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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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



For The Quarterly Period Ended September 26, 2003



| ̈ | 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: 333-19495



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RADNOR HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)



|Delaware (State or other jurisdiction of incorporation or organization)                                                     |  | 23-2674715 (I.R.S. Employer Identification Number)
|--------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|                                                                                                                            | 
|Three Radnor Corporate Center, Suite 300 100 Matsonford Road, Radnor, Pennsylvania (address of principal executive
offices) |  | 19087 (Zip Code)                                  



Registrants
telephone number, including area code: 610-341-9600



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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.  Yes  x   No ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes ̈No  x



The number of shares
outstanding of the Registrants common stock as of November 10, 2003:



|Class                                          |  | Number of Shares
|---------------------------------------------- |  | ----------------
|Voting Common Stock; $.10 par value            |  | 600             
|Nonvoting Common Stock; $.10 par value         |  | 245             
|Class B Nonvoting Common Stock; $.01 par value |  | 5,400           



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PART I  FINANCIAL INFORMATION



|Item 1. |  | FINANCIAL STATEMENTS
|------- |  | --------------------



RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



|                                                      |  | September 26,2003 |         |   | December 27,2002 |  
|----------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | -
|ASSETS                                                |  |                   |         |   |                  |  
|CURRENT ASSETS:                                       |  |                   |         |   |                  |  
|Cash                                                  |  | $                 | 1,896   |   |                  | $
|Accounts receivable, net                              |  |                   | 42,209  |   |                  |  
|Inventories, net                                      |  |                   | 39,802  |   |                  |  
|Prepaid expenses and other                            |  |                   | 8,909   |   |                  |  
|Deferred tax asset                                    |  |                   | 2,146   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|Total current assets                                  |  |                   | 94,962  |   |                  |  
|                                                      |  |                   |         |   |                  |  
|PROPERTY, PLANT AND EQUIPMENT, at cost:               |  |                   | 264,054 |   |                  |  
|LESS  ACCUMULATED DEPRECIATION                       |  |                   | (86,676 | ) |                  |  
|                                                      |  |                   |         |   |                  |  
|NET PROPERTY, PLANT AND EQUIPMENT                     |  |                   | 177,378 |   |                  |  
|                                                      |  |                   |         |   |                  |  
|INVESTMENTS IN UNCONSOLIDATED AFFILIATES              |  |                   | 16,921  |   |                  |  
|OTHER ASSETS                                          |  |                   | 11,650  |   |                  |  
|                                                      |  |                   |         |   |                  |  
|Total assets                                          |  | $                 | 300,911 |   |                  | $
|                                                      |  |                   |         |   |                  |  
|LIABILITIES AND STOCKHOLDERS EQUITY                  |  |                   |         |   |                  |  
|CURRENT LIABILITIES:                                  |  |                   |         |   |                  |  
|Accounts payable                                      |  | $                 | 41,813  |   |                  | $
|Accrued liabilities                                   |  |                   | 9,594   |   |                  |  
|Current portion of long-term debt                     |  |                   | 8,490   |   |                  |  
|Current portion of capitalized lease obligations      |  |                   | 1,005   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|Total current liabilities                             |  |                   | 60,902  |   |                  |  
|                                                      |  |                   |         |   |                  |  
|LONG-TERM DEBT, net of current portion                |  |                   | 224,386 |   |                  |  
|                                                      |  |                   |         |   |                  |  
|CAPITALIZED LEASE OBLIGATIONS, net of current portion |  |                   | 1,020   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|DEFERRED TAX LIABILITY                                |  |                   | 4,506   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|OTHER NON-CURRENT LIABILITIES                         |  |                   | 1,456   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|COMMITMENTS AND CONTINGENCIES                         |  |                   |        |   |                  |  
|STOCKHOLDERS EQUITY:                                 |  |                   |         |   |                  |  
|Common stock                                          |  |                   | 1       |   |                  |  
|Additional paid-in capital                            |  |                   | 19,387  |   |                  |  
|Retained deficit                                      |  |                   | (10,151 | ) |                  |  
|Cumulative translation adjustment                     |  |                   | (596    | ) |                  |  
|                                                      |  |                   |         |   |                  |  
|Total stockholders equity                            |  |                   | 8,641   |   |                  |  
|                                                      |  |                   |         |   |                  |  
|Total liabilities and stockholders equity            |  | $                 | 300,911 |   |                  | $
|                                                      |  |                   |         |   |                  |  



The accompanying notes
are an integral part of these condensed consolidated financial statements.



2



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)



|                                                              |  | For the three months ended |        |   | For the nine months ended |  
|------------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | -
|                                                              |  | September 26,2003          |        |   | September 27,2002         |  
|NET SALES                                                     |  | $                          | 86,929 |   |                           | $
|COST OF GOODS SOLD                                            |  |                            | 70,010 |   |                           |  
|                                                              |  |                            |        |   |                           |  
|GROSS PROFIT                                                  |  |                            | 16,919 |   |                           |  
|                                                              |  |                            |        |  
|OPERATING EXPENSES:                                           |  |                            |        |   |                           |  
|Distribution                                                  |  |                            | 6,227  |   |                           |  
|Selling, general and administrative                           |  |                            | 6,839  |   |                           |  
|Other expenses (note 5)                                       |  |                            |       |   |                           |  
|                                                              |  |                            |        |   |                           |  
|INCOME FROM OPERATIONS                                        |  |                            | 3,853  |   |                           |  
|                                                              |  |                            |        |  
|Interest, net                                                 |  |                            | 5,089  |   |                           |  
|Income from unconsolidated affiliates                         |  |                            | (792   | ) |                           |  
|Other, net                                                    |  |                            | 15     |   |                           |  
|                                                              |  |                            |        |   |                           |  
|INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS |  |                            | (459   | ) |                           |  
|                                                              |  |                            |        |  
|PROVISION (BENEFIT) FOR INCOME TAXES:                         |  |                            |        |   |                           |  
|Current                                                       |  |                            | 125    |   |                           |  
|Deferred                                                      |  |                            | (299   | ) |                           |  
|                                                              |  |                            |        |   |                           |  
|                                                              |  |                            | (174   | ) |                           |  
|                                                              |  |                            |        |   |                           |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS                      |  |                            | (285   | ) |                           |  
|LOSS FROM DISCONTINUED OPERATIONS, net of tax                 |  |                            |       |   |                           |  
|                                                              |  |                            |        |   |                           |  
|NET INCOME (LOSS)                                             |  | $                          | (285   | ) |                           | $
|                                                              |  |                            |        |   |                           |  



The accompanying notes
are an integral part of these condensed consolidated financial statements.





