SECURITIES AND EXCHANGE  COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


  Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934



   For the Quarterly Period Ended March 31, 2001

   Commission File No. 1-4436


THE STEPHAN CO.
(Exact Name of Registrant as Specified in its Charter)



               Florida                               59-0676812
   (State or Other Jurisdiction of               (I.R.S Employer
   Incorporation or Organization)               Identification No.)


   1850  West McNab Road, Fort Lauderdale, Florida     33309
      (Address of principal executive offices)       (Zip Code)


Registrant's Telephone Number, including Area Code: (954) 971-0600


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       NO X


                (APPLICABLE ONLY TO CORPORATE ISSUERS)


Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.



         Approximate number of shares of Common Stock outstanding
                          as of May 31, 2001:


                              4,410,577



                       THE STEPHAN CO. AND SUBSIDIARIES
                    QUARTERLY REPORT PURSUANT TO SECTION 13
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                              MARCH 31, 2001


                                    INDEX

                                                               PAGE NO.
PART I.    FINANCIAL INFORMATION

           ITEM 1.  Financial Statements

           Unaudited Condensed Consolidated Balance Sheets
           as of March 31, 2001 and December 31, 2000            4-5

           Unaudited Condensed Consolidated Statements
           of Operations for the three months ended
           March 31, 2001 and (restated) March 31, 2000           6

           Unaudited Condensed Consolidated Statements of
           Cash Flows for the three months ended
           March 31, 2001 and (restated) March 31, 2000          7-9

           Notes to Unaudited Condensed Consolidated
           Financial Statements                                 10-14

           ITEM 2.    Management's Discussion and Analysis
                      of Financial Condition and
                      Results of Operations.                    15-16

           ITEM 3.    Quantitative and Qualitative
                      Disclosure About Market Risk                16


SIGNATURES                                                        17


















                                  2



                        THE STEPHAN CO. AND SUBSIDIARIES
                    QUARTERLY REPORT PURSUANT TO SECTION 13
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                MARCH 31, 2000


CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
    PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



     This report contains certain "forward-looking" statements.  The
Stephan Co. and its subsidiaries (the "Company") desires to take advantage
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995 and is including this statement for the express purpose of
availing itself of the protections of such safe harbor with respect to all
such forward-looking statements.  Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause
the actual results, condition (financial or otherwise), performance, trends
or achievements of the Company and its subsidiaries to be materially
different from any future results, performance, condition or achievements
projected, anticipated or implied by such forward-looking statements.

     Such factors include, but are not limited to, the following: general
economic and business conditions; competition; success of operating
initiatives; development and operating costs; advertising and promotional
efforts; brand awareness; the existence or absence of adverse publicity;
acceptance of new product offerings; changing trends in customer tastes;
the success of multi-branding; changes in business strategy or development
plans; quality of management; availability, terms and deployment of
capital; business abilities and judgment of personnel; availability of
qualified personnel; labor and employee benefit costs; availability and
cost of raw materials and supplies; changes in, or failure to comply with,
law; the ability to successfully integrate new businesses and the ability
to reduce costs; changes in product mix and associated gross profit
margins; the final outcome of litigation commenced against the Company in
respect of its overstatement of operating results for 1998 interim periods
and any risks, uncertainties and problems inherent in such litigation; and
other factors or events referenced in this Form 10-Q.  The Company does not
undertake any obligation to publicly release the results of any revisions
which may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.

     Therefore, the Company cautions each reader of this report to
carefully consider the specific factors and qualifications discussed herein
with respect to such forward-looking statements, as such factors could
affect the ability of the Company to achieve its objectives and may cause
actual results to differ materially from those projected or anticipated
herein.



