1,453
                                                                 -------       -------        -------       -------        -------

(Loss) income before extraordinary item                             (647)          811          4,507        (5,318)          (647)
Extraordinary item                                                   611             -              -             -            611
                                                                 -------       -------        -------       -------        -------
Net (loss) income                                                $(1,258)      $   811         $4,507       $(5,318)       $(1,258)
                                                                 =======       =======         ======       =======        =======

</TABLE>


                                       60

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                Condensed Consolidating Statements of Operations

              For the Period from January 1, 1999 to April 23, 1999
<TABLE>
<CAPTION>


                                                                                          Predecessor
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                             Guarantor      guarantor
                                                                   ASR     Subsidiaries   Subsidiaries  Eliminations   Consolidated
                                                                 -------   ------------   ------------  ------------   ------------
                                                                                         (In thousands)

<S>                                                              <C>           <C>            <C>           <C>            <C>
Net sales                                                        $46,889       $32,731        $17,136       $(9,165)       $87,591
Cost of sales                                                     26,237        28,514         12,934        (9,165)        58,520
                                                                 -------       -------        -------       -------        -------

Gross profit                                                      20,652         4,217          4,202             -         29,071

Selling, general and
   administrative expenses                                        13,665         3,860          3,904             -         21,429
Amortization of intangible assets                                    470           318             47             -            835
Transaction expenses                                              11,440             -              -             -         11,440
                                                                 -------       -------        -------       -------        -------

Operating (loss) income                                           (4,923)           39            251             -         (4,633)

Operating income (expense):
   Equity in earnings (losses) of affiliates                        (135)            -           (394)          529              -
   Interest expense                                               (3,193)       (1,300)           586             -         (3,907)
                                                                 -------       -------        -------       -------        -------
(Loss) income before income taxes
   and extraordinary item                                         (8,251)       (1,261)           443           529         (8,540)
Income taxes (benefit)                                              (553)         (570)           281             -           (842)
                                                                 -------       -------        -------       -------        -------

(Loss) income before extraordinary item                           (7,698)         (691)           162           529         (7,698)
Extraordinary item                                                   118             -              -             -            118
                                                                 -------       -------        -------       -------        -------
Net (loss) income                                                $(7,816)      $  (691)       $   162       $   529        $(7,816)
                                                                 =======       =======        =======       =======        =======
</TABLE>


                                       61

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                  Condensed Consolidating Statements of Income
                          Year Ended December 31, 1998

<TABLE>
<CAPTION>


                                                                                         Predecessor
                                                                --------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                --------    ------------  ------------   ------------  ------------
                                                                                         (In thousands)

<S>                                                             <C>            <C>             <C>          <C>           <C>
Net sales                                                       $150,691       $114,126        $55,141      $(22,470)     $297,488
Cost of sales                                                     85,333         96,508         42,607       (22,470)      201,978
                                                                --------       --------        -------      --------      --------

Gross profit                                                      65,358         17,618         12,534            -         95,510

Selling, general and administrative expenses                      40,840         11,822         10,854             -        63,516
Amortization of intangible assets                                  1,477            984             82             -         2,543
Special charges                                                    2,725            184             94             -         3,003
                                                                --------       --------         ------      --------      --------

Operating income                                                  20,316          4,628          1,504             -        26,448

Other income (expense):
   Equity in earnings of affiliates                                1,645              -            180        (1,825)            -
   Interest expense                                               (8,270)        (4,193)           193             -       (12,270)
                                                                --------       --------         ------      --------      --------
Income before income taxes                                        13,691            435          1,877        (1,825)       14,178
Income taxes                                                       3,589              8            479             -         4,076
                                                                --------       --------         ------      --------      --------

Net income                                                      $ 10,102       $    427         $1,398      $ (1,825)     $ 10,102
                                                                ========       ========         ======      ========      ========

</TABLE>


                                       62

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


           Condensed Consolidating Statements of Comprehensive Income

                      For the Year Ended December 29, 2000
<TABLE>
<CAPTION>


                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                ---------   ------------  ------------   ------------  ------------
                                                                                         (In thousands)

<S>                                                              <C>            <C>            <C>            <C>          <C>
Net (loss) income                                                $(5,206)       $(3,119)       $1,335         $1,782       $(5,208)
Other comprehensive loss:
   Foreign currency translation adjustments                         (587)             -          (587)           587          (587)
                                                                 -------       --------        ------         ------       -------
Comprehensive (loss) income                                      $(5,793)       $(3,119)       $  748         $2,369       $(5,795)
                                                                 =======        =======        ======         ======       =======
</TABLE>



           Condensed Consolidating Statements of Comprehensive Income

             For the Period from April 24, 1999 to December 31, 1999

<TABLE>
<CAPTION>

                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                ---------   ------------  ------------   ------------  ------------
                                                                                         (In thousands)

