UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the Quarter Ended June 30, 1999

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from ________ to ___________


                        Commission File Number 000-21952


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



         Delaware                                     54-1050207
(State of incorporation)                (I.R.S. Employer Identification Number)


     One Razor Blade Lane,
         P.O. Box 979,
  Verona, Virginia 24482-0979
(Address of principal executive                     (540) 248-8000
   offices, including zip code)              Registrant's telephone number





Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                                  Yes [x] No [ ]



Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of August 2, 1999.

         Class                                  Outstanding at August 2, 1999

Common Stock, $.01 Par Value                             12,110,349



<PAGE>





                          AMERICAN SAFETY RAZOR COMPANY


                                      Index
<TABLE>
<CAPTION>


                                                                                                            Page Number

Part I.           Financial Information
<S>               <C>                                                                                             <C>

    Item 1.       Financial Statements

                  Condensed Consolidated Balance Sheets                                                           1

                  Condensed Consolidated Statements of Operations (Unaudited)                                     3

                  Condensed Consolidated Statements of Comprehensive Income (Unaudited)                           4

                  Condensed Consolidated Statements of Cash Flows (Unaudited)                                     5

                  Notes to Condensed Consolidated Financial Statements                                            6

    Item 2.       Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                                                            20

    Item 3.       Quantitative and Qualitative Disclosure of Market Risk                                         30


Part II.          Other Information

    Item 1.       Legal Proceedings                                                                              31

    Item 6.       Exhibits and Reports on Form 8-K                                                               31

Signatures                                                                                                       32
</TABLE>



<PAGE>





                          AMERICAN SAFETY RAZOR COMPANY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>



                                                                                Company               Predecessor
                                                                            --------------          ---------------
                                                                                 June 30,              December 31,
                                                                                   1999                    1998
                                                                            --------------          ---------------
                                                                               (Unaudited)
<S>                                                                                <C>                       <C>

ASSETS

Current assets:
    Cash and cash equivalents                                                    $  2,346                 $  3,453
    Trade receivables, net                                                         42,850                   44,498
    Inventories                                                                    59,892                   54,029
    Income taxes receivable                                                         2,149                      989
    Deferred income taxes                                                           6,153                    5,108
    Prepaid expenses                                                                2,153                    2,340
                                                                                 --------                 --------

        Total current assets                                                      115,543                  110,417

Property and equipment                                                             95,394                  124,814
Less accumulated depreciation                                                      (2,108)                 (50,149)
                                                                                 --------                 --------
                                                                                   93,286                   74,665

Intangible assets, net:
    Goodwill                                                                      165,766                   68,446
    Other                                                                           9,428                    3,365
                                                                                 --------                 --------
                                                                                  175,194                   71,811

Prepaid pension cost and other                                                     23,182                    6,004
                                                                                 --------                 --------




Total assets                                                                     $407,205                 $262,897
                                                                                 ========                 ========
</TABLE>



See accompanying notes.

                                                        -1-

<PAGE>





                          AMERICAN SAFETY RAZOR COMPANY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)




<TABLE>
<CAPTION>

                                                                                 Company              Predecessor
                                                                            --------------          ---------------
                                                                                June 30,              December 31,
                                                                                  1999                    1998
                                                                            --------------         ----------------
                                                                               (Unaudited)
<S>                                                                                <C>                     <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                             $ 16,208                 $ 14,269
    Accrued expenses and other                                                     21,464                   19,968
    Current maturities of long-term obligations                                     5,569                    3,852
                                                                                ---------                ---------

        Total current liabilities                                                  43,241                   38,089

Long-term obligations                                                             160,598                  123,481
Retiree benefits and other                                                         25,878                   25,163
Deferred income taxes                                                              33,325                    6,610
                                                                                 --------                ---------

Total liabilities                                                                 263,042                  193,343
                                                                                 --------                 --------

Stockholders' equity:
    Common Stock,  $.01 par  value,  25,000,000  shares  authorized;
        12,110,349 shares issued and outstanding at June 30, 1999
       (12,110,049 at December 31, 1998)                                              121                      121
    Additional paid-in capital                                                    172,843                   65,905
    Advances to parent, net                                                       (24,155)                       -
    Retained earnings (accumulated deficit)                                        (4,336)                   4,457
    Accumulated other comprehensive loss                                             (310)                    (929)
                                                                                ---------               ----------
                                                                                  144,163                   69,554
                                                                                 --------                ---------

Total liabilities and stockholders' equity                                       $407,205                 $262,897
                                                                                 ========                 ========
</TABLE>













See accompanying notes.

                                                        -2-

<PAGE>





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


                                                               Company       Predecessor           Predecessor
                                                               --------- -------------------    --------------------
                                                               Period      Period               Period
                                                                from        from      Three      from      Six
                                                               April 24,   April 1,  Months     January 1, Months
                                                               1999 to     1999 to   Ended      1999 to    Ended
                                                               June 30,    April 23, June 30,   April 23,  June 30,
                                                                 1999       1999       1998      1999      1998
                                                               --------- ----------- --------   ------- ------------
<S>                                                               <C>         <C>       <C>       <C>        <C>


Net sales                                                       $59,942   $17,304     $73,751  $87,591    $140,262
Cost of sales:
    Other costs                                                  38,185    11,691      49,951   58,520     96,954
    Purchase accounting adjustment to inventory                   9,008          -          -         -         -
                                                               --------- ----------- --------  -------- ------------

    Gross profit                                                 12,749     5,613      23,800   29,071     43,308

Selling, general and administrative expenses                     13,130     4,922      16,590   21,429     30,111
Amortization of intangibles                                         919       188         633      835      1,264
Special charge                                                        -         -           -        -      1,003
Transaction expenses                                                  -    11,440           -   11,440          -
                                                               --------- ----------- --------   ------- ------------

    Operating income (loss)                                      (1,300)  (10,937)      6,577   (4,633)    10,930

Interest expense                                                  3,972       877       3,104    3,907      6,149
                                                               --------- ----------- --------   ------- ------------

    Income (loss) before income taxes
        and extraordinary item                                   (5,272)  (11,814)      3,473   (8,540)     4,781

Income taxes (benefit)                                           (1,547)   (2,142)      1,379     (842)     1,898
                                                               --------- ----------- --------   ------- ------------

    Income (loss) before extraordinary item                      (3,725)   (9,672)      2,094   (7,698)     2,883

Extraordinary item, net of income tax benefit                       611       118           -       118         -
                                                               --------- ----------- --------   ------- ------------

Net income (loss)                                               $(4,336)  $(9,790)     $2,094  $(7,816)    $2,883
                                                               ========= =========== ========  ======== ============

Basic earnings per share:
    Income (loss) before extraordinary item                      $(0.31)   $(0.80)      $0.17   $(0.64)     $0.24
    Extraordinary item                                            (0.05)    (0.01)          -    (0.01)         -
                                                               --------- ----------- --------   ------- ------------
    Net income (loss)                                            $(0.36)   $(0.81)      $0.17   $(0.65)     $0.24
                                                               ========= =========== ========  ======== ============

    Weighted average number of shares outstanding                12,110    12,110      12,107   12,110     12,105
                                                               ========= =========== ========  ======== ============

Diluted earnings per share:
    Income (loss) before extraordinary item                      $(0.31)   $(0.79)      $0.17   $(0.63)     $0.23
    Extraordinary item                                            (0.05)    (0.01)          -    (0.01)         -
                                                               --------- ----------- --------   ------- ------------
    Net income (loss)                                            $(0.36)   $(0.80)      $0.17   $(0.64)     $0.23
                                                               ========= =========== ========  ======== ============

    Weighted average number of shares outstanding                12,122    12,207      12,234   12,198     12,285
                                                               ========= =========== ========  ======== ============
</TABLE>


See accompanying notes.


                                                        -3-

<PAGE>



      CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
                                 (In thousands)

<TABLE>
<CAPTION>


                                                               Company       Predecessor           Predecessor
                                                               --------- -------------------    --------------------
                                                               Period      Period               Period
                                                                from        from      Three      from      Six
                                                               April 24,   April 1,  Months     January 1, Months
                                                               1999 to     1999 to   Ended      1999 to    Ended
                                                               June 30,    April 23, June 30,   April 23,  June 30,
                                                                 1999       1999       1998      1999      1998
                                                               --------- ----------- --------   ------- ------------
<S>                                                               <C>         <C>       <C>       <C>        <C>


Net income (loss)                                               $(4,336)   $(9,790)    $2,094   $(7,816)   $2,883
Other comprehensive income (loss):
   Foreign currency translation adjustments                        (310)       317      (139)     (116)      (51)
                                                               --------- ----------- --------   ------- ------------
Comprehensive income (loss)                                     $(4,646)   $(9,473)    $1,955   $(7,932)   $2,832
                                                               ========= =========== ========  ======== ============
</TABLE>















See accompanying notes.