                                  3


                       THE STEPHAN CO. AND SUBSIDIARIES
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS




                                   ASSETS




                                               March 31,     December 31,
                                                 2001            2000
                                             ____________    ____________

CURRENT ASSETS

 Cash and cash equivalents                   $ 13,955,879    $ 13,559,268

 Accounts receivable                            2,593,627       3,026,553

 Inventories                                   10,380,824      10,377,851

 Income taxes receivable                          831,673       1,028,112

 Prepaid expenses and other
  current assets                                  263,257         207,061
                                             ____________    ____________

   TOTAL CURRENT ASSETS                        28,025,260      28,198,845

PROPERTY, PLANT AND EQUIPMENT, net              2,542,803       2,617,521

INTANGIBLE ASSETS, net                         24,488,114      24,736,603

OTHER ASSETS                                    3,148,013       3,215,848
                                             ____________    ____________

   TOTAL ASSETS                              $ 58,204,190    $ 58,768,817
                                             ============    ============










    See notes to unaudited condensed consolidated financial statements


                                  4


                      THE STEPHAN CO. AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                   LIABILITIES AND STOCKHOLDERS' EQUITY


                                             March 31,       December 31,
                                               2001              2000
                                            ___________      ____________
CURRENT LIABILITIES

 Accounts payable and
  accrued expenses                         $  2,468,295      $  3,001,720

 Current portion of
  long-term debt                              9,125,685         1,519,277
                                           ____________      ____________

   TOTAL CURRENT LIABILITIES                 11,593,980         4,520,997

DEFERRED INCOME TAXES                         1,737,045         1,677,805

LONG-TERM DEBT                                1,127,885         9,123,929
                                           ____________      ____________

   TOTAL LIABILITIES                         14,458,910        15,322,731
                                           ____________      ____________

STOCKHOLDERS' EQUITY

  Common stock, $.01 par value                   44,106            44,269
  Additional paid in capital                 18,417,081        18,477,341
  Retained earnings                          26,635,656        26,336,463
                                           ____________      ____________
                                             45,096,843        44,858,073
  LESS:125,000 CONTINGENTLY
        RETURNABLE SHARES                    (1,351,563)       (1,351,563)
       TREASURY STOCK (16,320 shares
        at December 31, 2000)                      -              (60,424)
                                           ____________      ____________
  TOTAL STOCKHOLDERS' EQUITY                 43,745,280        43,446,086
                                           ____________      ____________
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                     $ 58,204,190      $ 58,768,817
                                           ============      ============




    See notes to unaudited condensed consolidated financial statements


                                  5


                    THE STEPHAN CO. AND SUBSIDIARIES
         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



                                             Three Months Ended March 31,
                                             ____________________________
                                                 2001             2000
                                                             (AS RESTATED,
                                                              SEE NOTE 1)
                                             ___________      ___________

NET SALES                                    $ 7,580,368      $ 8,090,879

COST OF GOODS SOLD                             4,222,480        4,434,481
                                             ___________      ___________

GROSS PROFIT                                   3,357,888        3,656,398

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                      2,729,383        2,724,662
                                             ___________     ____________

OPERATING INCOME                                 628,505          931,736

OTHER INCOME(EXPENSE)
  Interest income                                176,317          148,353
  Interest expense                              (205,015)        (226,452)
  Other                                           43,750           43,750
                                             ___________      ___________

INCOME BEFORE INCOME TAXES                       643,557          897,387

INCOME TAXES                                     256,152          337,525
                                             ___________      ___________

NET INCOME                                   $   387,405      $   559,862
                                             ===========      ===========

BASIC AND DILUTED EARNINGS PER SHARE         $       .09      $       .13
                                             ===========      ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING                          4,285,577        4,442,745
                                             ===========      ===========





    See notes to unaudited condensed consolidated financial statements


                                  6


                      THE STEPHAN CO. AND SUBSIDIARIES
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                            Three Months Ended March 31,
                                            ____________________________
                                                 2001            2000
                                                            (AS RESTATED,
                                                             SEE NOTE 1)
                                             ___________     ___________
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income                                  $   387,405     $   559,862
                                             ___________     ___________
 Adjustments to reconcile net income to
  cash flows used in
  operating activities:

   Depreciation                                   96,744         132,941

   Amortization of goodwill                      297,558         265,906

   Amortization of other assets                   29,174          29,894

   Deferred income taxes                          59,240          61,563

   Provision for doubtful accounts                 5,915           6,050

   Changes in operating assets and
   liabilities:

