---



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 March 26, 2004
| | ---------------------------------------------



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



| | for the transition period from  to
| | ----------------------------------



Commission file number: 333-19495



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RADNOR HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 23-2674715                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



|                                                                                   |  |           
|---------------------------------------------------------------------------------- |  | ----------
|Three Radnor Corporate Center, Suite 300 100 Matsonford Road, Radnor, Pennsylvania |  | 19087     
|(address of principal executive offices)                                           |  | (Zip Code)



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



---



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 May 7, 2004:



|                                               |  |               
|---------------------------------------------- |  | --------------
|Class                                          |  | NumberofShares
|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)



|                                                      |  |               |         |   |                  |   |         |  
|----------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                      |  | March 26,2004 |         |   | December 26,2003 |  
|Assets                                                |  |               |         |   |                  |   |         |  
|Current assets:                                       |  |               |         |   |                  |   |         |  
|Cash                                                  |  | $             | 602     |   |                  | $ | 6,896   |  
|Accounts receivable, net                              |  |               | 48,426  |   |                  |   | 41,441  |  
|Inventories, net                                      |  |               | 57,496  |   |                  |   | 52,202  |  
|Prepaid expenses and other                            |  |               | 11,960  |   |                  |   | 11,430  |  
|Deferred tax asset                                    |  |               | 2,466   |   |                  |   | 2,466   |  
|                                                      |  |               |         |   |                  |   |         |  
|                                                      |  |               | 120,950 |   |                  |   | 114,435 |  
|                                                      |  |               |         |   |                  |   |         |  
|Property, plant and equipment, at cost                |  |               | 291,400 |   |                  |   | 290,795 |  
|Less accumulated depreciation                         |  |               | (95,881 | ) |                  |   | (92,142 | )
|                                                      |  |               |         |   |                  |   |         |  
|                                                      |  |               | 195,519 |   |                  |   | 198,653 |  
|                                                      |  |               |         |   |                  |   |         |  
|Investments                                           |  |               | 66,097  |   |                  |   | 66,606  |  
|Intangible assets                                     |  |               | 6,361   |   |                  |   | 5,790   |  
|Other assets                                          |  |               | 14,444  |   |                  |   | 10,811  |  
|                                                      |  |               |         |   |                  |   |         |  
|                                                      |  | $             | 403,371 |   |                  | $ | 396,295 |  
|                                                      |  |               |         |   |                  |   |         |  
|Liabilities and Stockholders Equity                  |  |               |         |   |                  |   |         |  
|Current liabilities:                                  |  |               |         |   |                  |   |         |  
|Accounts payable                                      |  | $             | 52,066  |   |                  | $ | 45,993  |  
|Accrued liabilities                                   |  |               | 20,932  |   |                  |   | 26,913  |  
|Current portion of long-term debt                     |  |               | 4,234   |   |                  |   | 13,626  |  
|Current portion of capitalized lease obligations      |  |               | 2,103   |   |                  |   | 2,324   |  
|                                                      |  |               |         |   |                  |   |         |  
|                                                      |  |               | 79,335  |   |                  |   | 88,856  |  
|                                                      |  |               |         |   |                  |   |         |  
|Long-term debt, net of current portion                |  |               | 257,965 |   |                  |   | 237,478 |  
|Capitalized lease obligations, net of current portion |  |               | 5,568   |   |                  |   | 6,038   |  
|Deferred tax liability                                |  |               | 2,293   |   |                  |   | 3,552   |  
|Other non-current liabilities                         |  |               | 3,542   |   |                  |   | 3,608   |  
|Minority interest in consolidated subsidiary          |  |               | 48,128  |   |                  |   | 48,934  |  
|Commitments and contingencies                         |  |               |        |   |                  |   |        |  
|Stockholders equity:                                 |  |               |         |   |                  |   |         |  
|Common stock                                          |  |               | 1       |   |                  |   | 1       |  
|Additional paid-in capital                            |  |               | 19,387  |   |                  |   | 19,387  |  
|Retained earnings (deficit)                           |  |               | (14,617 | ) |                  |   | (14,446 | )
|Cumulative translation adjustment                     |  |               | 1,769   |   |                  |   | 2,887   |  
|                                                      |  |               |         |   |                  |   |         |  
|Total stockholders equity                            |  |               | 6,540   |   |                  |   | 7,829   |  
|                                                      |  |               |         |   |                  |   |         |  
|                                                      |  | $             | 403,371 |   |                  | $ | 396,295 |  
|                                                      |  |               |         |   |                  |   |         |  