                                                        -4-

<PAGE>





                          AMERICAN SAFETY RAZOR COMPANY
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                Company          Predecessor
                                                                              ----------  ------------------------
                                                                                Period      Period
                                                                                 from        from           Six
                                                                               April 24,   January 1,       Months
                                                                                1999 to     1999 to         Ended
                                                                                June 30,   April 23,      June 30,
                                                                                 1999         1999          1998
                                                                              ----------  -----------     --------
<S>                                                                               <C>          <C>           <C>

Operating activities
Net income (loss)                                                               $(4,336)     $(7,816)      $2,883
Adjustments to reconcile net income (loss) to net cash provided by
    operating activities:
        Extraordinary item                                                          611          118            -
        Depreciation and amortization                                             2,960        4,105        5,929
        Amortization of financing costs                                             346          180          270
        Retiree benefits and other                                                 (872)        (719)        (448)
        Deferred income taxes                                                    (3,326)         232        1,058
        Changes in operating assets and liabilities:
             Trade receivables                                                   (6,062)       7,710        2,637
             Inventories                                                          9,623       (7,748)      (4,248)
             Income taxes receivable                                              1,518       (2,252)      (1,497)
             Prepaid expenses                                                       (18)         205         (981)
             Accounts payable                                                       216        1,723        3,184
             Accrued and other expenses                                           1,768       (1,072)      (1,325)
             Income taxes payable                                                     -            -       (4,024)
                                                                               --------    ---------       ------

Net cash provided by (used in) operating activities                               2,428       (5,334)       3,438

Investing activities
Capital expenditures                                                             (1,354)      (3,638)      (5,498)
Other                                                                                 2           49            -
                                                                               --------     --------     --------

Net cash used in investing activities                                            (1,352)      (3,589)      (5,498)

Financing activities
Repayment of long-term obligations                                              (33,793)     (25,846)      (4,655)
Proceeds from borrowings                                                         32,801       65,337        6,629
Deferred loan fees                                                                    -       (7,606)           -
Proceeds from exercise of stock options                                               -            2          104
Advances to parent, net                                                               -      (24,155)           -
                                                                               --------      -------      -------

Net cash (used in) provided from financing activities                              (992)       7,732        2,078
                                                                                -------     --------       ------

Net increase (decrease) in cash and cash equivalents                                 84       (1,191)          18
Cash and cash equivalents, beginning of period                                    2,262        3,453        1,434
                                                                                 ------      -------       ------

Cash and cash equivalents, end of period                                         $2,346       $2,262       $1,452
                                                                                 ======       ======       ======
</TABLE>



See accompanying notes.

                                                        -5-

<PAGE>





                          AMERICAN SAFETY RAZOR COMPANY

        Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary for a fair presentation have been included.  Operating results for the
period  April 1, 1999 to April 23, 1999 and the period  January 1, 1999 to April
23, 1999 for  American  Safety Razor  Company  prior to its  acquisition  by RSA
Acquisition Corporation (the "Predecessor"),  an affiliate of J.W. Childs Equity
Partners II, L.P. ("J.W. Childs") and the period April 23, 1999 to June 30, 1999
for  the  American  Safety  Razor  Company  (the  "Company")  subsequent  to the
acquisition,  are not necessarily indicative of the results that may be expected
for the year ended December 31, 1999. The balance sheet at December 31, 1998 has
been derived  from the audited  financial  statements  at that date but does not
include all of the  information  and  footnotes  required by generally  accepted
accounting   principles   for  complete   financial   statements.   For  further
information,  refer  to the  consolidated  financial  statements  and  footnotes
thereto  included in the  Registrant's  Annual  Report on Form 10-K for the year
ended December 31, 1998.

As a result of the acquisition and new basis of accounting  described in Note G,
the Company's financial  statements for the period subsequent to the acquisition
are not  comparable to the  Predecessor's  financial  statements  for the period
prior to the acquisition. With respect to inventories see Note B.


NOTE B - INVENTORIES

Classifications  of  inventories  under  LIFO as of  December  31,  1998  are as
follows:

                                                               December 31, 1998
                                                                 (In thousands)

Raw materials                                                       $18,797
Work-in-process                                                       6,612
Finished goods                                                       25,070
Operating supplies                                                    3,475
                                                                    -------
                                                                     53,954
Excess of LIFO inventory value over current cost                         75
                                                                    -------
                                                                    $54,029
                                                                    =======

In  connection  with the  acquisition  the  Company's  new  owners  adopted  the
first-in,  first-out  ("FIFO")  method  of  valuation  of  inventories  and  the
classification of these inventories as of June 30, 1999, are as follows:

                                                                June 30, 1999
                                                               (In thousands)

Raw materials                                                      $23,067
Work-in-process                                                      5,987
Finished goods                                                      27,264
Operating supplies                                                   3,574
                                                                   -------
                                                                   $59,892
                                                                   =======

                                       -6-

<PAGE>



NOTE C - SPECIAL CHARGES

In March 1998, the Company recorded a special charge of approximately $1,003,000
related to the shutdown of the Company's cotton operations in Sparks, Nevada and
employee terminations.

The  following  table  provides  information  about the changes in the Company's
accrued special charges,  including the special charges discussed above, for the
first half of 1999:
<TABLE>
<CAPTION>

                                                       Remaining         Accruals                     Remaining
                                                      Balance at        (Reversals)     Charges in   Balance at
                                                    January 1, 1999      in 1999           1999      June 30, 1999
                                                    ---------------    ------------    -----------   -------------
<S>                                                         <C>             <C>             <C>            <C>

Discontinuation of product line:
   Contract termination                              $  500,000         $       -        $517,000      $(17,000)
   Excess inventory and deferred charges                500,000           200,000               -       700,000
Severance and employee benefits                         603,000          (200,000)        228,000       175,000
                                                     ----------         ---------        --------      --------
                                                     $1,603,000         $       -        $745,000      $858,000
                                                     ==========         =========        ========      ========
</TABLE>

Amounts  remaining  at June 30,  1999 are  included  in accrued  expenses in the
accompanying  condensed  consolidated  balance sheets.  Substantially all of the
remaining  payments  and asset  impairments  are  expected  to occur  during the
remainder of 1999.

NOTE D - LONG TERM OBLIGATIONS

On April 23, 1999 and concurrent with the  Acquisition  described in Note G, 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").  The Term Loan Facility  expires on January 31,
2005 and principal  payments  under this facility  begin 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.

At June 30, 1999,  the Company had  outstanding  borrowings  under the Term Loan
Facility of $88,000,000 and outstanding  borrowings  under the revolving  credit
facility of  $5,000,000.  The  proceeds  from these  borrowings  and  internally
generated  funds of $1,986,000 were used to purchase  $30,700,000  face value of
the Company's 9 7/8 Series B Senior Notes (the "Senior Note") which were validly
tendered (see Note G), 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
G.

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.

In connection with the purchase of the Senior Notes,  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 June 30, 1999.

In addition,  the Company 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
also  reflected in the  Company's  consolidated  statement of  operations in the
caption  "Extraordinary  item" for the  period  from  April 1, 1999 to April 23,
1999.

At June 30 1999, the Company had  approximately $20 million available for future
borrowings  under its revolving  credit facility and  approximately  $77 million
available for future borrowings under its Term Loan Facility.

                                       -7-

<PAGE>



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  represents  the amount of borrowings  outstanding  under the Term
Loan Facility on July 8, 1999.


NOTE E - EARNINGS PER SHARE

The difference  between the weighted  average number of shares  outstanding  for
computing basic earnings per share and diluted earnings per share relates to the
Company's  employee stock options  outstanding which are assumed to be converted
for the diluted earnings per share  calculation when the average market price of
the  Company's  common stock for the period  exceeds the  exercise  price of the
employee stock options which are outstanding.

In connection  with the acquisition  described in Note G, the Company,  on April
30, 1999,  redeemed all of its then outstanding options to purchase common stock
of the Company for aggregate consideration of $1.2 million.