3



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



|                                                                                          |  | For the nine months ended |         
|----------------------------------------------------------------------------------------- |  | ------------------------- | --------
|                                                                                          |  | September 26,2003         |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                     |  |                           |         
|Net income (loss)                                                                         |  | $                         | (5,488  
|Adjustments to reconcile net income (loss) to net cash used in operating activities:      |  |                           |         
|Depreciation and amortization                                                             |  |                           | 13,341  
|Deferred income taxes                                                                     |  |                           | (3,759  
|Income from unconsolidated affiliates                                                     |  |                           | (2,304  
|Loss from discontinued operations                                                         |  |                           |        
|Changes in operating assets and liabilities, net of effects of disposition of businesses: |  |                           |         
|Accounts receivable, net                                                                  |  |                           | (3,257  
|Inventories, net                                                                          |  |                           | (958    
|Prepaid expenses and other                                                                |  |                           | (3,726  
|Accounts payable                                                                          |  |                           | 6,238   
|Accrued liabilities and other                                                             |  |                           | (4,302  
|                                                                                          |  |                           |         
|Net cash used in continuing operations                                                    |  |                           | (4,215  
|Net cash used in discontinued operations                                                  |  |                           |        
|                                                                                          |  |                           |         
|Net cash used in operating activities                                                     |  |                           | (4,215  
|                                                                                          |  |                           |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                     |  |                           |         
|Capital expenditures                                                                      |  |                           | (9,329  
|Distributions from unconsolidated affiliates                                              |  |                           | 4,241   
|Investments in unconsolidated affiliates                                                  |  |                           | (4,123  
|Increase in other assets                                                                  |  |                           | (1,607  
|                                                                                          |  |                           |         
|Net cash used in investing activities                                                     |  |                           | (10,818 
|                                                                                          |  |                           |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                     |  |                           |         
|Proceeds from borrowings                                                                  |  |                           | 199,054 
|Repayment of debt                                                                         |  |                           | (179,400
|Payments on capitalized lease obligations                                                 |  |                           | (713    
|Payment of financing costs                                                                |  |                           | (5,210  
|                                                                                          |  |                           |         
|Net cash provided by financing activities                                                 |  |                           | 13,731  
|                                                                                          |  |                           |         
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                   |  |                           | (861    
|                                                                                          |  |                           |         
|NET DECREASE IN CASH                                                                      |  |                           | (2,163  
|CASH, beginning of period                                                                 |  |                           | 4,059   
|                                                                                          |  |                           |         
|CASH, end of period                                                                       |  | $                         | 1,896   
|                                                                                          |  |                           |         
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                                       |  |                           |         
|Cash paid during the period for interest                                                  |  | $                         | 15,397  
|                                                                                          |  |                           |         
|Cash paid during the period for income taxes, net of refunds                              |  | $                         | 1,055   
|                                                                                          |  |                           |         



The accompanying notes
are an integral part of these condensed consolidated financial statements.



4



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

SUMMARY BY OPERATING SEGMENTS

(In thousands)

(Unaudited)



|                                        |  | For the three months ended |        |   | For the nine months ended |  
|--------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | -
|                                        |  | September 26,2003          |        |   | September 27,2002         |  
|Net Sales to Unaffiliated Customers:    |  |                            |        |   |                           |  
|Packaging                               |  | $                          | 48,790 |   |                           | $
|Specialty Chemicals                     |  |                            | 40,446 |   |                           |  
|Corporate and Other                     |  |                            |       |   |                           |  
|Transfers Between Operating Segments(1) |  |                            | (2,307 | ) |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | 86,929 |   |                           | $
|                                        |  |                            |        |   |                           |  
|Income (Loss) From Operations:          |  |                            |        |   |                           |  
|Packaging                               |  | $                          | 4,719  |   |                           | $
|Specialty Chemicals                     |  |                            | 608    |   |                           |  
|Corporate and Other                     |  |                            | (1,474 | ) |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | 3,853  |   |                           | $
|                                        |  |                            |        |   |                           |  
|Income (Loss) Before Income Taxes:      |  |                            |        |   |                           |  
|Packaging                               |  | $                          | 2,462  |   |                           | $
|Specialty Chemicals                     |  |                            | (345   | ) |                           |  
|Corporate and Other                     |  |                            | (2,576 | ) |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | (459   | ) |                           | $
|                                        |  |                            |        |   |                           |  



|(1) | Transfers between operating segments reflect the sale of expandable polystyrene (EPS) from the specialty chemicals operating segment to the packaging
operating segment.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

SUMMARY BY GEOGRAPHIC REGION

(In thousands)

(Unaudited)



|                                        |  | For the three months ended |        |   | For the nine months ended |  
|--------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | -
|                                        |  | September 26,2003          |        |   | September 27,2002         |  
|Net Sales to Unaffiliated Customers:    |  |                            |        |   |                           |  
|United States                           |  | $                          | 56,796 |   |                           | $
|Canada                                  |  |                            | 8,656  |   |                           |  
|Europe                                  |  |                            | 23,784 |   |                           |  
|Transfers Between Geographic Regions(1) |  |                            | (2,307 | ) |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | 86,929 |   |                           | $
|                                        |  |                            |        |   |                           |  
|Income From Operations:                 |  |                            |        |   |                           |  
|United States                           |  | $                          | 2,038  |   |                           | $
|Canada                                  |  |                            | 903    |   |                           |  
|Europe                                  |  |                            | 912    |   |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | 3,853  |   |                           | $
|                                        |  |                            |        |   |                           |  
|Income (Loss) Before Income Taxes:      |  |                            |        |   |                           |  
|United States                           |  | $                          | (1,457 | ) |                           | $
|Canada                                  |  |                            | 617    |   |                           |  
|Europe                                  |  |                            | 381    |   |                           |  
|                                        |  |                            |        |   |                           |  
|Consolidated                            |  | $                          | (459   | ) |                           | $
|                                        |  |                            |        |   |                           |  





|(1) | Transfers between geographic regions reflect the sale of EPS bead from the Companys Canadian specialty chemicals operations to its domestic food packaging
operations as well as the sale of product from the Companys domestic food packaging operations to its European food packaging operations.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | BASIS OF PRESENTATION
|-- | ---------------------



The condensed consolidated financial statements included herein have been prepared by Radnor Holdings Corporation and subsidiaries (collectively,
Radnor or the Company) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company, the statements include all adjustments (which include only normal recurring adjustments)
required for a fair statement of financial position, results of operations and cash flows for such periods. The results of operations for the interim periods are not necessarily indicative of the results for a full year, due to the seasonality
inherent in some of the Companys operations and the possibility for general economic changes.



During fiscal 2002, the Company changed its reporting of sales and marketing rebates to include them as an offset to revenues in accordance with Emerging
Issues Task Force Issue No. 00-22. Previously they were included in selling, general and administrative expenses. The statements of operations of the prior period have been adjusted to reflect this reclassification. Certain other reclassifications
have been made to the prior years presentations to conform to the current years presentation.



|2. | DISCONTINUED OPERATIONS
|-- | -----------------------



Pursuant to an asset purchase agreement among Benchmark Holdings, Inc. (Benchmark), WinCup Holdings, Inc. (WinCup), and the Fort
James Corporation, formerly James River Paper Company, Inc. (Fort James), dated October 31, 1995, Benchmark and WinCup sold to Fort James all of the assets of Benchmarks cutlery and straws business and all of the assets of
WinCups thermoformed cup business, except for cash, accounts receivable and prepaid assets. The operations of Benchmarks cutlery and straws business and WinCups thermoformed cup business were accounted for as discontinued
operations. Discontinued operations represent legal costs incurred in conjunction with the above mentioned business. The Company has no further exposure to this contingent liability.



|3. | INVENTORIES
|-- | -----------



The components of inventories were as follows (in thousands):



|                |  | September 26,2003 |        | December 27,2002
|--------------- |  | ----------------- | ------ | ----------------
|Raw Materials   |  | $                 | 8,903  |                 
|Work in Process |  |                   | 1,706  |                 
|Finished Goods  |  |                   | 29,193 |                 
|                |  |                   |        |                 
|                |  | $                 | 39,802 |                 
|                |  |                   |        |                 



|4. | INVESTMENT IN RADNOR INVESTMENTS, L.P.
|-- | --------------------------------------



The Company serves as the limited partner and owns 20% of Radnor Investments, L.P. which was formed for the purpose of making investments generally in
privately-held companies in a variety of industries. The Company currently accounts for its investment under the equity method of accounting. As of September 26, 2003 and December 27, 2002, the Companys investment in Radnor Investments L.P.
totaled $15.5 million and $13.3 million, respectively.





7



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A summary of the results of
operations for Radnor Investments, L.P. for the three and nine-month periods ended September 30, 2003 and 2002 is as follows (in thousands):



|                                                         |  | Three Months Ended |       | Nine Months Ended
|-------------------------------------------------------- |  | ------------------ | ----- | -----------------
|                                                         |  | September 30,2003  |       | September 30,2002
|Interest income                                          |  | $                  | 37    |                  
|                                                         |  |                    |       |                  
|Net income before unrealized appreciation of investments |  |                    | 17    |                  
|Net unrealized appreciation of investments               |  |                    | 3,255 |                  
|                                                         |  |                    |       |                  
|Net increase in partners capital from operations        |  | $                  | 3,272 |                  
|                                                         |  |                    |       |                  

The net increase in partners capital from operations resulted primarily from unrealized gains
on investments for which there is no established market.



|5. | LONG-TERM DEBT
|-- | --------------



On March 11, 2003, the Company issued $135.0 million of 11.0% Senior Notes due 2010 and amended its domestic revolving credit facility to include a $45.0
million term loan and to increase the revolving credit commitment from $35.0 million to $45.0 million. The proceeds were used to repay the then outstanding $159.5 million 10.0% Series A and Series B Senior Notes due 2003 and outstanding borrowings
under the existing revolving credit facilities. On October 27, 2003, the Company amended certain financial covenants in its domestic credit facility.