     Accounts receivable                         427,012        (350,359)

     Inventories                                  (2,973)       (249,443)

     Income taxes receivable                     196,439        (135,504)

     Prepaid expenses
      and other current assets                   (56,196)        (54,608)

     Other assets                                 38,661         561,881

     Accounts payable and
      accrued expenses                          (533,425)        (29,457)
                                             ____________    ____________

     Total adjustments                           558,149         238,864
                                             ____________    ____________
Net cash flows provided
 by operating activities                         945,554         798,726
                                             ____________    ____________


                                  7


                       THE STEPHAN CO. AND SUBSIDIARIES
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



                                            Three Months Ended March 31,
                                            ____________________________

                                                 2001             2000
                                                             (AS RESTATED,
                                                              SEE NOTE 1)
                                             ___________      ___________
CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of property, plant
  and equipment                                  (22,026)         (70,189)

 Purchase of intangible assets                   (49,069)            -
                                             ____________      ___________

Net cash flows used in
 investing activities                            (71,095)         (70,189)
                                             ___________      ___________
CASH FLOWS FROM FINANCING ACTIVITIES:

 Repayments of long-term debt                   (389,636)        (392,212)

 Acquisition of treasury stock                      -             (35,993)

 Dividends paid                                  (88,212)         (91,347)
                                             ___________      ___________
Net cash flows used in
 financing activities                           (477,848)        (519,552)
                                             ___________      ___________
INCREASE IN CASH AND
 CASH EQUIVALENTS                                396,611          208,985

CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD                          13,559,268       12,079,204
                                             ___________      ___________
CASH AND CASH EQUIVALENTS,
 END OF PERIOD                               $13,955,879      $12,288,189
                                             ===========      ===========





    See notes to unaudited condensed consolidated financial statements




                                  8


                       THE STEPHAN CO. AND SUBSIDIARIES
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE THREE MONTHS ENDED MARCH 31, 2001





Supplemental Disclosures of Cash Flow Information:



          Interest Paid                      $   189,268      $   247,718
                                             ===========      ===========


          Income Taxes Paid                  $      -         $   685,000
                                             ===========      ===========



     For the quarter ended March 31, 2001, 16,320 shares of treasury stock,
with a cost of $60,424 were retired, and for the quarter ended March 31,
2000, 93,600 shares of treasury stock, with a cost of $362,726, were
retired.
























    See notes to unaudited condensed consolidated financial statements



                                   9


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2001 AND 2000

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION:    In the opinion of management, all
adjustments necessary for a fair presentation of financial position and
results of operations are reflected in these unaudited interim financial
statements.

     The results of operations for the three-month period ended March 31,
2001 is not necessarily indicative of the results to be expected for the
year ending December 31, 2001.  The December 31, 2000 condensed
consolidated balance sheet was derived from the audited consolidated
financial statements, but does not include all disclosures required by
GAAP.  These interim financial statements should be read in conjunction
with the consolidated financial statements and accompanying notes thereto
for the year ended December 31, 2000 appearing in the Company's Form 10-K
filed with the Securities and Exchange Commission.

     In November 2000, the Company became aware of certain irregularities
involving the improper recording of sales during the period 1998 through
2000.  The Company's Audit Committee commenced an investigation utilizing
outside counsel and a "Big 5" accounting firm other than the Company's
independent auditors.  The investigation was completed in April 2001, and
the results of the investigation indicated that no cash or other property
was misappropriated and the irregularities were committed by an employee of
a subsidiary who is no longer employed by the Company.  Based upon the
findings of the investigation, it was determined that during the period
1998 through 2000, net sales were overstated by approximately $1,379,000.
As a result, the Company has restated its unaudited condensed consolidated
financial statements for the quarter ended March 31, 2000 from amounts
previously reported.  The following is a summary of the significant effects
of the restatement for the three months ended March 31, 2000:


                                                          As Previously
                                            As Restated     Reported
                                            ___________________________