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 |       
|                                                           |  | March 26,2004              |        |   | March 28,2003 |  
|Net sales                                                  |  | $                          | 96,300 |   |               | $ | 80,253 |  
|Cost of goods sold                                         |  |                            | 77,627 |   |               |   | 63,455 |  
|                                                           |  |                            |        |   |               |   |        |  
|Gross profit                                               |  |                            | 18,673 |   |               |   | 16,798 |  
|Operating expenses:                                        |  |                            |        |   |               |   |        |  
|Distribution                                               |  |                            | 6,248  |   |               |   | 4,883  |  
|Selling, general and administrative                        |  |                            | 7,874  |   |               |   | 7,532  |  
|Other expenses (Note 4)                                    |  |                            |       |   |               |   | 1,838  |  
|                                                           |  |                            |        |   |               |   |        |  
|Income from operations                                     |  |                            | 4,551  |   |               |   | 2,545  |  
|Interest, net                                              |  |                            | 5,607  |   |               |   | 5,418  |  
|Income from unconsolidated affiliates                      |  |                            | (159   | ) |               |   | (828   | )
|Other, net                                                 |  |                            | 190    |   |               |   | 190    |  
|Minority interest in operations of consolidated subsidiary |  |                            | (806   | ) |               |   |       |  
|                                                           |  |                            |        |   |               |   |        |  
|Loss before income taxes                                   |  |                            | (281   | ) |               |   | (2,235 | )
|Provision (benefit) for income taxes:                      |  |                            |        |   |               |   |        |  
|Current                                                    |  |                            | 459    |   |               |   | 364    |  
|Deferred                                                   |  |                            | (569   | ) |               |   | (1,213 | )
|                                                           |  |                            |        |   |               |   |        |  
|                                                           |  |                            | (110   | ) |               |   | (849   | )
|                                                           |  |                            |        |   |               |   |        |  
|Net loss                                                   |  | $                          | (171   | ) |               | $ | (1,386 | )
|                                                           |  |                            |        |   |               |   |        |  



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 three months ended |        
|                                                                            |  | March 26, 2004             |         |   | March 28, 2003 |  
|Cash flows from operating activities:                                       |  |                            |         |   |                |   |          |  
|Net loss                                                                    |  | $                          | (171    | ) |                | $ | (1,386   | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                            |         |   |                |   |          |  
|Depreciation and amortization                                               |  |                            | 4,848   |   |                |   | 5,176    |  
|Deferred income taxes                                                       |  |                            | (569    | ) |                |   | (1,213   | )
|Income from unconsolidated affiliates                                       |  |                            | (159    | ) |                |   | (828     | )
|Minority interest in operations of consolidated subsidiary                  |  |                            | (806    | ) |                |   |         |  
|Changes in operating assets and liabilities:                                |  |                            |         |   |                |   |          |  
|Accounts receivable, net                                                    |  |                            | (7,564  | ) |                |   | (4,660   | )
|Inventories                                                                 |  |                            | (5,512  | ) |                |   | (8,888   | )
|Prepaid expenses and other                                                  |  |                            | (559    | ) |                |   | (700     | )
|Accounts payable                                                            |  |                            | 6,380   |   |                |   | 1,453    |  
|Accrued liabilities and other                                               |  |                            | (7,039  | ) |                |   | 1,151    |  
|                                                                            |  |                            |         |   |                |   |          |  
|Net cash used in operating activities                                       |  |                            | (11,151 | ) |                |   | (9,895   | )
|                                                                            |  |                            |         |   |                |   |          |  
|Cash flows from investing activities:                                       |  |                            |         |   |                |   |          |  
|Capital expenditures                                                        |  |                            | (2,810  | ) |                |   | (2,866   | )
|Distributions from unconsolidated affiliates                                |  |                            | 2,630   |   |                |   | 1,529    |  
|Investments in unconsolidated affiliates                                    |  |                            | (1,947  | ) |                |   | (1,473   | )
|Increase in other assets                                                    |  |                            | (3,469  | ) |                |   | (654     | )
|                                                                            |  |                            |         |   |                |   |          |  
|Net cash used in investing activities                                       |  |                            | (5,596  | ) |                |   | (3,464   | )
|                                                                            |  |                            |         |   |                |   |          |  
|Cash flows from financing activities:                                       |  |                            |         |   |                |   |          |  
|Proceeds from borrowings                                                    |  |                            | 18,462  |   |                |   | 188,236  |  
|Repayment of debt                                                           |  |                            | (7,237  | ) |                |   | (172,527 | )
|Payments on capitalized lease obligations                                   |  |                            | (691    | ) |                |   | (283     | )
|Payment of financing fees                                                   |  |                            |        |   |                |   | (4,546   | )
|                                                                            |  |                            |         |   |                |   |          |  
|Net cash provided by financing activities                                   |  |                            | 10,534  |   |                |   | 10,880   |  
|                                                                            |  |                            |         |   |                |   |          |  
|Effect of exchange rate changes on cash                                     |  |                            | (81     | ) |                |   | (450     | )
|                                                                            |  |                            |         |   |                |   |          |  
|Net decrease in cash                                                        |  |                            | (6,294  | ) |                |   | (2,929   | )
|Cash, beginning of period                                                   |  |                            | 6,896   |   |                |   | 4,059    |  
|                                                                            |  |                            |         |   |                |   |          |  
|Cash, end of period                                                         |  | $                          | 602     |   |                | $ | 1,130    |  
|                                                                            |  |                            |         |   |                |   |          |  
|Supplemental disclosure of cash flows information:                          |  |                            |         |   |                |   |          |  
|Cash paid during the period for interest                                    |  | $                          | 9,146   |   |                | $ | 939      |  
|                                                                            |  |                            |         |   |                |   |          |  
|Cash paid during the period for income taxes                                |  | $                          | 28      |   |                | $ | 430      |  
|                                                                            |  |                            |         |   |                |   |          |  