NOTE F - SEGMENT INFORMATION
<TABLE>
<CAPTION>

                                               Company                              Predecessor
                                          -------------------        ----------------------------------------------
                                              Period from                Period from               Three Months
                                          April 24, 1999 to           April 1, 1999 to             Ended June 30,
                                             June 30, 1999             April 23, 1999                   1998
                                          -------------------        -------------------      ---------------------
                                            Net     Operating          Net     Operating        Net     Operating
                                           Sales     Income           Sales     Income         Sales     Income
                                          --------- ---------        -------- ----------      -------- ------------
                                                                            (In Thousands)
<S>                                         <C>          <C>            <C>         <C>          <C>          <C>

Razors and Blades                         $40,332     $(1,861)       $10,907    $(10,639)     $45,730       $4,836
Cotton and Foot Care                       13,566        (151)         4,998        (169)      20,837        1,070
Custom Bar Soap                             6,044         712          1,399        (129)       7,184          671
                                         --------    --------       --------   ---------     --------     --------
                                          $59,942      (1,300)       $17,304     (10,937)     $73,751        6,577
                                          =======                    =======                  =======
Interest expense                                        3,972                        877                     3,104
                                                     --------                  ---------                   -------
Income (loss) before income taxes
   and extraordinary item                             $(5,272)                  $(11,814)                   $3,473
                                                      =======                   ========                    ======


                                                                                        Predecessor
                                                                      --------------------------------------------
                                                                          Period from             Six Months
                                                                       January 1, 1999 to       Ended June 30,
                                                                        April 23, 1999                1998
                                                                     -------------------      --------------------
                                                                        Net     Operating        Net     Operating
                                                                       Sales     Income         Sales     Income
                                                                     ---------  --------      ---------  ---------

Razors and Blades                                                    $55,189     $(4,673)     $84,404       $8,022
Cotton and Foot Care                                                  25,551         258       43,484        2,234
Custom Bar Soap                                                        6,851        (218)      12,374          674
                                                                    --------     -------    ---------     --------
                                                                     $87,591      (4,633)    $140,262       10,930
                                                                     =======                 ========
Interest expense                                                                   3,907                     6,149
                                                                                 -------                   -------
Income (loss) before income taxes
   and extraordinary item                                                        $(8,540)                   $4,781
                                                                                 =======                    ======

                                                  Total Assets
                                                 -------------
                                                 June 30, 1999
                                                 -------------

Razors and Blades                                     $289,161
Cotton and Foot Care                                    63,659
Custom Bar Soap                                         54,385
                                                 -------------
                                                      $407,205
                                                 =============
</TABLE>


                                       -8-

<PAGE>




NOTE G - MERGER

Effective  April 23,  1999,  RSA  Acquisition  Corporation  ("Acquisition"),  an
affiliate of "J.W. Childs", completed its $14.20 per share cash tender offer for
all outstanding shares of the Predecessor in accordance with a February 12, 1999
merger  agreement  upon the terms and subject to the conditions set forth in the
offer to purchase ("the Stock Tender Offer"). Following completion of the offer,
there remain approximately 266,601 American Safety Razor shares outstanding.  On
July 1, 1999, RSA Acquisition Corp. and American Safety Razor completed a merger
transaction pursuant to which RSA Acquisition Corp. will acquire these remaining
shares of American  Safety Razor 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  excluding the cost to redeem stock options,
once all of the common stock is tendered, is approximately $173.0 million.

Following the merger, the Company is the surviving  corporation and is a direct,
wholly- owned subsidiary of RSA Holdings,  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 its 9 7/8 Series B Senior Notes due August 1,
2005 (the "Existing Notes"). In response thereto,  $30.7 million of the Existing
Notes were properly 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 preliminary  estimates of their  respective  fair values at April 23, 1999 as
follows:

          Working capital                                      $  77,908,000
          Property, plant and equipment                           93,973,000
          Intangible assets, including goodwill                  177,113,000
          Prepaid pension and other assets                        46,861,000
          Long-term debt                                        (163,685,000)
          Other liabilities                                      (59,206,000)
                                                               -------------
                                                                $172,964,000
                                                               =============

These  preliminary  estimates  are  subject  to  change  as they  are  based  on
preliminary  appraisals  and as certain of the Company's  business  plans become
finalized.

As a result  of the  acquisition  and new  basis of  accounting,  the  Company's
financial  statements  for the  period  subsequent  to the  acquisition  are not
comparable to the Predecessor's financial statements for the period prior to the
acquisition. 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
fair market  value,  which  adjustment  was written off in the April 24, 1999 to
June 30, 1999 reporting period. In addition,  certain fees and expenses incurred
relating  to the above  transactions  were  expensed  in the period in which the
transactions were completed and are included in the  Predecessor's  consolidated
statement of operations in the caption "Transaction expenses".

The primary components of this caption 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.

NOTE H - CONTINGENCIES

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

                                       -9-

<PAGE>



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. The Company has received
notice of claims  for  damages in the  aggregate  amount of  approximately  $2.2
million which the Company believes  primarily  relates to alleged lost sales and
merchandise  damage,  and 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 our  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  has been  advised by its  general  counsel  that it has a number of
valid  defenses  to  potential  customer  claims as well as a third  party claim
against the  supplier  for damages,  if any,  incurred by the Company.  However,
management  is unable to 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 our exposure from this
matter might not exceed the combination of our insurance  coverage,  if any, and
our recourse to suppliers.  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 and adversely affected by an ultimate
unfavorable outcome of this matter.

Weston  Properties  Investments  III, Ltd. has filed a claim against the Company
for  damages  relating to delays in cost  overruns  attendant  to the  Company's
facility  expansion in  Cleveland,  Ohio in the amount of  $649,000.  Management
believes that the outcome of this matter will not have a material adverse effect
on the Company's consolidated financial position or results of operations.

In June  1999,  the  Company  received  notice of the filing of a lawsuit by The
Gillette  Company  ("Gillette")  seeking  injunction and damages for (i) alleged
infringement  by the Company's  MBC(TM) moving blade shaving  cartridge  system,
introduced  by the  Company  during  the  fourth  quarter  of  1994,  and by the
Company's Tri-Flexxx(TM) three bladed shaving system,  introduced by the Company
during the second quarter of 1999, of certain patents held by Gillette, and (ii)
alleged unfair advertising and packaging  practices as well as alleged breach of
contract related to MBC(TM) and Tri-Flexxx(TM)  packaging.  The Company believes
the claims are without merit and does not believe it has any material  liability
with respect to the patent, unfair advertising or contract claims and intends to
vigorously  contest these claims.  However,  management and counsel at this time
are  unable to make a  meaningful  estimate  of the amount or range of loss that
could result from an unfavorable  outcome  relating to this matter.  The Company
will reassess this matter as new facts become available.

NOTE I - SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

The  Company's  $69.3  million  of  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 June  30,  1999  (the  Company)  and
December 31, 1998 (Predecessor),  for the period from April 24, 1999 to June 30,
1999 (the  Company),  for the  period  from  January  1, 1999 to April 23,  1999
(Predecessor),  and for the six months  ended June 30,  1998  (Predecessor),  of
American Safety Razor Company - the parent company, the guarantor  subsidiaries,
the  non-guarantor  subsidiaries,  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.

                                      -10-

<PAGE>



                     Condensed Consolidating Balance Sheets

                                  June 30, 1999

                                 (In thousands)
<TABLE>
<CAPTION>


                                                                             Company
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>

Assets
Current assets:
   Cash and cash equivalents                     $        7    $     185     $  2,154  $          -      $  2,346
   Trade receivables, net                            20,024       10,404       12,660          (238)       42,850
   Advances receivable--subsidiaries                 39,530            -        3,906       (43,436)            -
   Inventories                                       32,758       16,310       12,141        (1,317)       59,892
   Income taxes and prepaid expenses                  7,891        2,023          541             -        10,455
                                                  ---------    ---------     -------- -------------      --------

     Total current assets                           100,210       28,922       31,402       (44,991)      115,543

Property and equipment, net                          57,427       26,573        9,286             -        93,286
Intangible assets, net                              137,386       36,869          939             -       175,194
Prepaid pension cost and other                       15,077        8,084           21             -        23,182
Investment in subsidiaries                           61,549            -        3,340       (64,889)            -
                                                  ---------    ---------     -------- -------------      --------

     Total assets                                  $371,649     $100,448      $44,988     $(109,880)     $407,205
                                                  =========    =========     ======== =============      ========

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable, accrued expenses
     and other                                     $ 22,918     $ 10,707      $ 4,048   $        (1)     $ 37,672
   Advances payable--subsidiaries                         -       44,733            -       (44,733)            -
   Current maturities of long-term obligations        3,049        1,379        1,141             -         5,569
                                                  ---------    ---------     -------- -------------      --------

     Total current liabilities                       25,967       56,819        5,189       (44,734)       43,241

Long-term obligations                               160,534           64            -             -       160,598
Retiree benefits and other                           15,872       10,006            -             -        25,878
Deferred income taxes                                24,803        8,249          273             -        33,325
                                                  ---------    ---------     -------- -------------      --------

     Total liabilities                              227,176       75,138        5,462       (44,734)      263,042
                                                  ---------    ---------     -------- -------------      --------

Stockholders' equity
   Common Stock                                         121          485           88          (573)          121
   Additional paid-in capital                       172,843       24,940       39,834       (64,774)      172,843
   Advances to parent, net                          (24,155)           -            -             -       (24,155)
   Retained earnings (accumulated deficit)           (4,336)        (115)         (83)          198        (4,336)
   Accumulated other comprehensive loss                   -            -         (313)            3          (310)
                                                  ---------    ---------     -------- -------------      --------
                                                    144,473       25,310       39,526       (65,146)      144,163
                                                  ---------    ---------     -------- -------------      --------
     Total liabilities and stockholders' equity    $371,649     $100,448      $44,988     $(109,880)     $407,205
                                                  =========    =========     ======== =============      ========
</TABLE>


                                                       -11-

<PAGE>



                     Condensed Consolidating Balance Sheets
                                December 31, 1998
                                 (In thousands)