       Net sales                            $ 8,090,879    $ 8,202,562
       Cost of goods sold                     4,434,481      4,537,157
       Gross Profit                           3,656,398      3,665,405
       Operating income                         931,736        940,743

       Income before taxes                      897,387        906,394
       Income taxes                             337,525        340,947
       Net income                               559,862        565,447
       Basic and diluted earnings per share         .13            .13



                                   10


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      QUARTERS ENDED MARCH 31, 2001 AND 2000


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


          NATURE OF OPERATIONS:  The Company is engaged in the manufacture,
sale, and distribution of hair and personal care grooming products
throughout the United States. Statement of Financial Accounting Standards
No. 131, "Disclosures About Segments of an Enterprise and Related
Information", requires the reporting of segment information using a
"management approach" as it relates to the operating segments of a
business.  The Company has allocated substantially all of its business into
three segments, which are professional hair care products and distribution,
retail personal care products and manufacturing.

          USE OF ESTIMATES:  The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in
the United States of America ("generally accepted accounting principles")
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

         REVENUE RECOGNITION:  Revenue is recognized when all significant
contractual obligations have been satisfied, which involves the delivery of
manufactured goods and reasonable assurance as to the collectability of the
resulting account receivable.  In December 1999, the Securities and
Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" ("SAB 101"), providing guidance on
recognition of income, presentation and disclosure of revenues in the
financial statements.  The Company believes that its revenue recognition
policies are in conformity with the guidance provided in SAB 101.

         CASH AND CASH EQUIVALENTS:    Cash and cash equivalents include
cash, certificates of deposit, and short-term municipal bonds having
maturities of 90 days or less.    The Company maintains cash deposits at
certain financial institutions in amounts in excess of federally insured
limits of $100,000.  Cash and cash equivalents held in interest bearing
accounts as of March 31, 2001 and December 31, 2000 were approximately
$13,789,000 and $12,995,000, respectively.

         INVENTORIES:  Inventories are stated at the lower of cost
(determined on a first-in, first-out basis) or market.






                                   11


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      QUARTERS ENDED MARCH 31, 2001 AND 2000


NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


INVENTORIES (continued)

Inventories were as follows:

                                        March 31,          December 31,
                                          2001                 2000
                                      ____________         ____________
Raw materials                         $  2,593,146         $  2,620,048
Packaging and components                 3,700,223            3,700,758
Work in progress                           697,841              703,571
Finished goods                           6,273,748            6,284,531
                                      ____________         ____________
                                        13,264,958           13,308,908
Less: Amount included in
      other assets                      (2,884,134)          (2,931,057)
                                      ____________         ____________

                                      $ 10,380,824         $ 10,377,851
                                      ============         ============

     Raw materials include surfactants, chemicals and fragrances used in
the Company's production process.  Packaging materials include cartons,
inner sleeves  and boxes used in the actual product, as well as outer boxes
and cartons used for shipping purposes.  Components are the actual bottles
or containers (plastic or glass), jars, caps, pumps and similar materials
that will be part of the finished product.  Finished goods include hair
dryers, electric clippers, lather machines, scissors and salon furniture.

     Included in other assets are raw materials, packaging and components
inventory not anticipated to be utilized in less than one year.

         BASIC AND DILUTED EARNINGS PER SHARE:  Basic and diluted earnings per
share are computed by dividing net income by the weighted average number of
shares of common stock outstanding.  The weighted average number of shares
outstanding was 4,285,577 for the quarter ended March 31, 2001 and
4,442,745 for the quarter ended March 31, 2000.  For the quarters ended
March 31, 2001 and 2000, the Company had 809,524 and 576,625 outstanding
stock options, respectively.  None of these options were included in the
calculation of earnings per share because their inclusion would be anti-
dilutive.