The Company recorded $1.8 million of other expenses related to the extinguishment of the long-term debt described above, which included the $1.0 million
write-off of deferred financing costs and debt premium related to the Companys 10.0% Series A and Series B Senior Notes due 2003, as well as $0.8 million of personnel costs directly related to the debt extinguishment.



|6. | INTEREST EXPENSE
|-- | ----------------



Included in interest expense was $181,000 and $375,000 of amortization of deferred financing costs for the three months ended September 26, 2003 and
September 27, 2002, respectively, and $702,000 and $1,124,000 of amortization of deferred financing costs for the nine months ended September 26, 2003 and September 27, 2002, respectively. Premium amortization related to the issuance of the
Companys 10% Series B Senior Notes, which were repaid on March 11, 2003, of $105,000 for the three months ended September 27, 2002 and $105,000 and $315,000 for the nine months ended September 26, 2003 and September 27, 2002, respectively, was
also included in interest expense.



8



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|7. | COMPREHENSIVE INCOME
|-- | --------------------



Comprehensive income is the total of net income (loss) and non-owner changes in equity. The Company had comprehensive loss as follows (in thousands):



|                                        |  | Three Months Ended |      |   | Nine Months Ended
|--------------------------------------- |  | ------------------ | ---- | - | -----------------
|                                        |  | September 26,2003  |      |   | September 27,2002
|Net Income (Loss)                       |  | $                  | (285 | ) |                  
|Foreign Currency Translation Adjustment |  |                    | 286  |   |                  
|                                        |  |                    |      |   |                  
|Comprehensive Income (Loss)             |  | $                  | 1    |   |                  
|                                        |  |                    |      |   |                  



|8. | NEW ACCOUNTING STANDARDS
|-- | ------------------------



In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest
Entities an interpretation of ARB No. 51. This Interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Interpretation applies immediately to
variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period ending after December 15, 2003, to
variable interest entities in which an entity holds a variable interest that it acquired prior to February 1, 2003. Based on the Companys most recent evaluation, the Company believes it will have to consolidate Radnor Investments, L.P.
beginning with the Companys Annual Report on Form 10-K for the year ending December 26, 2003. The Company expects this will cause an increase to the investment assets on its consolidated balance sheet with minority interest being recorded for
the 80% of Radnor Investments, L.P. owned by the general partner of Radnor Investments, L.P. The Company does not anticipate that the adoption of FIN 46 will have any material effect on the consolidated net income or the cash flow of the Company.



In December 2002, the FASB issued Statement of Financial
Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure. SFAS No. 148 amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based
Compensation, to require more prominent and frequent disclosures in financial statements. Also, SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based
employee compensation. The Company has included the interim disclosures prescribed by SFAS No. 148.



|9. | STOCK-BASED COMPENSATION
|-- | ------------------------



At September 26, 2003, the Company had a stock-based compensation plan as described in Note 8 to the consolidated financial statements in the
Companys Form 10-K/A (amendment no. 2) for fiscal 2002. The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock option plan. As of
September 26, 2003, all previously issued stock options were fully vested. Accordingly, no compensation expense has been recognized in net income for stock options, as options granted had an exercise price equal to the market value of the underlying
common stock on the date of grant.





9



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The following table illustrates the effect on net income if the Company had applied the fair value
recognition provisions of SFAS No. 123 to its stock option plan (in thousands):



|                  |  | Three Months Ended |      | Nine Months Ended
|----------------- |  | ------------------ | ---- | -----------------
|                  |  | September 26,2003  |      |                  
|Net Income (Loss) |  |                    |      |                  
|As reported       |  | $                  | (285 | )                
|Pro forma         |  |                    | (285 | )                



|10. | SUPPLEMENTAL FINANCIAL INFORMATION
|--- | ----------------------------------



Radnor Holdings Corporation is a holding company that has no operations separate from its investment in subsidiaries. The Companys $135.0 million of
11.0% Senior Notes due 2010 are fully and unconditionally jointly and severally guaranteed by substantially all of the Companys domestic subsidiaries, all of which are 100% owned by the Company.



As a holding company, the Company is dependent upon dividends and other
payments from its subsidiaries to generate the funds necessary to meet its obligations. Subject to certain limitations, the Company is, and will continue to be, able to control its receipt of dividends and other payments from its subsidiaries.



There are no direct prohibitions on the ability of the Company
or any guarantor to obtain funds from its respective subsidiaries by dividend or by loan, but certain of the Companys foreign subsidiaries credit agreements contain covenants, such as minimum debt to equity and current assets to current
liabilities ratios, that indirectly limit the ability of these subsidiaries to transfer funds to the Company. As of September 26, 2003 and December 27, 2002, the net assets of these foreign subsidiaries totaled $30.4 million and $26.8 million,
respectively.



The following consolidating financial statements
of Radnor Holdings Corporation and subsidiaries have been prepared pursuant to Rule 3-10 of Regulation S-X:





10



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

As of September 26, 2003

(In thousands)