<S>                                                              <C>                <C>         <C>          <C>           <C>
Net (loss) income                                                $(1,258)           $811        $4,507       $(5,318)      $(1,258)
Other comprehensive income:
   Foreign currency translation adjustments                           10               -            10           (10)           10
                                                                 -------            ----        ------       -------       -------
Comprehensive (loss) income                                      $(1,248)           $811        $4,517       $(5,328)      $(1,248)
                                                                 =======            ====        ======       =======       =======

</TABLE>

           Condensed Consolidating Statements of Comprehensive Income

              For the Period from January 1, 1999 to April 23, 1999
<TABLE>
<CAPTION>


                                                                                         Predecessor
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                ---------   ------------  ------------   ------------  ------------
                                                                                         (In thousands)

<S>                                                              <C>              <C>            <C>             <C>       <C>
Net (loss) income                                                $(7,816)         $(691)         $162            $529      $(7,816)
Other comprehensive loss:
   Foreign currency translation adjustments                            -              -          (116)              -         (116)
                                                                 -------          -----          ----            ----      -------
Comprehensive (loss) income                                      $(7,816)         $(691)         $ 46            $529      $(7,932)
                                                                 =======          =====          ====            ====      =======
</TABLE>



                                       63

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


           Condensed Consolidating Statements of Comprehensive Income
                          Year Ended December 31, 1998

<TABLE>
<CAPTION>

                                                                                         Predecessor
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                ---------   ------------  ------------   ------------  ------------
                                                                                         (In thousands)

<S>                                                               <C>               <C>        <C>           <C>           <C>
Net income                                                        $10,102           $427       $1,398        $(1,825)      $10,102
Other comprehensive loss:
     Foreign currency translation adjustments                           -              -          (91)             -           (91)
                                                                  -------           ----       ------        -------       -------
Comprehensive income                                              $10,102           $427       $1,307        $(1,825)      $10,011
                                                                  =======           ====       ======        =======       =======

</TABLE>








                                       64

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                Condensed Consolidating Statements of Cash Flows

                      For the Year Ended December 29, 2000

<TABLE>
<CAPTION>

                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                --------    ------------  ------------   ------------  ------------
                                                                                         (In thousands)


<S>                                                              <C>            <C>           <C>              <C>          <C>
Operating activities
Net cash provided by (used in)
     operating activities                                        $14,218        $(3,290)      $(1,809)        $  255       $ 9,374

Investing activities
Capital expenditures                                             (11,450)        (2,405)       (1,545)             -       (15,400)
Other                                                               (238)             -             1              -          (237)
Investment in subsidiaries                                          (260)             -           260              -             -
Advances from (to) subsidiaries                                   (7,205)             -             -          7,205             -
                                                                 -------        -------       -------          -----       -------

Net cash used in investing activities                            (19,153)        (2,405)       (1,284)         7,205       (15,637)

Financing activities
Repayment of long-term obligations                               (31,413)        (1,477)       (1,127)             -       (34,017)
Proceeds from borrowings                                          39,349              -             -              -        39,349
Deferred loan fees                                                   (80)             -             -              -           (80)
Advances to RSA Holdings Corporation, net                         (9,347)             -             -              -        (9,347)
Advances from (to) subsidiaries                                        -          6,183         1,295         (7,478)            -
Dividends                                                            302              -          (302)             -             -
                                                                 -------        -------       -------         ------       -------

Net cash (used in) provided from
     financing activities                                         (1,189)         4,706          (134)        (7,478)       (4,095)

Net decrease in cash and cash equivalents                         (6,124)          (989)       (3,227)           (18)      (10,358)
Cash and cash equivalents, beginning of
     period                                                        6,221          1,180         5,081             18        12,500
                                                                 -------        -------       -------         ------       -------
Cash and cash equivalents, end of
     period                                                      $    97        $   191       $ 1,854         $    -       $ 2,142
                                                                 =======        =======       =======         ======       =======

</TABLE>



                                       65

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                Condensed Consolidating Statements of Cash Flows

             For the Period from April 24, 1999 to December 31, 1999

<TABLE>
<CAPTION>

                                                                                           Company
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                --------    -----------  ------------   ------------  ------------
                                                                                         (In thousands)


<S>                                                               <C>            <C>           <C>           <C>           <C>
Operating activities
Net cash provided by
     operating activities                                         $9,110         $2,871        $8,419        $(1,137)      $19,263

Investing activities
Capital expenditures                                              (5,427)        (2,075)         (928)             -        (8,430)
Other                                                                (29)             -             -              -           (29)
Advances from (to) subsidiaries                                    1,767              -             -         (1,767)            -
                                                                  ------         ------        ------        -------       -------

Net cash used in investing activities                             (3,689)        (2,075)         (928)        (1,767)       (8,459)