<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>


Assets
Current assets:
   Cash and cash equivalents                     $      (17)    $    106      $ 3,364    $        -     $   3,453
   Trade receivables, net                            18,717       12,315       13,704          (238)       44,498
   Advances receivable--subsidiaries                 48,543            -            -       (48,543)            -
   Inventories                                       30,108       13,349       11,604        (1,032)       54,029
   Income taxes and prepaid expenses                  6,216        1,578          643             -         8,437
                                                  ---------    ---------     -------- -------------      --------

     Total current assets                           103,567       27,348       29,315       (49,813)      110,417

Property and equipment, net                          41,656       24,068        8,941             -        74,665
Intangible assets, net                               49,027       20,601        2,183             -        71,811
Prepaid pension cost and other                        1,133        4,850           21             -         6,004
Investment in subsidiaries                           39,458            -        4,218       (43,676)            -
                                                  ---------    ---------     -------- -------------      --------

     Total assets                                  $234,841      $76,867      $44,678      $(93,489)     $262,897
                                                  =========    =========     ======== =============      ========

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable, accrued expenses
     and other                                     $ 20,058      $ 9,611      $ 4,568    $        -      $ 34,237
   Advances payable--subsidiaries                         -       43,283        4,703       (47,986)            -
   Current maturities of long-term obligations        1,030        1,380        1,442             -         3,852
                                                  ---------    ---------     -------- -------------      --------

     Total current liabilities                       21,088       54,274       10,713       (47,986)       38,089

Long-term obligations                               121,718        1,377          386             -       123,481
Retiree benefits and other                           15,169        9,994            -             -        25,163
Deferred income taxes                                 3,468        3,040          102             -         6,610
                                                  ---------    ---------     -------- -------------      --------

     Total liabilities                              161,443       68,685       11,201       (47,986)      193,343
                                                  ---------    ---------     -------- -------------      --------

Stockholders' equity
   Common Stock                                         121          485           87          (572)          121
   Additional paid-in capital                        65,905       15,662       27,173       (42,835)       65,905
   Retained earnings (accumulated deficit)            4,457       (7,965)      10,058        (2,093)        4,457
   Dividends                                          2,877            -       (2,877)            -             -
   Accumulated other comprehensive loss                  38            -         (964)           (3)         (929)
                                                  ---------    ---------     -------- -------------      --------
                                                     73,398        8,182       33,477       (45,503)       69,554
                                                  ---------    ---------     -------- -------------      --------
     Total liabilities and stockholders' equity    $234,841      $76,867      $44,678      $(93,489)     $262,897
                                                  =========    =========     ======== =============      ========
</TABLE>


                                                       -12-

<PAGE>




            Condensed Consolidating Statements of Income (Unaudited)
               For the Period from April 24, 1999 to June 30, 1999
                                 (In thousands)

<TABLE>
<CAPTION>


                                                                             Company
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>


Net sales                                           $32,902      $19,729      $11,751       $(4,440)      $59,942
Cost of sales:
     Other costs                                     17,452       16,358        8,815        (4,440)       38,185
     Purchase accounting adjustment
        to inventory                                  7,910          215          883             -         9,008
                                                  ---------    ---------     -------- -------------      --------

Gross profit                                          7,540        3,156        2,053             -        12,749

Selling, general and
     administrative expenses                          8,898        2,287        1,945             -        13,130
Amortization of intangible assets                       676          236            7             -           919
                                                  ---------    ---------     -------- -------------      --------

Operating income (loss)                              (2,034)         633          101             -        (1,300)

Operating income (expense):
     Equity in earnings (losses) of affiliates          286            -         (484)          198             -
     Interest expense                                (3,561)        (764)         353             -        (3,972)
                                                  ---------    ---------     -------- -------------      --------
Income (loss) before income taxes
     and extraordinary item                          (5,309)        (131)         (30)          198        (5,272)
Income taxes (benefit)                               (1,584)         (16)          53             -        (1,547)
                                                  ---------    ---------     -------- -------------      --------

Income (loss) before extraordinary item              (3,725)        (115)         (83)          198        (3,725)
Extraordinary item                                      611            -            -             -           611
                                                  ---------    ---------     -------- -------------      --------

Net income (loss)                                   $(4,336)    $   (115)    $    (83)      $   198       $(4,336)
                                                  =========    =========     ======== =============      ========
</TABLE>



                                                       -13-

<PAGE>




            Condensed Consolidating Statements of Income (Unaudited)
              For the Period from January 1, 1999 to April 23, 1999
                                 (In thousands)



<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<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 income (loss)                              (4,923)          39          251             -        (4,633)

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

Income (loss) before extraordinary item              (7,698)        (691)         162           529        (7,698)
Extraordinary item                                      118            -            -             -           118
                                                  ---------    ---------     -------- -------------      --------

Net income (loss)                                   $(7,816)    $   (691)    $    162       $   529       $(7,816)
                                                  =========    =========     ======== =============      ========
</TABLE>


                                                       -14-

<PAGE>



            Condensed Consolidating Statements of Income (Unaudited)
                         Six Months Ended June 30, 1998
                                 (In thousands)


<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>
Net sales                                           $69,474      $56,231      $24,527       $(9,970)     $140,262
Cost of sales                                        40,922       47,212       18,790        (9,970)       96,954
                                                  ---------    ---------     -------- -------------      --------

Gross profit                                         28,552        9,019        5,737             -        43,308

Selling, general and
     administrative expenses                         19,188        5,859        5,064             -        30,111
Amortization of intangible assets                       743          493           28             -         1,264
Special charge                                          731          184           88             -         1,003
                                                  ---------    ---------     -------- -------------      --------

Operating income                                      7,890        2,483          557             -        10,930

Operating income (expense):
     Equity in earnings of affiliates                 1,105            -          207        (1,312)            -
     Interest expense                                (4,824)      (2,059)         734             -        (6,149)
                                                  ---------    ---------     -------- -------------      --------

Income before income taxes
     and extraordinary item                           4,171          424        1,498        (1,312)        4,781
Income taxes                                          1,288          145          465             -         1,898
                                                  ---------    ---------     -------- -------------      --------

Income before extraordinary item                      2,883          279        1,033        (1,312)        2,883
Extraordinary item                                        -            -            -             -             -
                                                  ---------    ---------     -------- -------------      --------

Net income                                          $ 2,883     $    279      $ 1,033       $(1,312)     $  2,883
                                                  =========    =========     ======== =============      ========
</TABLE>






                                                       -15-

<PAGE>



     Condensed Consolidating Statements of Comprehensive Income (Unaudited)
               For the Period from April 24, 1999 to June 30, 1999
                                 (In thousands)



<TABLE>
<CAPTION>


                                                                             Company
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>

Net income (loss)                                   $(4,336)       $(115)      $  (83)          $198      $(4,336)
Other comprehensive loss:
   Foreign currency translation adjustments               -            -         (313)             3         (310)
                                                  ---------    ---------  ------------  ------------  ------------
Comprehensive income (loss)                         $(4,336)       $(115)       $(396)          $201      $(4,646)
                                                  =========    =========  ============  ============  ============
</TABLE>


     Condensed Consolidating Statements of Comprehensive Income (Unaudited)
              For the Period from January 1, 1999 to April 23, 1999
                                 (In thousands)



<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>

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





     Condensed Consolidating Statements of Comprehensive Income (Unaudited)
                         Six Months Ended June 30, 1998
                                 (In thousands)


<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>

Net income (loss)                                     $2,883         $279       $1,033      $(1,312)       $2,883
Other comprehensive loss:
   Foreign currency translation adjustments                -            -         (51)            -           (51)
                                                  ---------    ---------  ------------  ------------  ------------
Comprehensive income                                  $2,883         $279        $982       $(1,312)       $2,832
                                                  =========    =========  ============  ============  ============
</TABLE>




                                                       -16-

<PAGE>



          Condensed Consolidating Statements of Cash Flows (Unaudited)

               For the Period from April 24, 1999 to June 30, 1999

                                 (In thousands)


<TABLE>
<CAPTION>


                                                                             Company
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>
Operating activities
Net cash provided by (used in)
     operating activities                            $2,341        $(892)      $  941        $   38        $2,428

Investing activities
Capital expenditures                                 (1,132)        (206)         (16)           -         (1,354)
Other                                                   (34)           -           36            -              2
Advances from (to) subsidiaries                      (1,587)           -         (641)        2,228             -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash used in investing activities           (2,753)        (206)        (621)        2,228        (1,352)

Financing activities
Repayment of long-term obligations                  (32,209)      (1,280)        (304)            -       (33,793)
Proceeds from borrowings                             32,801            -            -             -        32,801
Advances from (to) subsidiaries                           -        2,266            -        (2,266)            -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash provided from (used in)
          financing activities                          592          986         (304)       (2,266)         (992)

Net increase (decrease) in cash and cash
   equivalents                                          180         (112)          16             -            84
Cash and cash equivalents, beginning of
  period                                               (173)         297        2,138             -         2,262
                                                  ---------    ---------  ------------  ------------  ------------
     Cash and cash equivalents, end of
        period                                      $     7        $ 185       $2,154       $     -        $2,346
                                                  =========    =========  ============  ============  ============
</TABLE>