|                                                                    |  | HoldingCompany |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|------------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | --------
|ASSETS                                                              |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|CURRENT ASSETS:                                                     |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Cash                                                                |  | $              |        |   |                       | $ | 19      |                           |  | $ | 1,877        |   |  | $            |        
|Accounts receivable, net                                            |  |                | 24      |   |                       |   | 22,168  |                           |  |   | 27,123       |   |  |              | (7,106  
|Inventories, net                                                    |  |                |        |   |                       |   | 32,511  |                           |  |   | 7,291        |   |  |              |        
|Intercompany receivable                                             |  |                |        |   |                       |   | 329     |                           |  |   | 26,188       |   |  |              | (26,517 
|Prepaid expenses and other                                          |  |                | 81      |   |                       |   | 8,957   |                           |  |   | 1,716        |   |  |              | (1,845  
|Deferred tax asset                                                  |  |                | (13     | ) |                       |   | 2,159   |                           |  |   |             |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total current assets                                                |  |                | 92      |   |                       |   | 66,143  |                           |  |   | 64,195       |   |  |              | (35,468 
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|PROPERTY, PLANT AND EQUIPMENT, at cost:                             |  |                |        |   |                       |   | 207,919 |                           |  |   | 56,135       |   |  |              |        
|LESS  ACCUMULATED DEPRECIATION                                     |  |                |        |   |                       |   | (68,417 | )                         |  |   | (18,259      | ) |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|NET PROPERTY, PLANT AND EQUIPMENT                                   |  |                |        |   |                       |   | 139,502 |                           |  |   | 37,876       |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|INTERCOMPANY RECEIVABLE                                             |  |                | 33,879  |   |                       |   | 26,478  |                           |  |   | 343          |   |  |              | (60,700 
|INVESTMENTS IN SUBSIDIARIES                                         |  |                | 106,153 |   |                       |   | 25,078  |                           |  |   |             |   |  |              | (131,231
|INVESTMENTS IN UNCONSOLIDATED AFFILIATES                            |  |                |        |   |                       |   |        |                           |  |   | 16,921       |   |  |              |        
|OTHER NON-CURRENT ASSETS                                            |  |                | 4,768   |   |                       |   | 6,310   |                           |  |   | 572          |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total assets                                                        |  | $              | 144,892 |   |                       | $ | 263,511 |                           |  | $ | 119,907      |   |  | $            | (227,399
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|CURRENT LIABILITIES:                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Accounts payable                                                    |  | $              |        |   |                       | $ | 24,786  |                           |  | $ | 17,819       |   |  | $            | (792    
|Accrued liabilities                                                 |  |                | 399     |   |                       |   | 8,844   |                           |  |   | 2,314        |   |  |              | (1,963  
|Intercompany payable                                                |  |                |        |   |                       |   | 8,148   |                           |  |   | 2,444        |   |  |              | (10,592 
|Current portion of long-term debt and capitalized lease obligations |  |                |        |   |                       |   | 8,548   |                           |  |   | 947          |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total current liabilities                                           |  |                | 399     |   |                       |   | 50,326  |                           |  |   | 23,524       |   |  |              | (13,347 
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|LONG-TERM DEBT, net of current portion                              |  |                | 135,000 |   |                       |   | 96,656  |                           |  |   | 9,290        |   |  |              | (16,560 
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|CAPITALIZED LEASE OBLIGATIONS, net of current portion               |  |                |        |   |                       |   | 1,020   |                           |  |   |             |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|INTERCOMPANY PAYABLE                                                |  |                | 64,167  |   |                       |   | 6,268   |                           |  |   | 17,136       |   |  |              | (87,571 
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|DEFERRED TAX LIABILITY                                              |  |                | (9,494  | ) |                       |   | 9,305   |                           |  |   | 4,576        |   |  |              | 119     
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|OTHER NON-CURRENT LIABILITIES                                       |  |                |        |   |                       |   | 1,454   |                           |  |   | 2            |   |  |              |        
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|COMMITMENTS AND CONTINGENCIES                                       |  |                |        |   |                       |   |        |                           |  |   |             |   |  |              |        
|STOCKHOLDERS EQUITY:                                               |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Common stock                                                        |  |                | 1       |   |                       |   | 4       |                           |  |   | 22           |   |  |              | (26     
|Additional paid-in capital                                          |  |                | 9,164   |   |                       |   | 97,604  |                           |  |   | 22,620       |   |  |              | (110,001
|Retained earnings (deficit)                                         |  |                | (54,345 | ) |                       |   | 5,216   |                           |  |   | 38,971       |   |  |              | 7       
|Cumulative translation adjustment                                   |  |                |        |   |                       |   | (4,342  | )                         |  |   | 3,766        |   |  |              | (20     
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total stockholders equity (deficit)                                |  |                | (45,180 | ) |                       |   | 98,482  |                           |  |   | 65,379       |   |  |              | (110,040
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         
|Total liabilities and stockholders equity                          |  | $              | 144,892 |   |                       | $ | 263,511 |                           |  | $ | 119,907      |   |  | $            | (227,399
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |         



11



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the three months ended September
26, 2003

(In thousands)



|                                      |  | Holding Company |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|------------------------------------- |  | --------------- | ------ | - | ---------------------- | - | ------ | -------------------------- |  | - | ------------ | - |  | ------------ | ------
|NET SALES                             |  | $               |       |   |                        | $ | 57,463 |                            |  | $ | 32,440       |   |  | $            | (2,974
|COST OF GOODS SOLD                    |  |                 |       |   |                        |   | 46,238 |                            |  |   | 26,746       |   |  |              | (2,974
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|GROSS PROFIT                          |  |                 |       |   |                        |   | 11,225 |                            |  |   | 5,694        |   |  |              |      
|                                      |  |                 |        |   |                       
|OPERATING EXPENSES:                   |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|Distribution                          |  |                 |       |   |                        |   | 4,321  |                            |  |   | 1,906        |   |  |              |      
|Selling, general and administrative   |  |                 | 6      |   |                        |   | 4,850  |                            |  |   | 1,983        |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|INCOME (LOSS) FROM OPERATIONS         |  |                 | (6     | ) |                        |   | 2,054  |                            |  |   | 1,805        |   |  |              |      
|                                      |  |                 |        |   |                       
|Interest, net                         |  |                 | 2,304  |   |                        |   | 2,222  |                            |  |   | 563          |   |  |              |      
|Income from unconsolidated affiliates |  |                 |       |   |                        |   |       |                            |  |   | (792         | ) |  |              |      
|Other, net                            |  |                 |       |   |                        |   | (239   | )                          |  |   | 254          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|INCOME (LOSS) BEFORE INCOME TAXES     |  |                 | (2,310 | ) |                        |   | 71     |                            |  |   | 1,780        |   |  |              |      
|                                      |  |                 |        |   |                       
|PROVISION (BENEFIT) FOR INCOME TAXES: |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|Current                               |  |                 |       |   |                        |   | 4      |                            |  |   | 121          |   |  |              |      
|Deferred                              |  |                 | (604   | ) |                        |   | (163   | )                          |  |   | 468          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|                                      |  |                 | (604   | ) |                        |   | (159   | )                          |  |   | 589          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|NET INCOME (LOSS)                     |  | $               | (1,706 | ) |                        | $ | 230    |                            |  | $ | 1,191        |   |  | $            |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       



12



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the nine months ended September
26, 2003

(In thousands)



|                                      |  | Holding Company |        |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|------------------------------------- |  | --------------- | ------ | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ------------ | ------
|NET SALES                             |  | $               |       |   |                        | $ | 166,171 |                            |  | $ | 92,868       |   |  | $            | (8,622
|COST OF GOODS SOLD                    |  |                 |       |   |                        |   | 136,151 |                            |  |   | 77,657       |   |  |              | (8,922
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|GROSS PROFIT                          |  |                 |       |   |                        |   | 30,020  |                            |  |   | 15,211       |   |  |              | 300   
|                                      |  |                 |        |   |                       
|OPERATING EXPENSES:                   |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|Distribution                          |  |                 |       |   |                        |   | 12,002  |                            |  |   | 5,097        |   |  |              |      
|Selling, general and administrative   |  |                 | 11     |   |                        |   | 15,515  |                            |  |   | 6,211        |   |  |              |      
|Other expenses (Note 5)               |  |                 | 1,013  |   |                        |   | 825     |                            |  |   |             |   |  |              |      
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|INCOME (LOSS) FROM OPERATIONS         |  |                 | (1,024 | ) |                        |   | 1,678   |                            |  |   | 3,903        |   |  |              | 300   
|                                      |  |                 |        |   |                       
|Interest, net                         |  |                 | 4,072  |   |                        |   | 9,886   |                            |  |   | 1,625        |   |  |              |      
|Income from unconsolidated affiliates |  |                 |       |   |                        |   |        |                            |  |   | (2,304       | ) |  |              |      
|Other, net                            |  |                 |       |   |                        |   | (633    | )                          |  |   | 1,062        |   |  |              |      
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|INCOME (LOSS) BEFORE INCOME TAXES     |  |                 | (5,096 | ) |                        |   | (7,575  | )                          |  |   | 3,520        |   |  |              | 300   
|                                      |  |                 |        |   |                       
|PROVISION (BENEFIT) FOR INCOME TAXES: |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|Current                               |  |                 |       |   |                        |   | 12      |                            |  |   | 384          |   |  |              |      
|Deferred                              |  |                 | (1,897 | ) |                        |   | (2,586  | )                          |  |   | 724          |   |  |              |      
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|                                      |  |                 | (1,897 | ) |                        |   | (2,574  | )                          |  |   | 1,108        |   |  |              |      
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       
|NET INCOME (LOSS)                     |  | $               | (3,199 | ) |                        | $ | (5,001  | )                          |  | $ | 2,412        |   |  | $            | 300   
|                                      |  |                 |        |   |                        |   |         |                            |  |   |              |   |  |              |       



RADNOR HOLDINGS
CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the nine months ended September 26, 2003