Financing activities
Repayment of long-term obligations                               (31,173)        (1,415)         (318)             -       (32,906)
Proceeds from borrowings                                          51,100            194             -              -        51,294
Deferred loan fees                                                  (395)             -             -              -          (395)
Advances to RSA Holdings Corporation, net                        (18,559)             -             -              -       (18,559)
Advances from (to) subsidiaries                                        -          1,308        (4,230)         2,922             -
                                                                 -------         ------        ------        -------       -------

Net cash provided from (used in)
     financing activities                                            973             87        (4,548)         2,922          (566)

Net increase in cash and cash
     equivalents                                                   6,394            883         2,943             18        10,238
Cash and cash equivalents, beginning of
     period                                                         (173)           297         2,138              -         2,262
                                                                  ------         ------        ------        -------       -------
Cash and cash equivalents, end of
     period                                                       $6,221         $1,180        $5,081        $    18       $12,500
                                                                  ======         ======        ======        =======       =======

</TABLE>


                                       66

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                Condensed Consolidating Statements of Cash Flows

              For the Period from January 1, 1999 to April 23, 1999

<TABLE>
<CAPTION>

                                                                                         Predecessor
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                ---------   ------------  ------------   ------------  ------------
                                                                                         (In thousands)


<S>                                                              <C>             <C>           <C>            <C>          <C>
Operating activities
Net cash (used in) provided by
     operating activities                                        $(7,841)        $1,545        $  518         $  444       $(5,334)

Investing activities
Capital expenditures                                              (2,538)          (824)         (276)             -        (3,638)
Other                                                                 49              -             -              -            49
Advances from (to) subsidiaries                                    1,997              -             -         (1,997)            -
                                                                 -------         ------        ------         ------       -------

Net cash used in investing activities                               (492)          (824)         (276)        (1,997)       (3,589)

Financing activities
Repayment of long-term obligations                               (21,464)           (62)         (383)             -       (21,909)
Proceeds from borrowings                                          61,400              -             -              -        61,400
Deferred loan fees                                                (7,606)             -             -              -        (7,606)
Proceeds from exercise of stock options                                2              -             -              -             2
Advances to RSA Holdings Corporation, net                        (24,155)             -             -              -       (24,155)
Advances from (to) subsidiaries                                        -           (468)       (1,085)         1,553             -
                                                                 -------         ------        ------         ------       -------

Net cash provided from (used in)
     financing activities                                          8,177           (530)       (1,468)         1,553         7,732

Net (decrease) increase in cash and cash
   equivalents                                                      (156)           191        (1,226)             -        (1,191)
Cash and cash equivalents, beginning of
     period                                                          (17)           106         3,364              -         3,453
                                                                 -------         ------        ------         ------        ------
Cash and cash equivalents, end of
      period                                                     $  (173)        $  297        $2,138         $    -        $2,262
                                                                 =======         ======        ======         ======        ======
</TABLE>

                                       67

<PAGE>


AMERICAN SAFETY RAZOR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                Condensed Consolidating Statements of Cash Flows

                          Year Ended December 31, 1998

<TABLE>
<CAPTION>
                                                                                         Predecessor
                                                                -------------------------------------------------------------------
                                                                                              Non-
                                                                              Guarantor     guarantor
                                                                   ASR      Subsidiaries  Subsidiaries   Eliminations  Consolidated
                                                                --------    ------------  ------------   ------------  ------------
                                                                                         (In thousands)


<S>                                                              <C>            <C>             <C>           <C>          <C>
Operating activities
Net cash provided by (used in) operating activities              $13,429        $(1,593)       $  383         $  322       $12,541
                                                                 -------        -------        ------         ------       -------

Investing activities
Capital expenditures                                              (7,205)        (3,976)         (194)             -       (11,375)
Purchase of Wolco, net of cash acquired                                -              -          (571)             -          (571)
Other                                                               (719)             -            56              -          (663)
Investment in subsidiaries                                        (3,481)             -         3,481              -             -
Advances from (to) subsidiaries                                   (5,481)             -             -          5,481             -
                                                                 -------        -------        ------         ------       -------

Net cash (used in) provided from investing activities            (16,886)        (3,976)        2,772          5,481       (12,609)
                                                                 -------        -------        ------         ------       -------

Financing activities
Repayment of long-term obligations                                  (320)          (192)         (885)             -        (1,397)
Proceeds from borrowings                                           3,300              -            80              -         3,380
Proceeds for exercise of stock options                               104              -             -              -           104
Advances from (to) subsidiaries                                        -          5,434           377         (5,811)            -
                                                                 -------        -------        ------         ------       -------

Net cash provided from (used in) financing activities              3,084          5,242          (428)        (5,811)        2,087
                                                                 -------        -------        ------         ------       -------

Net (decrease) increase in cash and cash
   equivalents                                                      (373)          (327)        2,727             (8)        2,019
Cash and cash equivalents, beginning of
  period                                                             356            433           637              8         1,434
                                                                 -------        -------        ------         ------       -------
Cash and cash equivalents, end of
   period                                                        $   (17)       $   106        $3,364         $    -       $ 3,453
                                                                 =======        =======        ======         ======       =======
</TABLE>