         NEW FINANCIAL ACCOUNTING STANDARDS:  In June 1998, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities."  Among other provisions,

                                   12


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2001 AND 2000

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

SFAS No. 133  establishes accounting and reporting standards for derivative
instruments and for hedging activities.  It also requires that an entity
recognize all derivatives as either assets or liabilities in the statement
of financial position and measure those instruments at fair value.  In July
1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities-Deferral of the Effective Date of FASB No. 133" and,
in June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities", which are effective
for financial statements for fiscal years beginning after June 15, 2000.
The adoption of these statements on January 1, 2001 did not have a
significant effect on the Company's financial position, results of
operations or cash flows.

NOTE 2: SEGMENT INFORMATION

     In accordance with the guidelines established by SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," the
Company has identified three reportable operating segments based upon how
management evaluates its business.  These segments are Professional Hair
Care Products and Distribution ("Professional"), Retail Personal Care
Products ("Retail") and Manufacturing.  The Professional segment generally
has as a customer base distributors that purchase the Company's hair
products and beauty and barber supplies for sale to salons and barbershops.
The customer base for the Retail segment is mass merchandisers, chain drug
stores and supermarkets that sell products to end-users. The Manufacturing
segment manufactures products for different subsidiaries of the Company,
and also manufactures private label brands for customers.

     The Company conducts operations primarily in the United States and
sales to international customers are not material to its consolidated net
sales. Income Before Income Taxes as shown below reflects an allocation of
corporate overhead expenses incurred by the Manufacturing segment.  The
following tables, in thousands, summarize Net Sales and Income Before
Income Taxes by reportable segment:
                                                   INCOME BEFORE
                               NET SALES           INCOME TAXES
                            _______________       _______________

                             Quarter Ended         Quarter Ended
                               March 31,             March 31,
                              2001    2000         2001     2000
                            _______________       _______________
Professional                $ 4,948 $ 5,237       $  239   $  367
Retail                        1,628   2,466          256      324
Manufacturing                 2,644   1,791          311      291
                            _______ _______       ______  _______
   Total                      9,220   9,494          806      982

                                   13

                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2001 AND 2000


NOTE 2: SEGMENT INFORMATION (continued)

                                                   INCOME BEFORE
                               NET SALES           INCOME TAXES
                            _______________       _______________

                             Quarter Ended         Quarter Ended
                               March 31,             March 31,
                              2001    2000         2001     2000
                            _______________       _______________


Intercompany
  Manufacturing              (1,640) (1,403)        (162)     (85)
                            _______ _______       ______  _______
   Consolidated             $ 7,580 $ 8,091       $  644  $   897
                            ======= =======       ======  =======

NOTE 3: LONG TERM DEBT

     The Company is subject to various financial covenants with respect to
working capital, current maturity coverage and funded debt ratios under the
loan agreements with a bank.  At March 31, 2001, the Company was not in
compliance with the current maturity coverage and funded debt ratios, but
is currently in discussions with the bank to obtain a waiver for such non-
compliance.  The long-term portion of the debt ($7,492,500 at March 31,
2001) has been classified as current until such time as a waiver is
received from the bank or the loan is refinanced.





















                                   14



                   THE STEPHAN CO. AND SUBSIDIARIES
               QUARTERLY REPORT PURSUANT TO SECTION 13
                OF THE SECURITIES EXCHANGE ACT OF 1934
                       MARCH 31, 2001 AND 2000

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

     The Company's unaudited condensed consolidated financial statements
for the quarter ended March 31, 2000 have been restated as more fully
discussed in Note 1 to the financial statements.  The information included
in the following discussion reflects the effects of the restatement.

RESULTS OF OPERATIONS

     For the quarter ended March 31, 2001, net income decreased $173,000 to
$387,000, from the $560,000 achieved in the comparable quarter of 2000,
principally as a result of a general decline in net sales.  Net sales for
the first quarter of 2001 decreased approximately $511,000, declining to
$7,580,000, compared to sales of $8,091,000 for the first quarter of 2000.
This decrease was primarily due to a decline in the net sales of the Retail
and Professional lines that was not completely offset by increased private
label sales.  Management has taken steps that it believes will ultimately
increase revenues by restructuring its sales organization and hiring
additional sales professionals who it believes can increase the level of
sales of the retail lines.  The Company also plans to increase the amount
of expenditures for advertising and promotion of its retail brands in an
effort to increase market exposure.  Management believes these changes will
create better penetration into the existing market for the retail brands,
thereby increasing net sales.