                                                       -17-

<PAGE>



          Condensed Consolidating Statements of Cash Flows (Unaudited)

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

                                 (In thousands)


<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>
Operating activities
Net cash (used in) provided by
     operating activities                           $(7,976)      $1,545       $  124        $  973       $(5,334)

Investing activities
Capital expenditures                                 (2,538)        (824)        (276)            -        (3,638)
Other                                                    49            -            -             -            49
Advances from (to) subsidiaries                       2,132            -         (691)       (1,441)            -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash used in investing activities             (357)        (824)        (967)       (1,441)       (3,589)

Financing activities
Repayment of long-term obligations                  (25,401)         (62)        (383)            -       (25,846)
Proceeds from borrowings                             65,337            -            -             -        65,337
Deferred loan fees                                   (7,606)           -            -             -        (7,606)
Proceeds from exercise of stock options                   2            -            -             -             2
Advances to parent, net                             (24,155)           -            -             -       (24,155)
Advances from (to) subsidiaries                           -         (468)           -           468             -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash provided from (used in)
          financing activities                        8,177         (530)        (383)          468         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>


                                                       -18-

<PAGE>



          Condensed Consolidating Statements of Cash Flows (Unaudited)

                         Six Months Ended June 30, 1998

                                 (In thousands)



<TABLE>
<CAPTION>


                                                                             Predecessor
                                                  ----------------------------------------------------------------
                                                                              Non-
                                                               Guarantor    guarantor
                                                      ASR    Subsidiaries Subsidiaries  Eliminations  Consolidated
                                                  ---------    ---------  ------------  ------------  ------------
<S>                                                   <C>           <C>          <C>           <C>           <C>
Operating activities
Net cash provided by (used in)
     operating activities                            $4,736       $ (538)      $  609       $(1,369)       $3,438

Investing activities
Capital expenditures                                 (3,106)      (2,216)        (176)            -        (5,498)
Investment in subsidiaries                             (680)           -          680             -             -
Advances from (to) subsidiaries                      (3,587)           -         (255)        3,842             -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash (used in) provided from
          investing activities                       (7,373)      (2,216)         249         3,842        (5,498)

Financing activities
Repayment of long-term obligations                   (4,564)         (91)           -             -        (4,655)
Proceeds from borrowings                              6,605            -           24             -         6,629
Proceeds for exercise of stock options                  104            -            -             -           104
Advances from (to) subsidiaries                           -        2,481            -        (2,481)            -
                                                  ---------    ---------  ------------  ------------  ------------

     Net cash provided from
          financing activities                        2,145        2,390           24        (2,481)        2,078
                                                  ---------    ---------  ------------  ------------  ------------

Net (decrease) increase in cash and cash
   equivalents                                         (492)        (364)         882            (8)           18
Cash and cash equivalents, beginning of
  period                                                356          433          637             8         1,434
                                                  ---------    ---------  ------------  ------------  ------------
     Cash and cash equivalents, end of
        period                                        $(136)      $   69       $1,519      $      -        $1,452
                                                  =========    =========  ============  ============  ============
</TABLE>



                                                       -19-

<PAGE>




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


General

The following  discussion  and analysis of results of  operations  and financial
condition is based upon and should be read in conjunction  with the consolidated
financial  statements of the Company and notes  thereto  included in this report
and the Registrant's  Annual Report on Form 10-K for the year ended December 31,
1998. Additionally,  management has prepared pro forma results of operations for
the three and six months ended June 30, 1999 to enable a  meaningful  comparison
between 1999 and 1998 results of operations.  Accordingly,  see "Pro Forma Three
Months Ended June 30, 1999  Compared to Three Months Ended June 30, 1998 and Pro
Forma Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998"
discussions  below,  which compare the three and six months ended June, 30, 1999
on a pro forma basis  assuming the  acquisition  and  financing  had occurred on
April 1, 1999 and January 1, 1999, respectively,  with 1998 actual results for a
more meaningful comparison of operations.


Forward-Looking Statements

This report contains  forward-looking  statements  relating to future results of
the  Company.   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 the  Company's  products,  acceptance  of new  products,
technology  developments affecting the Company's products and to those discussed
in  the  Company's   filings  with  the  Securities  and  Exchange   Commission.
Accordingly,  actual results could differ materially from those  contemplated by
the forward-looking statements.


Pro Forma  Condensed  Consolidated  Statement of Operations for the Three Months
Ended June 30, 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  April 1,  1999 to April  23,  1999,  and the
historical  financial  statements  of the  Company for the period from April 24,
1999 to June 30, 1999. The acquisition,  and the related financing transactions,
are  assumed  to have  occurred  on  April  1,  1999.  The pro  forma  condensed
consolidated statement of operations for the three months ended June 30, 1999 is
not necessarily indicative of the results of operations that would have occurred
for the three  months  ended June 30,  1999,  had the  acquisition  and relating
financing  transactions  occurred on April 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 three
months ended June 30, 1999,  should be read in  conjunction  with the historical
financial statements and related notes thereto of the Company which are included
in this Form 10-Q and in the  Company's  Annual Report on Form 10-K for the year
ended December 31, 1998.


                                      -20-

<PAGE>



   Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
                        Three Months Ended June 30, 1999
                                 (In Thousands)

<TABLE>
<CAPTION>

                               Predecessor                 Predecessor      Company
                               Historical                    Pro Forma     Historical                     Company
                               Period from                  Period From   Period From                   Pro Forma
                              April 1, 1999                April 1, 1999  April 1, 1999                Three Months
                               to April 23,    Pro Forma    to April 23,  to June 30,    Pro Forma          Ended
                                  1999        Adjustments        1999          1999      Adjustments   June 30, 1999
                            ---------------   -----------  -------------  -------------  -----------   -------------
<S>                                <C>             <C>           <C>            <C>           <C>            <C>

Net sales                          $17,304                     $17,304       $59,942    $       -         $77,246
Cost of sales:
   Other costs                      11,691       $    88 (a)    11,779        38,185            -          49,964
   Purchase accounting
      adjustment
      to inventory                       -         3,453 (b)     3,453         9,008       (3,453)(b)       9,008
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Gross profit                      5,613        (3,541)        2,072        12,749        3,453          18,274

Selling, general and
   administrative
   expenses                          4,922            14 (c)     4,936        13,130            -          18,066
Amortization of intangibles            188           146 (d)       334           919            -           1,253
Transaction expenses                11,440             -        11,440             -            -          11,440
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Operating loss                  (10,937)       (3,701)      (14,638)       (1,300)       3,453         (12,485)

Interest expense                       877           419 (e)     1,296         3,972         (138)(g)       5,130
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Income (loss) before
      income taxes
      and extraordinary item       (11,814)       (4,120)      (15,934)       (5,272)       3,591         (17,615)

Income taxes (benefit)              (2,142)       (1,616)(f)    (3,758)       (1,547)       1,426 (f)      (3,879)
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Income (loss) before
      extraordinary item           $(9,672)      $(2,504)     $(12,176)      $(3,725)      $2,165        $(13,736)
                            ===============   ===========  =============  =============  ===========   =============
</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 ranging from 3 to 26 years.

(b) Adjustment to reflect the impact on cost of sales of the purchase accounting
    adjustment to inventory assuming the acquisition occurred on April 1, 1999.

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

(d) Adjustment to reflect the  elimination  of $159 of  amortization  related to
    historical  goodwill  and record pro forma  amortization  of $305 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
    $108 related to the Predecessor's  credit facilities,  loan commitment fees,
    and  the  amortization  of  deferred   financing   costs,   (ii)  pro  forma
    amortization  of $85 for the $7,606 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 $442 on
    the  Company's  credit  facilities  related  to the  balances  assumed to be
    outstanding on April 1, 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 1,
    1999,  include $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 April 1, 1999.




                                      -21-

<PAGE>




(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 $49 which is not tax deductible.

(g) Adjustment  to  reflect  (i)  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 (d)  above,  and  (ii)  the pro  forma
    interest  expense  reduction  of $399 related to the  $30,700,000  in Senior
    Notes which were assumed to be purchased on April 24, 1999.


Pro Forma Three Months  Ended June 30, 1999  Compared to Three Months Ended June
30, 1998

Net Sales. Net sales for the pro forma three months ended June 30, 1999, and for
the three  months  ended June 30, 1998,  were $77.2  million and $73.8  million,
respectively, an increase of $3.4 million, or 5%.

Razors and Blades.  Net sales of our razors and blades segment for the pro forma
three months ended June 30, 1999,  and for the three months ended June 30, 1998,
were $51.2 million and $45.8 million,  respectively, an increase of $5.4 million
or 12%.