                                       68

<PAGE>










Report of Independent Auditors


The Board of Directors and Stockholder,
American Safety Razor Company


We have audited the accompanying  consolidated  balance sheet of American Safety
Razor  Company  and  subsidiaries  as of  December  29,  2000,  and the  related
consolidated statements of operations,  comprehensive income, and cash flows for
the year then ended.  Our audit also included the financial  statement  schedule
listed in the Index at Item 14(a).  These financial  statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all materials respects,  the consolidated  financial position of American Safety
Razor  Company and  subsidiaries  at December  29,  2000,  and the  consolidated
results of their  operations  and their cash flows for the year then  ended,  in
conformity with accounting  principles  generally accepted in the United States.
Also, in our opinion, the related financial statement schedule,  when considered
in relation to the basic financial statements taken as a whole,  presents fairly
in all material respects the information set forth therein.


                                  /s/ Ernst & Young LLP



March 9, 2001,
except for Note 15, as to which the date is
March 28, 2001
Richmond, Virginia

                                       69

<PAGE>











Report of Independent Accountants


To the Board of Directors and Shareholder
of American Safety Razor Company


In our  opinion,  the  consolidated  balance  sheet at December 31, 1999 and the
consolidated  statements of operations,  comprehensive income and cash flows for
the period from April 24, 1999 to December 31, 1999,  listed in the accompanying
index appearing under Item 14(a)(1) on page 33, present fairly,  in all material
respects,  the  financial  position of  American  Safety  Razor  Company and its
subsidiaries  (the  "Company")  at  December  31,  1999 and the results of their
operations  and their cash flows for the period  from April 24, 1999 to December
31, 1999 in conformity  with  accounting  principles  generally  accepted in the
United States of America. In addition,  in our opinion,  the financial statement
schedule  information  for the period from April 24, 1999 to December  31, 1999,
listed in the  accompanying  index  appearing  under Item  14(a)(2)  on page 33,
presents  fairly,  in all material  respects,  the information set forth therein
when read in conjunction  with the related  consolidated  financial  statements.
These   financial   statements   and  financial   statement   schedule  are  the
responsibility of the Company's management;  our responsibility is to express an
opinion on these financial  statements and financial statement schedule based on
our  audit.  We  conducted  our audit of these  statements  in  accordance  with
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion. We have not audited the consolidated financial
statements of the Company for any period subsequent to December 31, 1999.






PricewaterhouseCoopers LLP

Richmond, Virginia
February 11, 2000

                                       70

<PAGE>











Report of Independent Accountants


To the Board of Directors and Shareholder
of American Safety Razor Company


In our  opinion,  the  consolidated  balance  sheet at December 31, 1998 and the
consolidated  statements of operations,  comprehensive income and cash flows for
the  period  from  January  1, 1999 to April 23,  1999,  and for the year  ended
December  31,  1998,  listed in the  accompanying  index  appearing  under  Item
14(a)(1) on page 33, present  fairly,  in all material  respects,  the financial
position  of  American   Safety  Razor   Company  and  its   subsidiaries   (the
"Predecessor")  at December  31, 1998 and the  results of their  operations  and
their cash flows for the period  from  January 1, 1999 to April 23, 1999 and for
the year ended  December  31,  1998 in  conformity  with  accounting  principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule information for the period from January 1, 1999
to April  23,  1999 and for the year  ended  December  31,  1998,  listed in the
accompanying index appearing under Item 14(a)(2) on page 33, presents fairly, in
all  material  respects,   the  information  set  forth  therein  when  read  in
conjunction with the related consolidated financial statements.  These financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Predecessor's  management;  our responsibility is to express an opinion on these
financial  statements and financial  statement  schedule based on our audits. We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United States of America,  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable  basis for our opinion.  We have
not audited consolidated  financial statements of the Predecessor for any period
subsequent to April 23, 1999.






PricewaterhouseCoopers LLP

Richmond, Virginia
February 11, 2000

                                       71

<PAGE>



                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

                          AMERICAN SAFETY RAZOR COMPANY

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                             Company
                                                                  -----------------------------------------------------------------
                                                                                      Additions
                                                                               ----------------------
                                                                    Balance     Charged to    Charged                      Balance
                                                                   Beginning    Costs and    to Other                       End of
Description                                                       of Period      Expenses    Accounts    Deductions        Period
-----------                                                       ----------    ----------   --------    ----------       --------

Year ended 12-29-00


<S>                                                                   <C>          <C>           <C>        <C>      <C>    <C>
 Reserves and allowances deducted from asset accounts:
    Allowance for doubtful accounts                                   $1,254       $ (184)       $  -       $    50  (1)   $1,020
     Allowance for discounts and other deductions                      2,959        3,570           -         4,134 (2)     2,395
                                                                      ------       ------        ----        ------        ------
                                                                      $4,213       $3,386        $  -        $4,184        $3,415
                                                                      ======       ======        ====        ======        ======