     Earnings per share decreased from $.13 in the first quarter of 2000 to
$.09 for the first quarter ended March 31, 2001.  As a result of the
Company's continuing purchase of shares of common stock, the weighted
average number of shares outstanding declined from 4,442,745 for the
quarter ended March 31, 2000 to 4,285,577 for the quarter ended March 31,
2001.

      Overall, the gross profit margin decreased to 44.3% for the first
quarter of 2001 when compared to the 45.2% achieved in the first quarter of
2000.  This decrease was due to a larger volume of private label production
comprising first quarter 2001 sales. Typically, private label production
carries a lower gross margin than Retail or Professional line sales.  Gross
profit decreased by approximately $299,000, to $3,358,000, for the first
quarter of 2001 compared to the first quarter of 2000 due to the decline in
net sales and lower gross profit margins.  Efforts and initiatives to
reduce costs of sales continue with periodic line reviews and evaluations
of suppliers in an effort to reduce production costs.   However, increases
in the cost of chemicals, componentry and transportation as a result of the
protracted upward price pressure experienced with petroleum-based products
will necessitate management to continue to emphasize the importance of cost
reduction strategies.

                                   15


                   THE STEPHAN CO. AND SUBSIDIARIES
               QUARTERLY REPORT PURSUANT TO SECTION 13
                OF THE SECURITIES EXCHANGE ACT OF 1934
                       MARCH 31, 2001 AND 2000

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

     Selling, general and administrative expenses of $2,729,383 for the
first quarter ended March 31, 2001 were comparable to the $2,724,662
incurred in last year's first quarter.  While Federal and state income
taxes for the quarter ended March 31, 2001 declined over $81,000 from the
comparable quarter due to lower earnings, the effective tax rate was
slightly higher due to a change in the mix of invested cash, from tax-free
holdings with a more volatile interest rate to taxable investments which
give a more stable return.

     Interest expense for the first quarter ended March 31, 2001 decreased
$21,000 from the quarter ended March 31, 2000, primarily as a result of the
repayment of a $400,000 note payable to a bank and a reduction in overall
outstanding bank debt.  Interest income increased approximately $28,000 due
to an increase in invested cash.

LIQUIDITY & CAPITAL RESOURCES

     Cash and cash equivalents increased almost $400,000, to $13,956,000 as
of March 31, 2001, when compared to December 31, 2000.  Accounts receivable
decreased $433,000 due to an decrease in Retail and Professional sales.
Inventories remained level, at $10,381,000 at March 31, 2001 when compared
to inventories at December 31, 2000.

     Total current assets at March 31, 2001 were $28,025,000 compared to
$28,199,000 at December 31, 2000.  The Company is subject to various
financial covenants with respect to working capital, current maturity
coverage and funded debt ratios under the loan agreements with a bank.  At
March 31, 2001, the Company was not in compliance with the current maturity
coverage and funded debt ratios, but is currently in discussions with the
bank to obtain a waiver for such non-compliance.  The long-term portion of
the debt ($7,492,500 at March 31, 2001) has been classified as current
until such time as a waiver is received from the bank or the loan is
refinanced.  As a result of the above reclassification, working capital
decreased approximately $7,247,000, to $16,431,000 when compared to
December 31, 2000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company does not participate in derivative or other financial
instruments for which fair value disclosure would be required under
Statement of Financial Accounting Standards No. 107.  In addition, the
Company does not invest in securities that would require disclosure of
market risk, nor does it have floating rate loans or foreign currency
exchange rate risks.


                                  16




                                 SIGNATURES



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



THE STEPHAN CO.




   /s/ Frank F. Ferola
_____________________________________
Frank F. Ferola
President and Chief Executive Officer
July 10, 2001




  /s/ David A. Spiegel
___________________________
David A. Spiegel
Principal Financial and
 Accounting Officer
July 10, 2001




















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