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



4



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Summary of Operating Segments

(In
thousands)

(Unaudited)



|                                        |  |                            |        |   |               |   |        |  
|--------------------------------------- |  | -------------------------- | ------ | - | ------------- | - | ------ | -
|                                        |  | For the three months ended |       
|                                        |  | March 26,2004              |        |   | March 28,2003 |  
|Net Sales to Unaffiliated Customers:    |  |                            |        |   |               |   |        |  
|Packaging                               |  | $                          | 55,898 |   |               | $ | 44,972 |  
|Specialty Chemicals                     |  |                            | 43,321 |   |               |   | 37,055 |  
|Corporate and Other                     |  |                            |       |   |               |   |       |  
|Transfers Between Operating Segments(1) |  |                            | (2,919 | ) |               |   | (1,774 | )
|                                        |  |                            |        |   |               |   |        |  
|Consolidated                            |  | $                          | 96,300 |   |               | $ | 80,253 |  
|                                        |  |                            |        |   |               |   |        |  
|Income (Loss) From Operations:          |  |                            |        |   |               |   |        |  
|Packaging                               |  | $                          | 5,323  |   |               | $ | 6,449  |  
|Specialty Chemicals                     |  |                            | 1,725  |   |               |   | 405    |  
|Corporate and Other                     |  |                            | (2,497 | ) |               |   | (4,309 | )
|                                        |  |                            |        |   |               |   |        |  
|Consolidated                            |  | $                          | 4,551  |   |               | $ | 2,545  |  
|                                        |  |                            |        |   |               |   |        |  
|Income (Loss) Before Income Taxes:      |  |                            |        |   |               |   |        |  
|Packaging                               |  | $                          | 1,786  |   |               | $ | 3,495  |  
|Specialty Chemicals                     |  |                            | 294    |   |               |   | (1,019 | )
|Corporate and Other                     |  |                            | (2,361 | ) |               |   | (4,711 | )
|                                        |  |                            |        |   |               |   |        |  
|Consolidated                            |  | $                          | (281   | ) |               | $ | (2,235 | )
|                                        |  |                            |        |   |               |   |        |  



|(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 threemonths ended |       
|                                        |  | March 26,2004             |        |   | March 28,2003 |  
|Net Sales to Unaffiliated Customers:    |  |                           |        |   |               |   |        |  
|United States                           |  | $                         | 63,727 |   |               | $ | 53,659 |  
|Canada                                  |  |                           | 9,300  |   |               |   | 9,185  |  
|Europe                                  |  |                           | 26,192 |   |               |   | 19,183 |  
|Transfers Between Geographic Regions(1) |  |                           | (2,919 | ) |               |   | (1,774 | )
|                                        |  |                           |        |   |               |   |        |  
|Consolidated                            |  | $                         | 96,300 |   |               | $ | 80,253 |  
|                                        |  |                           |        |   |               |   |        |  
|Income From Operations:                 |  |                           |        |   |               |   |        |  
|United States                           |  | $                         | 1,948  |   |               | $ | 1,509  |  
|Canada                                  |  |                           | 1,827  |   |               |   | 1,663  |  
|Europe                                  |  |                           | 776    |   |               |   | (627   | )
|                                        |  |                           |        |   |               |   |        |  
|Consolidated                            |  | $                         | 4,551  |   |               | $ | 2,545  |  
|                                        |  |                           |        |   |               |   |        |  
|Income (Loss) Before Income Taxes:      |  |                           |        |   |               |   |        |  
|United States                           |  | $                         | (1,929 | ) |               | $ | (2,396 | )
|Canada                                  |  |                           | 1,432  |   |               |   | 1,274  |  
|Europe                                  |  |                           | 216    |   |               |   | (1,113 | )
|                                        |  |                           |        |   |               |   |        |  
|Consolidated                            |  | $                         | (281   | ) |               | $ | (2,235 | )
|                                        |  |                           |        |   |               |   |        |  