Period from April 24, 1999 to
   December 31, 1999

   Reserves and allowances deducted from asset accounts:
     Allowance for doubtful accounts                                  $1,113        $  593       $  -        $  452  (1)    $1,254
     Allowance for discounts and other deductions                      2,329         3,128          -         2,498  (2)     2,959
                                                                      ------        ------       ----        ------         ------
                                                                      $3,442        $3,721       $  -        $2,950         $4,213
                                                                      ======        ======       ====        ======         ======

</TABLE>

<TABLE>
<CAPTION>

                                                                                              Predecessor
                                                                  -----------------------------------------------------------------
                                                                                      Additions
                                                                                ---------------------
                                                                    Balance     Charged to    Charged                      Balance
                                                                   Beginning    Costs and    to Other                       End of
Description                                                       of Period      Expenses    Accounts      Deductions      Period
-----------                                                       ----------    ----------   --------      ----------     --------

Period from January 1, 1999 to
   April 23, 1999

 <S>                                                                 <C>           <C>          <C>           <C>     <C>  <C>
 Reserves and allowances deducted from asset accounts:
    Allowance for doubtful accounts                                   $  966        $  464       $  -          $  317  (1)  $1,113
     Allowance for discounts and other deductions                      1,991         1,923          -           1,585  (2)   2,329
                                                                      ------        ------       ----          ------       ------
                                                                      $2,957        $2,387       $  -          $1,902       $3,442
                                                                      ======        ======       ====          ======       ======

Year ended 12-31-98

   Reserves and allowances deducted from asset accounts:
     Allowance for doubtful accounts                                  $1,363        $  212       $  -          $  609  (1)  $  966
     Allowance for discounts and other deductions                      2,098         5,209          -           5,316  (2)   1,991
                                                                      ------        ------       ----          ------       ------
                                                                      $3,461        $5,421       $  -          $5,925       $2,957
                                                                      ======        ======       ====          ======       ======



(1) Accounts written off, net of recoveries
(2) Discounts and deductions taken by customers
</TABLE>

                                       72

<PAGE>

<TABLE>
<CAPTION>


                                INDEX TO EXHIBITS
                                                                                                              Sequentially
Exhibit                                                                                                         Numbered
Number          Description                                                                                       Page
-------         -----------                                                                                   ------------

<S>             <C>                                                                                                    <C>
2.1             Stock Sale and Purchase Agreement for the Registrant, dated April 12, 1989,
                  by, between, and among J. Gray Ferguson, Arthur J. Gajarsa, Joseph F. Hackett
                  and William L. Robbins, III, the Registrant and ASR Acquisition Corp. (A)...............             (2)

2.2             Agreement for Purchase and Sale of Stock, dated April 17, 1989, by and among
                  Howard E. Strauss, Bert Ghavami, and Ardell Acquisition Corp.(A)........................             (2)

2.3             Amendment No. 1 to Agreement for Purchase and Sale of Stock, dated April
                  28, 1989, by and among Howard E. Strauss, Bert Ghavami, and Ardell
                  Acquisition Corp........................................................................             (2)

2.4             Agreement for Purchase and Sale of Stock of Megas Beauty Care, Inc. dated
                  May 16, 1994 between Megas Holdings, Inc. and Robert Bender (A).........................             (3)

2.5             Stock Purchase Agreement dated February 7, 1995, by and among Sterile Products
                  Holdings, Inc. and C. C. (Jack) Van Noy, George P. Goemans, Tamalpais
                  Capital, and Newtek Venture (A).........................................................             (4)

2.6             Asset Purchase Agreement, dated as of March 6, 1996, by and among
                  MLO Razor Company (1996) Ltd. ("Purchaser"), and Bond-America
                  Israel Blades Ltd. ("Seller"), Nostrum Establishment and Kaftor
                  VePerach Ltd., the stockholders of Seller (individually each an
                  "Owner" and collectively, the "Owners") and Robert Mandel, Daniel
                   -----                         ------
                  Mandel, Alfred Mernone, Shulamit Weiman, Noam Weiman, Efrat
                  Gershoni and Ayin Mor Ltd. (individually each a "Beneficial Owner"
                                                                   ----------------
                  and collectively the "Beneficial Owners" and together with the
                                        -----------------
                  Owners, the "Stockholders"). (A)........................................................             (7)
                               ------------