Net sales of shaving razors and blades for the pro forma three months ended June
30, 1999,  and for the three months ended June 30, 1998,  were $32.8 million and
$30.3 million,  respectively,  an increase of $2.5 million,  or 8%. Net sales of
domestic value branded  shaving  products  increased 25%,  rebounding  from weak
sales in the second  quarter of 1998,  reflecting  sales  gains  relating  to an
increase in promotional  programs with several customers,  the launch of the new
Tri-Flexxx  shaving product and overall increased  distribution of the Company's
shaving  products.  Net sales of domestic  private label  shaving  products were
substantially  unchanged. Net sales of shaving products in international markets
increased  4%  (net of a 2%  negative  impact  of  unfavorable  exchange  rates)
reflecting stronger sales, primarily in the United Kingdom,  Europe, Puerto Rico
and the Caribbean which were somewhat offset by weaker sales in Africa and Latin
America.

Net sales of blades and bladed hand tools for the pro forma three  months  ended
June 30, 1999, and for the three months ended June 30, 1998,  were $14.2 million
and $11.6  million,  respectively,  an increase of $2.6  million,  or 22%.  This
growth  primarily  reflects  increased  sales of the Company's  Personna(R)  and
American Line(TM) brands of products as a result of new distribution gains.

Net sales of  specialty  industrial  and medical  blades for the pro forma three
months  ended June 30, 1999,  and for the three months ended June 30 1998,  were
$4.2 million and $3.9 million, respectively, an increase of $0.3 million, or 8%.
Sales of specialty industrial products increased 14% due primarily to the timing
of purchases by certain  customers.  Sales of medical products  increased 4% due
primarily to increased distribution of certain products.

Cotton and Foot Care.  Net sales of cotton  and foot care  products  for the pro
forma three months ended June 30, 1999,  and for the three months ended June 30,
1998,  were $18.6 million and $20.8  million,  respectively,  a decrease of $2.2
million or 11%.  This  decrease  results  primarily  from issues  related to the
continuing  integration and  reorganization  of the Company's cotton  operations
which have led to delays in shipping  products to customers  and in turn reduced
promotional activity and volume with certain customers.

Custom Bar Soap. Net sales of the Company's custom bar soap products for the pro
forma three months ended June 30, 1999,  and for the three months ended June 30,
1998,  were $7.4  million and $7.2  million,  respectively,  an increase of $0.2
million or 3%. This increase  results  primarily from increased sales to certain
of the Company's pharmaceutical/skin care customers.

Gross Profit.  Gross profit  decreased  $5.5 million to $18.3 million during the
pro forma three  months ended June 30,  1999,  from $23.8  million for the three
months ended June 30, 1998. As a percentage of net sales, gross profit was 23.7%
for the pro forma  three  months  ended June 30,  1999,  and 32.3% for the three
months ended June 30, 1998.  Excluding  the purchase  accounting  adjustment  to
inventory of $9.0 million,  gross profit increased $3.5 million to $27.3 million
for the pro forma three months ended June 30, 1999,  from $23.8  million for the
three

                                      -22-

<PAGE>



months ended June 30, 1998,  and as a percentage of net sales,  gross profit was
35.3% for the pro forma  three  months  ended June 30,  1999,  and 32.3% for the
three  months  ended June 30,  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 favorable  product mix and lower  material costs for certain raw
materials.  This  improvement  in blade and soap margins was somewhat  offset by
lower margins in the  Company's  cotton  business 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
23.4% of net sales for the pro forma three months ended June 30, 1999,  compared
to 22.5% for the three  months  ended June 30,  1998.  This  increase  primarily
reflects an increase in  promotional  support for the  Company's  shaving  blade
products.  Amortization of goodwill and other  intangible  assets increased $0.6
million to $1.3 million for the pro forma three months ended June 30, 1999, over
the three months  ended June 30,  1998,  reflecting  increased  amortization  of
intangible  assets related to the  acquisition.  Interest expense also increased
$2.0 million for the pro forma three months ended June 30, 1999, to $5.1 million
over the three months ended June 30, 1998,  due primarily to increased  interest
expense, commitment fees and amortization of deferred loans fees associated with
debt incurred in connection with the acquisition.

As of June 30, 1999,  approximately  $0.9 million remained as an accrued expense
on our balance sheet related to the Company's  special charges which is expected
to be substantially  paid or utilized for asset impairment  during the remainder
of 1999.

In  connection  with  the  acquisition   transaction  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 D) are
reflected  in  the  Company's   consolidated   statement  of  operations  as  an
extraordinary item.

The  Company's  effective  income tax rate was  (22.0)%  for the pro forma three
months  ended June 30,  1999,  versus  39.7% for the three months ended June 30,
1998,  and  varies  from the  United  States  statutory  rate due  primarily  to
nondeductible goodwill amortization,  certain nondeductible transaction expenses
and state income taxes, net of the federal tax benefit.


Pro Forma  Condensed  Consolidated  Statement of  Operations  for the Six Months
Ended June 30, 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 June 30, 1999. The acquisition,  and the related financing transactions,
are  assumed  to have  occurred  on January  1,  1999.  The pro forma  condensed
consolidated  statement of operations for the six months ended June 30, 1999, is
not necessarily indicative of the results of operations that would have occurred
for the six  months  ended  June 30,  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 six
months ended June 30, 1999,  should be read in  conjunction  with the historical
financial statements and related notes thereto of the Company which are included
in this Form 10-Q and in the  Company's  Annual Report on Form 10-K for the year
ended December 31, 1998.


                                      -23-

<PAGE>



   Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
                         Six Months Ended June 30, 1999
                                 (In Thousands)


<TABLE>
<CAPTION>

                               Predecessor                 Predecessor      Company
                               Historical                    Pro Forma     Historical                     Company
                               Period from                  Period From   Period From                   Pro Forma
                            January 1, 1999               January 1, 1999 April 24, 1999               Three Months
                               to April 23,    Pro Forma    to April 23,  to June 30,    Pro Forma          Ended
                                  1999        Adjustments        1999          1999      Adjustments   June 30, 1999
                            ---------------   -----------  -------------  -------------  -----------   -------------
<S>                                <C>             <C>           <C>            <C>           <C>            <C>

Net sales                          $87,591                     $87,591       $59,942     $      -        $147,533
Cost of sales:
   Other costs                      58,520        $  431 (a)    58,951        38,185            -          97,136
   Purchase accounting
      adjustment
      to inventory                       -         9,008 (b)     9,008         9,008       (9,008)(b)       9,008
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Gross profit                     29,071        (9,439)       19,632        12,749        9,008          41,389

Selling, general and
   administrative
   expenses                         21,429            68 (c)    21,497        13,130            -          34,627
Amortization of intangibles            835           774 (d)     1,609           919            -           2,528
Transaction expenses                11,440             -        11,440             -            -          11,440
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Operating loss                   (4,633)      (10,281)      (14,914)       (1,300)       9,008          (7,206)

Interest expense                     3,907         2,006 (e)     5,913         3,972         (138)(g)       9,747
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Income (loss) before income
      taxes and
      extraordinary item            (8,540)      (12,287)      (20,827)       (5,272)       9,146         (16,953)

Income taxes (benefit)                (842)       (4,757)(f)    (5,599)       (1,547)       3,631 (f)      (3,515)
                            ---------------   -----------  -------------  -------------  -----------   -------------

   Income (loss) before
      extraordinary item           $(7,698)      $(7,530)     $(15,228)      $(3,725)      $5,515        $(13,438)
                            ===============   ===========  =============  =============  ===========   =============
</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 ranging from 3 to 26 years.

(b) Adjustment to reflect the impact on cost of sales of the purchase accounting
    adjustment  to  inventory  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  Company'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 $1,479 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 $329 for the $7,606 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) 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.

                                      -24-

<PAGE>




(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 $305 which is not tax deductible.

(g) Adjustment  to  reflect  (i)  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 (d)  above,  and  (ii)  the pro  forma
    interest  expense  reduction  of $399 related to the  $30,700,000  in Senior
    Notes which were assumed to be purchased on April 24, 1999.


Pro Forma Six Months  Ended June 30, 1999  Compared to Six Months Ended June 30,
1998

Net Sales.  Net sales for the pro forma six months ended June 30, 1999,  and for
the six months  ended June 30,  1998,  were $147.5  million and $140.3  million,
respectively, an increase of $7.2 million, or 5%.

Razors and Blades.  Net sales of our razors and blades segment for the pro forma
six months ended June 30, 1999, and for the six months ended June 30, 1998, were
$95.5 million and $84.4 million,  respectively, an increase of $11.1 million, or
13%.

Net sales of shaving  razors and blades for the pro forma six months  ended June
30, 1999,  and for the six months ended June 30,  1998,  were $61.9  million and
$53.7 million,  respectively,  an increase of $8.2 million, or 15%. Net sales of
domestic value branded shaving products increased 54% rebounding from weak sales
during the 1998 first half,  reflecting  sales gains  relating to an increase in
promotional  programs with several  customers,  the launch of the new Tri-Flexxx
shaving  product and overall  increased  distribution  of the Company's  shaving
products.  Net sales of domestic private label shaving products decreased 3% due
primarily  to reduced  promotional  support by certain  customers.  Net sales of
shaving  products in  international  markets  increased 8% (net of a 3% negative
impact of unfavorable  exchange rates) reflecting  stronger sales,  primarily in
the United  Kingdom,  Europe,  Puerto Rico and the Caribbean which were somewhat
offset by weaker sales in Africa and Latin America.