(In thousands)



|                                                                            |  | Holding Company |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|--------------------------------------------------------------------------- |  | --------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ------------ | ------
|Net cash provided by (used in) operating activities:                        |  | $               | (5,536  | ) |                        | $ | (5,907  | )                          |  | $ | 5,509        |   |  | $            | 1,719 
|Cash flows from investing activities:                                       |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Capital expenditures                                                        |  |                 |        |   |                        |   | (8,666  | )                          |  |   | (663         | ) |  |              |      
|Change in other assets                                                      |  |                 | (7,267  | ) |                        |   | 1,083   |                            |  |   | 3,997        |   |  |              | 698   
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Net cash provided by (used in) investing activities                         |  |                 | (7,267  | ) |                        |   | (7,583  | )                          |  |   | 3,334        |   |  |              | 698   
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Cash flows from financing activities:                                       |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Net borrowings (payments) on bank financed debt and unsecured notes payable |  |                 | (24,500 | ) |                        |   | 40,868  |                            |  |   | 3,320        |   |  |              | (34   
|Net payments on capitalized lease obligations                               |  |                 |        |   |                        |   | (713    | )                          |  |   |             |   |  |              |      
|Payment of financing costs                                                  |  |                 |        |   |                        |   | (4,546  | )                          |  |   |             |   |  |              | (664  
|Change in intercompany, net                                                 |  |                 | 37,303  |   |                        |   | (21,624 | )                          |  |   | (13,960      | ) |  |              | (1,719
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Net cash provided by (used in) financing activities                         |  |                 | 12,803  |   |                        |   | 13,985  |                            |  |   | (10,640      | ) |  |              | (2,417
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Effect of exchange rate changes on cash                                     |  |                 |        |   |                        |   | (737    | )                          |  |   | (124         | ) |  |              |      
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Net decrease in cash                                                        |  |                 |        |   |                        |   | (242    | )                          |  |   | (1,921       | ) |  |              |      
|Cash, beginning of period                                                   |  |                 |        |   |                        |   | 261     |                            |  |   | 3,798        |   |  |              |      
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       
|Cash, end of period                                                         |  | $               |        |   |                        | $ | 19      |                            |  | $ | 1,877        |   |  | $            |      
|                                                                            |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |       



13



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 27, 2002

(In thousands)



|                                                                    |  | Holding Company |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |         
|------------------------------------------------------------------- |  | --------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ------------ | --------
|ASSETS                                                              |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|CURRENT ASSETS:                                                     |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Cash                                                                |  | $               |        |   |                        | $ | 261     |                            |  | $ | 3,798        |   |  | $            |        
|Accounts receivable, net                                            |  |                 |        |   |                        |   | 21,390  |                            |  |   | 20,188       |   |  |              | (5,413  
|Inventories, net                                                    |  |                 |        |   |                        |   | 29,578  |                            |  |   | 8,137        |   |  |              |        
|Intercompany receivable                                             |  |                 |        |   |                        |   | (1,660  | )                          |  |   | 10,791       |   |  |              | (9,131  
|Prepaid expenses and other                                          |  |                 | 1,840   |   |                        |   | 6,280   |                            |  |   | 840          |   |  |              | (1,845  
|Deferred tax asset                                                  |  |                 |        |   |                        |   | 1,838   |                            |  |   |             |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Total current assets                                                |  |                 | 1,840   |   |                        |   | 57,687  |                            |  |   | 43,754       |   |  |              | (16,389 
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|PROPERTY, PLANT AND EQUIPMENT, at cost:                             |  |                 |        |   |                        |   | 199,253 |                            |  |   | 50,164       |   |  |              |        
|LESS  ACCUMULATED DEPRECIATION                                     |  |                 |        |   |                        |   | (59,742 | )                          |  |   | (14,179      | ) |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|NET PROPERTY, PLANT AND EQUIPMENT                                   |  |                 |        |   |                        |   | 139,511 |                            |  |   | 35,985       |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|INTERCOMPANY RECEIVABLE                                             |  |                 | 32,641  |   |                        |   | 1,990   |                            |  |   | (266         | ) |  |              | (34,365 
|INVESTMENTS IN SUBSIDIARIES                                         |  |                 | 106,153 |   |                        |   | 24,235  |                            |  |   | 843          |   |  |              | (131,231
|INVESTMENTS IN UNCONSOLIDATED AFFILIATES                            |  |                 |        |   |                        |   |        |                            |  |   | 14,735       |   |  |              |        
|OTHER NON-CURRENT ASSETS                                            |  |                 | 1,809   |   |                        |   | 4,408   |                            |  |   | 792          |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Total assets                                                        |  | $               | 142,443 |   |                        | $ | 227,831 |                            |  | $ | 95,843       |   |  | $            | (181,985
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|CURRENT LIABILITIES:                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Accounts payable                                                    |  | $               |        |   |                        | $ | 23,008  |                            |  | $ | 11,601       |   |  | $            | (468    
|Accrued liabilities                                                 |  |                 | 1,161   |   |                        |   | 13,725  |                            |  |   | 2,231        |   |  |              | (1,963  
|Intercompany payable                                                |  |                 |        |   |                        |   | 8,601   |                            |  |   | (3,171       | ) |  |              | (5,430  
|Current portion of long-term debt and capitalized lease obligations |  |                 |        |   |                        |   | 6,811   |                            |  |   | 878          |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Total current liabilities                                           |  |                 | 1,161   |   |                        |   | 52,145  |                            |  |   | 11,539       |   |  |              | (7,861  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|LONG-TERM DEBT, net of current portion                              |  |                 | 159,886 |   |                        |   | 57,824  |                            |  |   | 4,778        |   |  |              | (16,560 
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|CAPITALIZED LEASE OBLIGATIONS, net of current portion               |  |                 |        |   |                        |   | 1,597   |                            |  |   |             |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|INTERCOMPANY PAYABLE                                                |  |                 | 25,736  |   |                        |   | 5,074   |                            |  |   | 16,553       |   |  |              | (47,363 
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|DEFERRED TAX LIABILITY                                              |  |                 | (3,991  | ) |                        |   | 7,521   |                            |  |   | 4,167        |   |  |              | 119     
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|OTHER NON-CURRENT LIABILITIES                                       |  |                 |        |   |                        |   | 1,745   |                            |  |   | 1            |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|COMMITMENTS AND CONTINGENCIES                                       |  |                 |        |   |                        |   |        |                            |  |   |             |   |  |              |        
|STOCKHOLDERS EQUITY:                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Common stock                                                        |  |                 | 1       |   |                        |   | 4       |                            |  |   | 22           |   |  |              | (26     
|Additional paid-in capital                                          |  |                 | 9,164   |   |                        |   | 96,761  |                            |  |   | 23,463       |   |  |              | (110,001
|Retained earnings (deficit)                                         |  |                 | (49,514 | ) |                        |   | 10,928  |                            |  |   | 34,216       |   |  |              | (293    
|Cumulative translation adjustment                                   |  |                 |        |   |                        |   | (5,768  | )                          |  |   | 1,104        |   |  |              |        
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Total stockholders equity (deficit)                                |  |                 | (40,349 | ) |                        |   | 101,925 |                            |  |   | 58,805       |   |  |              | (110,320
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         
|Total liabilities and stockholders                                 |  | $               | 142,443 |   |                        | $ | 227,831 |                            |  | $ | 95,843       |   |  | $            | (181,985
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |         





14



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the three months ended September
27, 2002