2.7             Amendment No. 1 to Asset Purchase Agreement (the "Amendment"),
                  dated as of March 25, 1996, by and among Bond Blades International
                  Ltd. (formerly known as MLO Razor Company (1996) Ltd.), ("Purchaser"),
                                                                            ---------
                  and Bond-America Israel Blades Ltd., ("Seller"), Nostrum Establishment
                                                         ------
                  and Kaftor VePerach Ltd., the stockholders of Seller (individually each
                  an "Owner" and collectively, the "Owners") and Robert Mandel,
                      -----                         ------
                  Daniel Mandel, Alfred Mernone, Shulamit Weiman, Noam Weiman, Efrat
                  Gershoni and Ayin Mor Ltd. (individually each a "Beneficial Owner"
                                                                   ----------------
                  and collectively the "Beneficial Owners" and together with the
                                        -----------------
                  Owners, the "Stockholders").............................................................             (7)
                               ------------

2.8             Asset Purchase Agreement, dated as of March 6, 1996, by and among
                  American Safety Razor Company ("Purchaser"), and A.I. Blades, Inc.
                                                  ---------
                  ("Seller") and Bond-America Israel Blades, Ltd., the sole stockholder
                    ------
                  of Seller ("Bond"), Nostrum Establishment and Kaftor VePerach Ltd.,
                              ----
                  Robert Mandel, Daniel Mandel, Alfred Mernone, Shulmait Weiman,
                  Noam Weiman, Efrat Gershoni and Ayin Mor Ltd. (individually each
                  a "Beneficial Owner" and collectively the "Beneficial Owners" and
                     ----------------                        -----------------
                  together with Bond, the "Stockholders").  (A)...........................................             (7)
                                           ------------

</TABLE>

                                       73

<PAGE>

<TABLE>
<CAPTION>


                                                                                                              Sequentially
Exhibit                                                                                                         Numbered
Number          Description                                                                                       Page
-------         -----------                                                                                   ------------

<S>             <C>                                                                                                   <C>
2.9             Amendment No. 1 to Asset Purchase Agreement (the "Amendment"),
                  dated as of March 25, 1996, by and among American Safety Razor
                  Company ("Purchaser"), and A.I. Blades, Inc. ("Seller") and
                            ---------                            ------
                  Bond-America Israel Blades Ltd., the sole stockholder of Seller
                  ("Bond"), Nostrum Establishment and Kaftor VePerach Ltd.,
                    ----
                  Robert Mandel, Daniel Mandel, Alfred Mernone, Shulamit Weiman,
                  Noam Weiman, Efrat Gershoni and Ayin Mor Ltd. (individually each
                  a "Beneficial Owner" and collectively the "Beneficial Owners" and
                     ----------------                        -----------------
                  together with Bond, the "Stockholders").................................................             (7)
                                           ------------

2.10            Agreement and Plan of Merger, dated as of February 12, 1999 by and
                  among RSA Holdings Corp. of Delaware, RSA Acquisition Corp. and
                  American Safety Razor Company. (A)......................................................             (9)

2.11              Amendment  Agreement,  dated  as of  April  8,  1999,  to  the
                  Agreement  and Plan of Merger,  dated as of February 12, 1999,
                  by and among RSA Holdings Corp.
                  of Delaware, RSA Acquisition Corp. and American Safety Razor Company....................            (10)

2.12            Second Amendment Agreement, dated as of April 23, 1999, to the Agreement
                  and Plan of Merger, dated as of February 12, 1999, by and among RSA Holdings
                  Corp. of Delaware, RSA Acquisition Corp. and American Safety Razor
                  Company.................................................................................            (11)

2.13            Offer to Purchase for Cash all Outstanding Shares of Common Stock of
                  American Safety Razor Company, dated February 22, 1999. ................................             (9)

2.14            Supplement to the Offer to Purchase for Cash all Outstanding Shares of
                  Common Stock of American Safety Razor Company, dated April 13, 1999.....................            (10)

3.1             Amended and Restated Certificate of Incorporation of the Registrant.......................             (1)

3.2             Amended and Restated By-laws of the Registrant............................................             (1)

4.1             Specimen of Stock Certificate.............................................................             (2)

4.2             Recapitalization Agreement, dated May 24, 1993, among the Registrant and its
                  Stockholders............................................................................             (1)

4.3             Subscription Agreement, dated April 28, 1989, by and among the Registrant, JZCC
                  and Allsop..............................................................................             (2)

4.4             Registration Rights Agreement, dated as of August 3, 1995, among the Registrant,
                  the Guarantors and the Initial Purchasers, relating to the Senior Notes.................             (6)

4.5             Indenture governing the Senior Notes, dated as of August 3, 1995, by and among
                  the Registrant, the Guarantors and the Trustees.........................................             (5)

4.6             Preferred Stock Exchange Agreement, dated June 14, 1993, among the Registrant and
                  the holders of Preferred Stock..........................................................             (1)

4.7             Common Stock Conversion Agreement, dated May 24, 1993, among the Registrant and
                  the holders of Common Stock.............................................................             (1)
</TABLE>


                                       74

<PAGE>

<TABLE>
<CAPTION>


                                                                                                              Sequentially
Exhibit                                                                                                         Numbered
Number          Description                                                                                       Page
-------         -----------                                                                                   ------------