Net sales of blades  and bladed  hand  tools for the pro forma six months  ended
June 30, 1999,  and for the six months ended June 30, 1998,  were $25.7  million
and $22.6  million,  respectively,  an increase of $3.1  million,  or 14%.  This
growth  primarily  reflects  increased  sales of the Company's  Personna(R)  and
American Line(TM) brands of products as a result of new distribution gains.

Net sales of  specialty  industrial  and  medical  blades  for the pro forma six
months  ended June 30, 1999,  and for the six months  ended June 30, 1998,  were
$7.9 million and $8.1 million,  respectively, a decrease of $0.2 million, or 2%.
Sales of specialty  industrial products decreased 12% due primarily to inventory
adjustments by certain  customers and mix shifts to lower priced blade products.
Additionally,  certain  of  the  Company's  distributors  experienced  increased
competition in their serviced niche markets. Sales of medical products increased
7% due primarily to increased distribution of certain products.

Cotton and Foot Care.  Net sales of cotton  and foot care  products  for the pro
forma six months  ended  June 30,  1999,  and for the six months  ended June 30,
1998,  were $39.1 million and $43.5  million,  respectively,  a decrease of $4.4
million or 10%.  This  decrease  results  primarily  from issues  related to the
continuing  integration and  reorganization  of the Company's cotton  operations
which have led to delays in shipping  products to customers  and in turn reduced
promotional activity and volume with certain customers.

Custom Bar Soap. Net sales of the Company's custom bar soap products for the pro
forma six months  ended  June 30,  1999,  and for the six months  ended June 30,
1998,  were $12.9 million and $12.4 million,  respectively,  an increase of $0.5
million or 4%. This increase  results  primarily from increased sales to certain
of the Company's pharmaceutical/skin care customers.

Gross Profit.  Gross profit  decreased $1.9 million to $41.4 million for the pro
forma six months  ended June 30,  1999,  from $43.3  million  for the six months
ended June 30, 1998.  As a percentage  of net sales,  gross profit was 28.1% for
the pro forma six months ended June 30, 1999, and 30.9% for the six months ended
June 30, 1998. Excluding the purchase accounting adjustment to inventory of $9.0
million, gross profit increased $7.1 million

                                      -25-

<PAGE>



to $50.4 million for the six months ended June 30, 1999,  from $43.3 million for
the six months ended June 30,  1998,  and as a  percentage  of net sales,  gross
profit was 34.2% for the pro forma six months ended June 30, 1999, and 30.9% for
the six months  ended June 30,  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 favorable  product mix and 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 the pro forma six months ended June 30, 1999, compared to
21.5% for the six months ended June 30, 1998. This increase  primarily  reflects
an increase in  promotional  support for the Company's  shaving blade  products.
Amortization of goodwill and other  intangible  assets increased $1.2 million to
$2.5 million for the pro forma six months ended June 30, 1999, from $1.3 million
for the six months ended June 30, 1998,  reflecting  increased  amortization  of
intangible  assets related to the acquisition.  Interest expense  increased $3.6
million to $9.7 million for the pro forma six months  ended June 30, 1999,  from
$6.1 million for the six months ended June 30, 1998,  due primarily to increased
interest  expense,  commitment  fees and  amortization  of  deferred  loan  fees
associated with debt incurred in connection with the acquisition.

As of June 30, 1999,  approximately  $0.9 million remained as an accrued expense
on our balance sheet related to the Company's  special charges which is expected
to be substantially  paid or utilized for asset impairment  during the remainder
of 1999.

In  connection  with  the  acquisition   transaction  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 D) are
reflected  in  the  Company's   consolidated   statement  of  operations  as  an
extraordinary item.

The Company's effective income tax rate was (20.7)% for the pro forma six months
ended June 30,  1999,  and 39.7% for the six months  ended  June 30,  1998,  and
varies from the United  States  statutory  rate due  primarily to  nondeductible
goodwill  amortization,  certain  non-deductible  transaction expenses and state
income taxes, net of the federal tax benefit.


Liquidity and Capital Resources

The  Company's  principal  sources  of  liquidity  are cash flow from  operating
activities  and  borrowings  under its revolving  credit  facility and Term Loan
Facility. Net cash provided by operating activities amounted to $2.4 million for
the period from April 24, 1999, to June 30, 1999, and net cash used in operating
activities  amounted to $5.3  million for the period  from  January 1, 1999,  to
April 23, 1999,  primarily  reflecting  the payment of  transaction  expenses of
$11.4  million.  Net  cash  used in  investing  activities  related  to  capital
expenditures  of $1.4  million  for the period  from April 24,  1999 to June 30,
1999, and net cash used in investing  activities related to capital expenditures
of $3.6 million for the period from January 1, 1999 to April 23, 1999.  Net cash
used in financing activities resulted from net repayment of debt of $1.0 million
for the period from April 24, 1999 to June 30,  1999,  and net cash  provided by
financing  activities  resulted  from net  borrowings of $39.5 million which was
reduced by deferred  loan fees of $7.6 million and $24.2 million in net advances
to the Company's parent for the period from January 1, 1999 to April 23, 1999.

At June 30, 1999, the Company had approximately $20 million available for future
borrowings  under its revolving  credit facility and  approximately  $77 million
available for future borrowings under its Term Loan Facility.  Effective July 5,
1999, the Company permanently reduced the amount available for future borrowings
under its

                                      -26-

<PAGE>



Term Loan  Facility by $52.5  million to $112.5  million  which  represents  the
amount of borrowings outstanding under the Term Loan Facility on July 8, 1999.

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.

Management  believes that the  Company's  cash on hand,  anticipated  funds from
operations,  and the amounts available to the Company under its revolving credit
facility  will be  sufficient  to  cover  its  working  capital  needs,  capital
expenditures,  debt service  requirements and tax obligations as well as support
the Company's  growth-oriented  strategy for its existing  business for at least
the next 12 months.


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.   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 June 30, 1999 and June 30, 1998.  Only the potential  impacts of our
hypothetical  assumptions  are analyzed.  The analysis  does not consider  other
possible effects that could impact our business.


Interest Rate Risk

At June 30, 1999, the Company carried $166.2 million of outstanding  debt on its
books, with $93.8 million of that total held at variable interest rates. Holding
all other  variables  constant,  if interest rates  hypothetically  increased or
decreased by 10%, for the six months ended June 30, 1999 and 1998, the impact on
earnings,  cash flow and financial position would not be material.  In addition,
if interest rates hypothetically increased or decreased by 10% on June 30, 1999,
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
$3.5 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 partially offset the risk of foreign currency  fluctuations.
The value of these  contracts at June 30, 1999 was not material to the Company's
earnings, cash flow and financial position.


Merger

Effective  April 23,  1999,  RSA  Acquisition  Corporation  ("Acquisition"),  an
affiliate of "J.W. Childs", completed its $14.20 per share cash tender offer for
all outstanding shares of the Predecessor in accordance with a February 12, 1999
merger  agreement  upon the terms and subject to the conditions set forth in the
offer to  purchase  ("the  Stock  Tender  Offer").  On July 1,  1999,  following
completion of the offer,  there remain  approximately  266,601  American  Safety
Razor shares  outstanding.  RSA  Acquisition  Corp.  and  American  Safety Razor
completed a merger  transaction  pursuant to which RSA  Acquisition  Corp.  will
acquire these remaining shares of American

                                      -27-

<PAGE>



Safety  Razor 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  excluding the cost to redeem stock options,  once all of the
common stock is tendered, is approximately $173.0 million.

Following the merger, the Company is the surviving  corporation and is a direct,
wholly- owned subsidiary of RSA Holdings,  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 its 9 7/8 Series B Senior Notes due August 1,
2005 (the "Existing Notes"). In response thereto,  $30.7 million of the Existing
Notes were properly 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 preliminary  estimates of their  respective  fair values at April 23, 1999 as
follows:

          Working capital                                      $  77,908,000
          Property, plant and equipment                           93,973,000
          Intangible assets, including goodwill                  177,113,000
          Prepaid pension and other assets                        46,861,000
          Long-term debt                                        (163,685,000)
          Other liabilities                                      (59,206,000)
                                                               -------------
                                                                $172,964,000
                                                                ============

These  preliminary  estimates  are  subject  to  change  as they  are  based  on
preliminary  appraisals  and as certain of the Company's  business  plans become
finalized.

As a result  of the  acquisition  and new  basis of  accounting,  the  Company's
financial  statements  for the  period  subsequent  to the  acquisition  are not
comparable to the Predecessor's financial statements for the period prior to the
acquisition. 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
fair market  value,  which  adjustment  was written off in the April 24, 1999 to
June 30, 1999 reporting period. In addition,  certain fees and expenses incurred
relating  to the above  transactions  were  expensed  in the period in which the
transactions were completed and are included in the  Predecessor's  consolidated
statement of operations in the caption "Transaction expenses".