(In thousands)



|                                      |  | Holding Company |        |   | Guarantor Subsidiaries |   |        | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|------------------------------------- |  | --------------- | ------ | - | ---------------------- | - | ------ | -------------------------- |  | - | ------------ | - |  | ------------ | ------
|NET SALES                             |  | $               |       |   |                        | $ | 59,248 |                            |  | $ | 29,350       |   |  | $            | (2,282
|COST OF GOODS SOLD                    |  |                 |       |   |                        |   | 44,395 |                            |  |   | 23,855       |   |  |              | (2,282
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|GROSS PROFIT                          |  |                 |       |   |                        |   | 14,853 |                            |  |   | 5,495        |   |  |              |      
|                                      |  |                 |        |   |                       
|OPERATING EXPENSES:                   |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|Distribution                          |  |                 |       |   |                        |   | 4,457  |                            |  |   | 1,470        |   |  |              |      
|Selling, general and administrative   |  |                 |       |   |                        |   | 7,289  |                            |  |   | 410          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|INCOME (LOSS) FROM OPERATIONS         |  |                 |       |   |                        |   | 3,107  |                            |  |   | 3,615        |   |  |              |      
|                                      |  |                 |        |   |                       
|Interest, net                         |  |                 | 1,140  |   |                        |   | 2,786  |                            |  |   | 2,207        |   |  |              |      
|Income from unconsolidated affiliates |  |                 |       |   |                        |   |       |                            |  |   | (261         | ) |  |              |      
|Other, net                            |  |                 |       |   |                        |   | (18    | )                          |  |   | 500          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|INCOME (LOSS) BEFORE INCOME TAXES     |  |                 | (1,140 | ) |                        |   | 339    |                            |  |   | 1,169        |   |  |              |      
|                                      |  |                 |        |   |                       
|PROVISION (BENEFIT) FOR INCOME TAXES: |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|Current                               |  |                 |       |   |                        |   | (252   | )                          |  |   | 267          |   |  |              |      
|Deferred                              |  |                 |       |   |                        |   | 125    |                            |  |   |             |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|                                      |  |                 |       |   |                        |   | (127   | )                          |  |   | 267          |   |  |              |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       
|NET INCOME (LOSS)                     |  | $               | (1,140 | ) |                        | $ | 466    |                            |  | $ | 902          |   |  | $            |      
|                                      |  |                 |        |   |                        |   |        |                            |  |   |              |   |  |              |       



15



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the nine months ended September
27, 2002

(In thousands)



|                                                              |  | Holding Company |        |   | Guarantor Subsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|------------------------------------------------------------- |  | --------------- | ------ | - | ---------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | ------
|NET SALES                                                     |  | $               |       |   |                        | $ | 172,138 |                           |  | $ | 77,476       |   |  | $            | (7,257
|COST OF GOODS SOLD                                            |  |                 |       |   |                        |   | 128,287 |                           |  |   | 61,616       |   |  |              | (7,257
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|GROSS PROFIT                                                  |  |                 |       |   |                        |   | 43,851  |                           |  |   | 15,860       |   |  |              |      
|                                                              |  |                 |        |   |                       
|OPERATING EXPENSES:                                           |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|Distribution                                                  |  |                 |       |   |                        |   | 12,792  |                           |  |   | 4,075        |   |  |              |      
|Selling, general and administrative                           |  |                 | (96    | ) |                        |   | 20,048  |                           |  |   | 3,246        |   |  |              |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|INCOME FROM OPERATIONS                                        |  |                 | 96     |   |                        |   | 11,011  |                           |  |   | 8,539        |   |  |              |      
|                                                              |  |                 |        |   |                       
|Interest, net                                                 |  |                 | 3,580  |   |                        |   | 9,673   |                           |  |   | 2,976        |   |  |              |      
|Income from unconsolidated affiliates                         |  |                 |       |   |                        |   |        |                           |  |   | (911         | ) |  |              |      
|Other, net                                                    |  |                 |       |   |                        |   | (306    | )                         |  |   | 1,291        |   |  |              |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS |  |                 | (3,484 | ) |                        |   | 1,644   |                           |  |   | 5,183        |   |  |              |      
|                                                              |  |                 |        |   |                       
|PROVISION (BENEFIT) FOR INCOME TAXES:                         |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|Current                                                       |  |                 | 5      |   |                        |   | (137    | )                         |  |   | 267          |   |  |              |      
|Deferred                                                      |  |                 | 31     |   |                        |   | 1,104   |                           |  |   |             |   |  |              |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|                                                              |  |                 | 36     |   |                        |   | 967     |                           |  |   | 267          |   |  |              |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|INCOME (LOSS) FROM CONTINUING OPERATIONS                      |  |                 | (3,520 | ) |                        |   | 677     |                           |  |   | 4,916        |   |  |              |      
|                                                              |  |                 |        |   |                       
|LOSS FROM DISCONTINUED OPERATIONS, net of tax                 |  |                 | 48     |   |                        |   |        |                           |  |   |             |   |  |              |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       
|NET INCOME (LOSS)                                             |  | $               | (3,568 | ) |                        | $ | 677     |                           |  | $ | 4,916        |   |  | $            |      
|                                                              |  |                 |        |   |                        |   |         |                           |  |   |              |   |  |              |       



RADNOR HOLDINGS
CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the nine months ended September 27, 2002

(In thousands)



|                                                                            |  | HoldingCompany |      |   | Guarantor Subsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |     
|--------------------------------------------------------------------------- |  | -------------- | ---- | - | ---------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ------------ | ----
|Net cash provided by (used in) operating activities:                        |  | $              | 164  |   |                        | $ | 2,788  |                           |  | $ | (3,494       | ) |  | $            | 150 
|Cash flows from investing activities:                                       |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Capital expenditures                                                        |  |                |     |   |                        |   | (6,684 | )                         |  |   | (387         | ) |  |              |    
|Change in other assets                                                      |  |                | 742  |   |                        |   | 60     |                           |  |   | (3,294       | ) |  |              |    
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Net cash provided by (used in) investing activities                         |  |                | 742  |   |                        |   | (6,624 | )                         |  |   | (3,681       | ) |  |              |    
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Cash flows from financing activities:                                       |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Net borrowings (payments) on bank financed debt and unsecured notes payable |  |                | (404 | ) |                        |   | 4,418  |                           |  |   | 3,177        |   |  |              |    
|Net payments on capitalized lease obligations                               |  |                |     |   |                        |   | (750   | )                         |  |   |             |   |  |              |    
|Change in intercompany, net                                                 |  |                | (502 | ) |                        |   | (2,528 | )                         |  |   | 3,180        |   |  |              | (150
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Net cash provided by (used in) financing activities                         |  |                | (906 | ) |                        |   | 1,140  |                           |  |   | 6,357        |   |  |              | (150
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Effect of exchange rate changes on cash                                     |  |                |     |   |                        |   | (29    | )                         |  |   | 160          |   |  |              |    
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Net decrease in cash                                                        |  |                |     |   |                        |   | (2,725 | )                         |  |   | (658         | ) |  |              |    
|Cash, beginning of period                                                   |  |                |     |   |                        |   | 3,020  |                           |  |   | 1,284        |   |  |              |    
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     
|Cash, end of period                                                         |  | $              |     |   |                        | $ | 295    |                           |  | $ | 626          |   |  | $            |    
|                                                                            |  |                |      |   |                        |   |        |                           |  |   |              |   |  |              |     



16



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|Item 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



General



Radnor Holdings Corporation, through acquisition and internal development, has established itself as a leading manufacturer and distributor of foam
packaging and specialty chemical products for the foodservice, insulation and protective packaging industries.



The packaging business segment manufactures and distributes foam cup and container products for the foodservice industry, through its WinCup Holdings,
Inc. (WinCup) subsidiary. WinCup is the second largest producer in the United States of foam cups and containers for the foodservice industry. The specialty chemicals business segment primarily manufactures and distributes expandable
polystyrene (EPS) bead for internal consumption and distribution to the insulation and packaging industries. Through its Radnor Chemical Corporation subsidiary, the Company is the fifth largest worldwide producer of EPS.



Results of Operations



CONSOLIDATED



|                       |  | Three Months Ended |      | Nine Months Ended 
|---------------------- |  | ------------------ | ---- | ------------------
|(Millions of dollars)  |  | September 26,2003  |      | September 27, 2002
|Net sales              |  | $                  | 86.9 |                   
|Gross profit           |  |                    | 16.9 |                   
|Operating expenses     |  |                    | 13.0 |                   
|Income from operations |  |                    | 3.9  |                   



Net sales for the
three months ended September 26, 2003 were $86.9 million, an increase of $0.6 million from $86.3 million for the three months ended September 27, 2002. This increase was primarily due to higher sales at the specialty chemicals operations resulting
from increased selling prices and sales volumes.



Gross profit
for the three months ended September 26, 2003 decreased by $3.4 million to $16.9 million from $20.3 million for the comparable period in 2002. This decrease was primarily caused by lower gross profit at the packaging operations ($1.9 million) and
the specialty chemicals operations ($1.1 million) resulting from higher raw material and natural gas costs, partially offset by higher selling prices and sales volumes.