<S>             <C>                                                                                                   <C>
4.8(a)          Stockholders Agreement, dated April 14, 1989, between the Registrant and its
                  Stockholders............................................................................             (2)

4.8(b)          Shareholder's Agreement, dated February 12, 1999, among RSA Holdings Corp. of
                  Delaware, RSA Acquisition Corp., and Principal Holders..................................            (10)

4.9             First Amendment to the Stockholders Agreement, dated April 28, 1989, between the
                  Registrant and its Stockholders.........................................................             (2)

4.10            Second Amendment to the Stockholders Agreement, dated December 29, 1992, between
                  the Registrant and its Stockholders ....................................................             (2)

4.11            Third Amendment to the Stockholders Agreement, dated June 15, 1993, among the
                  Registrant and certain of its Stockholders..............................................             (1)

4.12            $2,500,000 Subordinated Secured Note, due June 10, 2000, executed by Megas
                  Holdings, Inc. in favor of Robert Bender................................................             (3)

4.13            Junior Security Agreement, dated June 10, 1994, by Megas Beauty Care, Inc. (formerly
                  Megas Holdings, Inc.) in favor of Robert Bender.........................................             (4)

4.14            Multicurrency Credit Agreement, dated as of August 3, 1995, among the Registrant, the
                  Guarantors and First National Bank of Chicago, as agent, including exhibits.............             (5)

4.15            Guarantees of the Guarantors pursuant to the Multicurrency Credit Agreement...............             (6)

4.16            Security Agreement, dated August 3, 1995, between the Registrant and First National
                  Bank of Chicago, as agent, including schedules..........................................             (6)

4.17            Guarantor Security Agreements, dated August 3, 1995, by and among the Guarantors
                  and First National Bank of Chicago, as agent, including schedules.......................             (6)

4.18            $190,000,000 Credit Agreement, dated as of April 23, 1999, among RSA Acquisition Corp.,
                  ("Purchaser"), the Registrant ("Borrower"), RSA Holdings Corp. of Delaware ("Holdings"),
                  and the Initial Lenders, The Swing Line Bank and Initial Issuing Bank and NationsBank,
                  N.A. ("Administrative Agent")...........................................................            (13)

4.19            Amendment No. 1 to the Credit Agreement dated as of April 23, 1999, among RSA Acquisition
                  Corp., ("Purchaser"), the Registrant ("Borrower"), RSA Holdings Corp. of Delaware ("Holdings"),
                  and the Initial Lenders, the Swing Line Bank and the Initial Issuing Bank and NationsBank,
                  N.A. ("Administrative Agent")...........................................................            (14)

4.20            Amendment No. 2 to the Credit Agreement dated as of March 28, 2001, among the Registrant
                  ("Borrower"), RSA Holdings Corp. of Delaware ("Holdings"), and the Lenders, the Issuing
                  Bank and Swing Line Bank, the Syndication Agent, the Co-Arrangers and Bank of America
                  ("Administrative Agent")................................................................

4.21            Credit Agreement, dated as of March 28, 2001, among the Registrant ("Borrower") and Bank of
                  America, N.A. ("Lender")................................................................

10.1(a)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and William C. Weathersby (B)................................................             (1)

</TABLE>

                                       75

<PAGE>

<TABLE>
<CAPTION>


                                                                                                              Sequentially
Exhibit                                                                                                         Numbered
Number          Description                                                                                       Page
-------         -----------                                                                                   ------------

<S>             <C>                                                                                                    <C>
10.1(b)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and William L. Robbins (B)...................................................             (1)

10.1(c)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and George L. Pineo (B)......................................................             (1)

10.1(d)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and Gary S. Wade (B).........................................................             (1)

10.1(e)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and Joseph F. Hackett (B)....................................................             (1)

10.1(f)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and Thomas G. Kasvin (B).....................................................             (1)

10.1(g)         Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and Thomas B. Boyd (B).......................................................             (1)

10.1.(h)        Non-Disclosure/Non-Compete Agreement, dated June 15, 1993, between the
                  Registrant and Bruce L. Stichter (B)....................................................             (1)

10.2(a)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  Thomas H. Quinn (B).....................................................................             (1)

10.2(b)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  William C. Weathersby (B)...............................................................             (1)

10.2(c)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  Jonathan F. Boucher (B).................................................................             (1)

10.2(d)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  John W. Jordan, II (B)..................................................................             (1)

10.2(e)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  David W. Zalaznick (B)..................................................................             (1)

10.2(f)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  John R. Lowden (B)......................................................................             (1)

10.2(g)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  Paul D. Rhines (B)......................................................................             (1)

10.2(h)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  D. Patrick Curran (B)...................................................................             (1)

10.2(i)         Indemnification Agreement, dated June 15, 1993, between the Registrant and
                  William C. Ballard, Jr. (B).............................................................             (1)