The primary components of this caption 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.


Contingencies

Refer to Note H - Contingencies to the Notes to Condensed Consolidated Financial
Statements for a discussion of legal contingencies.


New Accounting Standards

In June 1998,  the  Financial  Accounting  Standards  Board 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, is effective for fiscal  quarters of fiscal years  beginning
after June 15, 2000. The  implementation of this new standard is not expected to
have a material  effect on our  consolidated  results of operations or financial
position.



                                      -28-

<PAGE>



Year 2000 Computer Issues

The Year 2000 issue is the result of computer  programs  being written using two
digits  rather  than four to define the  applicable  year,  as well as  hardware
designed with similar  constraints.  Some of our computer  programs and hardware
that have date  sensitive  functions may recognize a date using "00" as the year
1900  rather  than the year  2000.  This  could  result in a system  failure  or
miscalculations causing disruptions in operations including, among other things,
a temporary inability to process transactions,  receive invoices,  make payments
or engage in normal business transactions.

We are  taking  action to  resolve  those  Year 2000  issues  that are under our
control.  The overall effort encompasses our razors and blades,  cotton and foot
care and custom bar soap business  segments and covers  international as well as
domestic sites. We are centrally monitoring and controlling the effort; however,
there are designated  representatives at each affiliate and subsidiary  location
with responsibility for resolving site-specific Year 2000 issues. Following is a
description of the six-phase approach we are using:

      (1) Assessment - Identify and inventory  all  information  technology  and
          non-information technology system components that are possible sources
          of Year 2000  issues  and  assess  the  criticality  of  non-compliant
          systems in order to establish priorities for replacement or repair.

      (2) Strategy -  Determine  the  nature and extent of Year 2000  issues and
          select a remediation  strategy (i.e.,  renovate by modifying  existing
          system,  upgrade to a later version of the system,  replace with a new
          system, or retire the affected component). After the strategy has been
          selected,  develop  project  plans to address  non-compliant  systems,
          beginning with the most critical systems.

      (3) Remediation  -  Execute   project  plans   to  resolve   issues  with
          non-compliant systems.

      (4) Testing - Perform testing to evaluate  effectiveness of the corrective
          actions  taken or to  confirm  compliance  of  systems  that have been
          certified by third parties.

      (5) Implementation  - Implement  the  renovated,  upgraded,  and  replaced
          system components into the production environment.

      (6) Contingency  Planning - Continue   monitoring  readiness  and complete
          necessary contingency plans.

We have completed the Assessment,  Strategy,  Remediation and Testing phases for
substantially all of our information  technology and non-information  technology
system  components.   The  implementation  phase  has  been  completed  for  all
mission-critical systems.

Our most  mission-critical  system is the  "Corporate  ERP"  system,  which is a
widely available software package that we have moderately customized.  Eleven of
our  fifteen  manufacturing,   packaging  and  distribution  sites  utilize  the
Corporate    ERP   system   to    process    orders,    control    manufacturing
planning/work-order processing, distribute products, manage financial activities
and report  financial  results.  The eleven sites using the Corporate ERP system
include  corporate  headquarters,  U.S. and Mexican razors and blades sites, all
cotton and foot care facilities,  and all custom bar soap facilities.  The third
party vendor has responded  that all of its software  modules in use at American
Safety Razor and our  subsidiaries  are Year 2000 ready.  In addition,  the most
frequently  utilized system  functions have been tested by our users,  including
the internally developed system customizations.

We are currently  linked with 159 customers for exchange of documents  using the
Corporate EDI (electronic data  interchange)  system.  Our EDI software has been
upgraded to a Year 2000 compliant version that is now capable of supporting ANSI
standard  version  4010,  which  provides  for a 4 digit year and is the version
which  many of our EDI  customers  are  adopting  prior  to the Year  2000.  EDI
transactions  with a 2 digit year have also been tested and will  continue to be
supported  for  those  customers  who elect not to  convert  to a 4 digit  year.
Approximately  70% of the 159 EDI customers  have now been  implemented on 4010.
Testing with EDI customers will continue through the remainder of 1999.

All personal  computers have been Year 2000 compliance  tested and are Year 2000
ready from a hardware standpoint.  All PC software is scheduled to be updated to
the latest Year 2000 patch levels by December 31,

                                      -29-

<PAGE>



1999.

Our U.S.,  Canada and U.K. payroll systems are Year 2000 compliant and we expect
all of our remaining  international payroll systems will be compliant by the end
of 1999.

We have assessed the Year 2000 readiness of  non-information  technology systems
and equipment which may include embedded  technology such as  micro-controllers.
Our manufacturing,  assembly,  and packaging machines,  operating in each of our
razors and blades, cotton and foot care and custom bar soap segments were tested
and are now Year 2000 ready.

Our  "worst-case"  scenario at the present  time is the  disruption  of business
operations  as the result of supplier  Year 2000 related  failures,  which would
impair their  ability to adequately  provide us with  products or services.  Our
business   processes   depend  on  our   material   suppliers  as  well  as  our
infrastructure   suppliers   in  areas   such  as   electricity,   water,   gas,
communications and transportation. Year 2000 related failures by suppliers could
adversely affect business operations including payroll, manufacturing processes,
product  distribution,  material ordering,  customer-order  processing and other
support functions  dependent on the affected  supplier.  While we have a limited
ability to test and control our  suppliers'  and other third  parties' Year 2000
readiness, we are contacting major suppliers and other critical third parties to
obtain information as to their Year 2000 readiness. Razors and blades and cotton
and foot care  suppliers  were surveyed  regarding  Year 2000 issues and all key
suppliers have  indicated they plan to be compliant  during 1999. The custom bar
soap business held a meeting with its top suppliers during the second quarter of
1999 for a Year 2000 readiness review.

Considering  the number of internal  and external  systems  which we directly or
indirectly  use, it is likely that there will be instances of failure that could
cause  disruptions  in  business  processes.   The  likelihood  of  failures  in
infrastructure systems and in the supply chain cannot be estimated and therefore
the impact of these failures on business  operations is uncertain.  If we or any
critical third party supplier does not complete  necessary  upgrades as planned,
the Year 2000 issue may have a material impact on us.

Contingency  plans will be developed by December 1999, as needed, to address the
risk of  business  disruption  due to  supplier  Year  2000  issues.  As part of
contingency  planning,  we will  consider a number of options to mitigate  risk,
including building additional inventory prior to year 2000,  establishing manual
backup processes and arranging for alternate suppliers.

Since most of our Year 2000 issues are being  addressed  through  normal planned
upgrades,  incremental  external  Year 2000 costs are  expected  to be  minimal,
approximating $115,000. To date, the Company has spent approximately $95,000, of
which  approximately  $25,000 was spent during the second  quarter of 1999.  The
remaining  balance of $20,000 is planned to be spent during the third quarter of
1999.

Readers  are  cautioned  that  forward-looking   statements  contained  in  this
discussion  of  Year  2000  issues  should  be  read  in  conjunction  with  our
disclosures under the heading "Forward-Looking Statements" above.


Inflation

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


Item 3. Quantitative and Qualitative Disclosure of 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 2 -
Management's  Discussion  and  Analysis  of  Financial  Position  and Results of
Operations.


                                      -30-

<PAGE>




                           PART II, OTHER INFORMATION


Item 1.  Legal Proceedings

          The  information  called  for by  this  item is  provided  in Note H -
          Contingencies to Notes to Condensed  Consolidated Financial Statements
          under Part I, Item 1. - Financial Statements


Item 6.  Exhibits and Reports on Form 8-K

          a.   Exhibits - Exhibit 27 - Financial Data Schedule

          b.   Reports  on Form 8-K:  On May 7,  1999,  the  Registrant  filed a
               report  on  Form  8-K  reporting  that on  April  23,  1999,  RSA
               Acquisition Corp. (the "Purchaser"), a wholly owned subsidiary of
               RSA Holdings  Corp. of Delaware (the  "Parent"),  an affiliate of
               J.W.  Childs  Equity  Partners II, L.P.  ("JWCP"),  completed its
               previously  announced  tender  offer  (the  "Offer")  for all the
               outstanding  shares  of common  stock of  American  Safety  Razor
               Company  (the  "Company")  pursuant  to  the  provisions  of  the
               Agreement  and Plan of Merger,  dated as of February 12, 1999 (as
               amended  from time to time,  the  "Merger  Agreement")  among the
               Parent, the Purchaser and the Company.


                                      -31-

<PAGE>




                                   SIGNATURES





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



                                       AMERICAN SAFETY RAZOR COMPANY




August 4, 1999                         By /s/James D. Murphy
-------------------------                 --------------------------------
Date                                       James D. Murphy
                                           President




August 4, 1999                         By /s/Thomas G. Kasvin
-------------------------                 --------------------------------
Date                                       Thomas G. Kasvin
                                           Senior Vice President
                                           Chief Financial Officer


                                      -32-