Operating expenses for the three months ended September 26, 2003 decreased by $0.6 million to $13.0 million from $13.6
million for the comparable period in 2002. This decrease was primarily due to lower employee-related costs and amortization at the Companys corporate offices ($1.3 million), partially offset by higher distribution costs and selling expenses at
the specialty chemicals operations ($0.8 million).



During the
three months ended September 26, 2003, the Company implemented cost containment and reduction initiatives. These initiatives included, among other things, a reduction in force and other employee costs, the closure of one of our specialty chemicals
technology and development centers, and changes in product packaging and configuration. We expect that savings related to these initiatives will total approximately $5 million annually. Severance costs related to the reduction in force totaled $0.2
million for the three months ended September 26, 2003.



Net
sales for the nine months ended September 26, 2003 were $250.4 million, an $8.0 million increase from the nine months ended September 27, 2002. This increase was primarily due to higher sales at the specialty chemicals segment ($13.2 million)
primarily resulting from higher selling prices, partially offset by lower sales at the packaging segment ($4.2 million) during the first half of the 2003.





17



---

Gross profit for the nine months ended September 26, 2003 was $45.5 million, a $14.2 million decrease
from $59.7 million for the comparable period in 2002. This decrease was primarily caused by lower gross profit at the packaging operations ($11.6 million) and the specialty chemicals operations ($1.1 million) resulting from higher raw material and
natural gas costs combined with lower sales volumes, partially offset by higher selling prices.



Operating expenses for the nine months ended September 26, 2003 increased by $0.5 million to $40.6 million from $40.1 million for the nine months ended
September 27, 2002. Excluding the other expenses of $1.8 million related to the extinguishment of long-term debt, as described in note 5 to the condensed consolidated financial statements included elsewhere herein, operating expenses decreased by
$1.3 million from the nine months ended September 27, 2002. This decrease was primarily due to lower general and administrative expenses and amortization at the Corporate offices ($2.4 million), lower distribution costs at the packaging operations
($0.6 million), partially offset by higher distribution and selling costs at the specialty chemicals operations ($1.3 million).



SEGMENT ANALYSIS



Packaging



|                       |  | Three Months Ended |      | Nine Months Ended 
|---------------------- |  | ------------------ | ---- | ------------------
|(Millions of dollars)  |  | September 26, 2003 |      | September 27, 2002
|Net sales              |  | $                  | 48.8 |                   
|Gross profit           |  |                    | 11.6 |                   
|Operating expenses     |  |                    | 6.9  |                   
|Income from operations |  |                    | 4.7  |                   



Net sales for the
three months ended September 26, 2003 decreased by $0.3 million to $48.8 million from $49.1 million for the three months ended September 27, 2002 primarily due to higher discounts and allowances.



Gross profit decreased by $1.9 million to $11.6 million for the three months
ended September 26, 2003 from $13.5 million for the comparable period in 2002. This decrease in gross profit was primarily due to increased natural gas costs ($1.5 million) and higher discounts and allowances, as described above.



Operating expenses of $6.9 million for the three months ended September 26,
2003 were consistent with the comparable period in the prior year. For the reasons described above, income from operations decreased by $1.9 million to $4.7 million for the three months ended September 26, 2003.



During the nine months ended September 26, 2003, net sales decreased by $4.2
million to $141.6 million from $145.8 million for the nine months ended September 27, 2002. This was primarily due to a reduction in sales volumes during the first half of 2003 ($4.2 million) caused in large part by the hostilities in the Middle
East and its overall impact on the economy.



Gross profit
decreased by $11.6 million to $31.3 million for the nine months ended September 26, 2003 from $42.9 million for the comparable period in 2002. This decrease in gross profit was primarily due to increased natural gas ($5.6 million) and raw material
($4.2 million) costs, combined with the impact of lower sales volumes during the first half of 2003 ($1.8 million).





18



---

Operating expenses decreased by $0.5 million for the nine months ended September 26, 2003 to $19.7
million from $20.2 million for the comparable period in 2002. The decrease was primarily due to lower distribution costs at the domestic packaging operations. For the reasons described above, income from operations decreased by $11.1 million to
$11.6 million for the nine months ended September 26, 2003.



Specialty
Chemicals



|                       |  | Three Months Ended |      | Nine Months Ended 
|---------------------- |  | ------------------ | ---- | ------------------
|(Millions of dollars)  |  | September 26, 2003 |      | September 27, 2002
|Net sales              |  | $                  | 40.4 |                   
|Gross profit           |  |                    | 5.3  |                   
|Operating expenses     |  |                    | 4.7  |                   
|Income from operations |  |                    | 0.6  |                   



Net sales for the
three months ended September 26, 2003 were $40.4 million, an increase of $1.3 million from $39.1 million for the comparable period in the prior year. This increase was primarily due to higher sales volumes ($1.0 million) and higher selling prices
($0.3 million). Net sales for the three months ended September 26, 2003 and September 27, 2002 included sales to the packaging segment of $2.3 million for each period.



Gross profit decreased by $1.1 million to $5.3 million for the three months ended September 26, 2003 from $6.4 million for
the comparable period in the prior year. This decrease was primarily caused by increased styrene monomer costs, our primary raw material ($2.4 million), and higher energy-related costs ($0.2 million), partially offset by the impact of higher selling
prices ($0.3 million) and higher sales volumes ($0.6 million).



For the three months ended September 26, 2003, operating expenses increased by $1.0 million from the comparable period in the prior year. The increase in operating expenses was primarily due to higher distribution costs ($0.4 million), as
result of the higher sales volumes described above, along with higher selling expenses ($0.4 million). For the reasons described above, income from operations decreased by $2.1 million to $0.6 million for the three months ended September 26, 2003.



Net sales for the nine months ended September 26, 2003 were
$115.6 million, an increase of $13.2 million from $102.4 million for the comparable period in the prior year. This increase was primarily due to an increase in selling prices ($17.4 million) resulting indirectly from increased styrene monomer prices
as compared to the same period in the prior year, partially offset by lower sales volumes ($4.2 million). Net sales for the nine months ended September 26, 2003 and September 27, 2002 included sales to the packaging segment of $6.7 million and $7.3
million, respectively.



Gross profit of $14.3 million for the
nine months ended September 26, 2003 decreased by $1.1 million from $15.4 million for the comparable period in the prior year. This decrease was primarily due to higher raw material costs ($15.8 million), higher energy-related costs ($1.0 million),
higher depreciation ($0.8 million) and lower sales volumes ($0.9 million), partially offset by higher selling prices ($17.4 million).



For the nine months ended September 26, 2003, operating expenses increased by $1.7 million to $12.9 million from $11.2 million for the comparable period
in the prior year, due primarily to an increase in distribution costs ($0.8 million) and selling expenses ($0.5 million). For the reasons described above, income from operations decreased by $2.8 million to $1.4 million for the nine months ended
September 26, 2003.





19



---

Corporate & Other



Corporate operating expenses decreased by $1.5 million to $1.5 million for the three months ended September 26, 2003, primarily due to lower
employee-related costs ($0.8 million) and lower amortization ($0.5 million).



Corporate operating expenses decreased by $0.6 million to $8.2 million for the nine months ended September 26, 2003. Excluding the other expenses of $1.8 million related to the extinguishment of long-term debt as
described in note 5 to the condensed consolidated financial statements included elsewhere herein, operating expenses decreased by $2.4 million. This was primarily due to lower amortization ($1.4 million) and lower employee-related costs ($0.5
million).



Other expenses for the three months ended September
26, 2003 decreased by $0.5 from the similar period in the prior year primarily due to decreased currency transaction losses.



Other expenses of $0.4 million for the nine months ended September 26, 2003 decreased by $0.6 million from $1.0 million for the similar period in the
prior year primarily due to decreased currency transaction losses.