10.3(a)         Financial Advisory Agreement, dated July 12, 1995, between the Registrant and
                  TJC Management Corp.....................................................................             (6)

10.3(b)         Amended and Restated Financial Advisory Agreement, dated February 12, 1999,
                  between the Registrant and TJC Management Corp..........................................            (12)
</TABLE>

                                       76

<PAGE>

<TABLE>
<CAPTION>


                                                                                                              Sequentially
Exhibit                                                                                                         Numbered
Number          Description                                                                                       Page
-------         -----------                                                                                   ------------

<S>             <C>                                                                                                   <C>
10.4            Settlement Agreement, dated June 5, 1992, by and between Warner-Lambert
                  Company and the Registrant..............................................................             (2)
10.5            Administrative Consent Order, dated March 13, 1989, between the Registrant
                  and the New Jersey Department of Environmental Protection and Energy....................             (2)

10.6(a)         Employment Agreement, dated March 3, 1995, by and between Sterile Products
                Holdings, and Sterile Products Corporation and C. C. Van Noy (B)..........................             (4)

10.6(b)         Employment Protection Agreement, dated December 8, 1997, by and between the
                Registrant and William C. Weathersby (B)..................................................             (8)

10.6(c)         Employment Protection Agreement, dated December 8, 1997, by and between the
                Registrant and James V. Heim (B)..........................................................             (8)

10.6(d)         Employment Protection Agreement, dated December 8, 1997, by and between the
                Registrant and Thomas G. Kasvin (B).......................................................             (8)

10.7            The American Safety Razor Company Stock Option Plan.......................................             (1)

10.8            Confidentiality Agreement dated as of December 4, 1997 between PaineWebber
                  Incorporated and J. W. Childs Associates, L.P...........................................            (10)

10.9            Confidentiality Agreement dated as of January 12, 1999 between PaineWebber
                  Incorporated and J. W. Childs Associates, L.P...........................................            (10)

10.10           RSA Holdings Corp. of Delaware 1999 Stock Incentive Plan..................................            (14)

10.11           Employment Agreement, dated August 9, 1999, by and between the Registrant and
                  James D. Murphy (B)

16              Letter re Change in Certifying Accountant.................................................       (4), (15)

21              List of Subsidiaries of the Registrant
</TABLE>


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

(1)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-K for the fiscal year ended December 31, 1993.

(2)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     S-1 Registration Statement (No. 33-60298).

(3)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     8-K/A,  dated June 10, 1994  relating to the  acquisition  of Megas  Beauty
     Care, Inc.

(4)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-K for the fiscal year ended December 31, 1994.

(5)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     8-K, dated August 15, 1995.

(6)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     S-4 Registration Statement (No. 33-96046).

(7)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-Q for the quarter ended March 31, 1996.

(8)  Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-K/A for the fiscal year ended

                                       77

<PAGE>



     December 31, 1997.

(9)  Incorporated  by  reference  to the  exhibits  filed with the  Registrant's
     Schedule 14D-9, dated February 22, 1999.

(10) Incorporated  by  reference  to the  exhibits  filed with the  Registrant's
     Schedule 14D-9, dated April 13, 1999.

(11) Incorporated  by  reference  to the  exhibits  filed with the  Registrant's
     Schedule 14D-1, dated April 23, 1999.

(12) Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-K for the fiscal year ended December 31,
              1998.

(13) Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-K for the fiscal year ended December 31, 1999.

(14) Incorporated by reference to the exhibits filed with the Registrant's  Form
     10-Q for the quarter ended June 30, 2000.

(15) Incorporated by reference to the exhibits filed with the Registrant's  Form
     8-K, dated April 20, 2000.

(A)  Disclosure  schedules relating to the  representations  and warranties have
     not  been  filed;  such  schedules  will be filed  supplementally  upon the
     request of the Securities and Exchange Commission.

(B)  This exhibit is a management  contract or compensatory  plan or arrangement
     required to be  identified in this Form 10-K pursuant to Item 14(c) of this
     Report.


                                       78

<PAGE>


                                                                     Exhibit 21


LIST OF SUBSIDIARIES OF THE REGISTRANT (1):

Subsidiary

American Safety Razor Corporation

American Safety Razor Australia PTY Limited

American Safety Razor do Brasil, Ltda.

American Safety Razor of Canada Limited

ASR Holdings, Inc.

The Hewitt Soap Company, Inc.

Industrias Manufactureras ASR de Puerto Rico, Inc.

Megas Beauty Care, Inc.

Megas de Puerto Rico, Inc.

Personna International de Mexico, S.A. de C.V.

Personna International Limited

Personna International UK Limited

Personna International de Puerto Rico, Inc.

Personna International Israel, Ltd.

Valley Park Realty, Inc.

Wolco Holland B.V.




(1) Each subsidiary is 100% owned by the Company or certain of its subsidiaries.