Income from unconsolidated affiliates increased by $0.5 million to $0.8 million for the three months ended September 26, 2003 due to increased earnings at the investment partnership in which the Company serves as a limited partner. These
earnings represent unrealized gains on investments held by the investment partnership for which there is no established market.



Income from unconsolidated affiliates increased by $1.4 million to $2.3 million for the nine months ended September 26, 2003 due to increased earnings at
the investment partnership in which the Company serves as a limited partner. These earnings represent unrealized gains on investments held by the investment partnership for which there is no established market.



Interest Expense



|                      |  | Three Months Ended |     | Nine Months Ended 
|--------------------- |  | ------------------ | --- | ------------------
|(Millions of dollars) |  | September 26, 2003 |     | September 27, 2002
|Interest expense      |  | $                  | 5.1 |                   



Interest expense for
the three months ended September 26, 2003 of $5.1 million decreased by $1.0 million from $6.1 million as compared to the similar period in the prior year. This decease was primarily due to lower interest rates, partially offset by higher average
debt levels.



Interest expense for the nine months ended
September 26, 2003 of $15.6 million decreased by $0.6 million from $16.2 million for the nine months ended September 27, 2002. This decease was primarily due to lower interest rates, partially offset by higher average debt levels.



Income Taxes



|                             |  | Three Months Ended |      | Nine Months Ended
|---------------------------- |  | ------------------ | ---- | -----------------
|(Millions of dollars)        |  | September 26, 2003 |      |                  
|Income tax expense (benefit) |  | $                  | (0.2 | )                



20



---

The effective tax rate for the periods ended September 26, 2003 and September 27, 2002 was 38.0% of
pre-tax income. As of September 26, 2003, the Company had $81.8 million of net operating loss carryforwards for federal income tax purposes, which expire through 2023.



Liquidity and Capital Resources



During the nine months ended September 26, 2003 and September 27, 2002, the Company used $4.2 million and $0.4 million, respectively, in operating
activities. During the 2003 period, the Company had after-tax cash flow of $1.8 million, offset by a $6.0 million increase in working capital. This increase in working capital was primarily caused by higher accounts receivable at our specialty
chemicals operations ($4.4 million), higher prepaid expenses at our corporate offices and specialty chemicals operations ($3.6 million), and lower accrued expenses at our domestic packaging operations and corporate offices ($4.1 million), offset by
higher accounts payable at the specialty chemical operations. The increase in accounts receivable at our specialty chemicals operations was primarily caused by an increase in average selling prices. The higher accounts payable at our specialty
chemicals operations was primarily due to increases in the cost of our primary raw material, styrene monomer.



For the nine-month period ended September 26, 2003 inventory turnover was approximately 7.0 times per year which was consistent with the similar
nine-month period in 2002. As of September 26, 2003, the average collection period for our accounts receivable was 43 days which was slightly higher than the 41 days average collection period as of September 27, 2002.



The Company used $10.8 million and $9.6 million in investing activities for
the nine months ended September 26, 2003 and September 27, 2002, respectively. The Company made $9.3 million in capital expenditures and increased other assets by $1.6 million during the nine months ended September 27, 2003 primarily due to
increased deposits at the Companys domestic packaging operations. The Companys distributions received from unconsolidated affiliates exceeded additional investments by $0.1 million for the period.



During the nine months ended September 26, 2003 and September 27, 2002, the
Companys principal source of funds consisted of cash from financing activities. On March 11, 2003, the Company issued 11.0% Senior Notes due 2010 and amended its domestic revolving credit facility to include a $45.0 million term loan and to
increase the revolving credit commitment from $35.0 million to $45.0 million. The proceeds were used to repay $159.5 million of senior notes due 2003 and outstanding borrowings under the Companys revolving credit facilities. In connection with
this financing, the Company paid $5.2 million of financing costs.



As of September 26, 2003, the Company had $40.0 million outstanding and, including cash on hand, had $9.8 million of availability under its credit facilities. The principal uses of cash for the next several years will be working capital
requirements, capital expenditures and debt service. On October 27, 2003, the Company amended certain financial covenants in its domestic credit facility.



As a holding company, the Company is dependent upon dividends and other payments from its subsidiaries to generate the funds necessary to meet its
obligations. Subject to certain limitations, the Company is, and will continue to be, able to control its receipt of dividends and other payments from its subsidiaries. Management believes that cash generated from operations, together with available
borrowings under its revolving credit facilities, will be sufficient to meet the Companys expected operating needs, planned capital expenditures and debt service requirements. There can be no assurance, however, that sufficient funds will be
available from operations or borrowings under its credit agreements to meet the Companys cash needs.



Contractual Obligations and Commercial Commitments



The Company is obligated to make future payments under various contracts such as debt agreements, lease agreements and unconditional purchase obligations,
and has certain contingent commitments, including letters of credit. There have been no material changes to Contractual Obligations and Commercial Commitments as reflected in the Managements Discussion and Analysis in the Companys 2002
annual report



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on Form 10-K/A (amendment no. 2). Reference is made to Notes 5 and 6 to the consolidated financial statements in the
Companys 2002 annual report on Form 10-K/A (amendment no. 2) for additional information on long-term debt, leases and commitments and contingencies.



Critical Accounting Policies and Estimates



Managements Discussion and Analysis of the Financial Condition and Results of Operations of the Company is based on the consolidated financial
statements and accompanying notes that have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.



Included in the Companys
2002 annual report on Form 10-K/A (amendment no. 2) are the significant accounting policies of the Company, which are described in Note 2 to the consolidated financial statements, and the critical accounting policies and estimates, which are
described in the Managements Discussion and Analysis of Financial Condition and Results of Operations. Information concerning the Companys implementation and impact of new accounting standards issued by the Financial Accounting Standards
Board (FASB) is included in the notes to the consolidated financial statements included herein. Otherwise, there were no changes in the Companys accounting policies and estimates in the current period that had a material impact on the
Companys financial condition, change in financial condition, liquidity or results of operations.



Forward Looking Statements



All statements contained herein that are not historical facts are based on current expectations. These statements are forward looking in nature and involve a number of risks and uncertainties. Such risks and
uncertainties are described in detail in the Companys annual report on Form 10-K/A (amendment no. 2) for the year ended December 27, 2002, Commission File No. 333-19495, to which reference is hereby made.



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|Item 4. |  | CONTROLS AND PROCEDURES
|------- |  | -----------------------



|(a) | Evaluation of Disclosure Controls and Procedures
|--- | ------------------------------------------------



The Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Companys disclosure controls and procedures as of
a date within 90 days prior to the filing of this Form 10-Q (the Evaluation Date), concluded that such disclosure controls and procedures are effective to ensure that material information relating to the Company, including its
consolidated subsidiaries, is being made known to them, particularly during the period for which the periodic reports are being prepared.



|(b) | Changes in Internal Controls
|--- | ----------------------------



No significant changes were made in the Companys internal controls or in other factors that could significantly affect these controls subsequent to
the Evaluation Date.



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PART II  OTHER INFORMATION



|Item 1. |  | LEGAL PROCEEDINGS
|------- |  | -----------------



The Company is involved in various legal actions arising in the normal course of business. After taking into consideration legal counsels evaluation
of such actions, management believes that these actions will not have a material effect on the Companys financial position, results of operations or liquidity.



|Item 6. |  | EXHIBITS AND REPORTS ON FORM 8-K
|------- |  | --------------------------------



|(a)    Exhibits
|---------------
|               
|               
|               
|               
|               
|               
|               
|               
|               
|               
|               
|               



|(b) | Reports on Form 8-K
|--- | -------------------



The Company filed a Current Report on Form 8-K under Item 9 on August 1, 2003 related to a conference call held on August 7, 2003 to discuss its results
for the second fiscal quarter ended June 27, 2003.



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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.



|      |  |                   |  | RADNOR HOLDINGS CORPORATION
|----- |  | ----------------- |  | ---------------------------
|      |  |                   |  |                            
|      |  |                   |  |                            
|      |  |                   |  |                            
|Date: |  | November 10, 2003 |  |                            



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