|(1) | Transfers between geographic regions reflect the sale of EPS 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, we, us, our 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 accounting principles generally accepted in the United States of America 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.



|2. | INVENTORIES
|-- | -----------



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



|                |  |                |        |                   |   |       
|--------------- |  | -------------- | ------ | ----------------- | - | ------
|                |  | March 26, 2004 |        | December 26, 2003
|Raw Materials   |  | $              | 12,920 |                   | $ | 14,003
|Work in Process |  |                | 2,251  |                   |   | 1,550 
|Finished Goods  |  |                | 42,325 |                   |   | 36,649
|                |  |                |        |                   |   |       
|                |  | $              | 57,496 |                   | $ | 52,202
|                |  |                |        |                   |   |       



|3. | INTANGIBLE ASSETS
|-- | -----------------



Intangible assets consisted of (in thousands):



|                      |  |                |       |                   |   |      |            |  |             |       |              |   |       |            |   |      |   |  |   |      
|--------------------- |  | -------------- | ----- | ----------------- | - | ---- | ---------- |  | ----------- | ----- | ------------ | - | ----- | ---------- | - | ---- | - |  | - | -----
|                      |  | March 26, 2004 |       | December 26, 2003
|                      |  | GrossAmount    |       | Accum.Amort.      |   |      | Net Amount |  | GrossAmount |       | Accum.Amort. |   |       | Net Amount
|Customer Lists        |  | $              | 3,983 |                   | $ | (150 | )          |  | $           | 3,833 |              | $ | 3,228 |            | $ | (61  | ) |  | $ | 3,167
|Non-Compete Agreement |  |                | 2,671 |                   |   | (143 | )          |  |             | 2,528 |              |   | 2,671 |            |   | (48  | ) |  |   | 2,623
|                      |  |                |       |                   |   |      |            |  |             |       |              |   |       |            |   |      |   |  |   |      
|                      |  | $              | 6,654 |                   | $ | (293 | )          |  | $           | 6,361 |              | $ | 5,899 |            | $ | (109 | ) |  | $ | 5,790
|                      |  |                |       |                   |   |      |            |  |             |       |              |   |       |            |   |      |   |  |   |      



The intangible assets
are being amortized on a straight-line basis over the expected period of benefit. The aggregate amortization expense for three months ended March 26, 2004 was $0.2 million.



7



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|4. | 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.



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.



|5. | SUBSEQUENT EVENT
|-- | ----------------



On April 27, 2004, the Company issued $70.0 million of Senior Secured Floating Rate Notes due 2009. The notes bear interest at a floating rate of LIBOR
plus 6.75% per year. Interest on the notes will be reset quarterly and will be payable quarterly beginning on July 15, 2004. The notes will mature on April 15, 2009. The net proceeds were used to repay a then outstanding $40.5 million term loan and
outstanding borrowings under the existing revolving credit facilities.



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



Included in interest expense was $171,000 and $375,000 of amortization of deferred financing costs for the three months ended March 26, 2004 and March 28,
2003, respectively. Interest expense also included premium amortization of $105,000 for the three months ended March 28, 2003 related to the issuance of the Companys 10% Series B Senior Notes due 2003, which were repaid on March 11, 2003.



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



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



|                                        |  |                    |        |   |                |   |        |  
|--------------------------------------- |  | ------------------ | ------ | - | -------------- | - | ------ | -
|                                        |  | Three Months Ended |       
|                                        |  | March 26, 2004     |        |   | March 28, 2003 |  
|Net Loss                                |  | $                  | (171   | ) |                | $ | (1,386 | )
|Foreign Currency Translation Adjustment |  |                    | (1,118 | ) |                |   | 1,372  |  
|                                        |  |                    |        |   |                |   |        |  
|Comprehensive Loss                      |  | $                  | (1,289 | ) |                | $ | (14    | )
|                                        |  |                    |        |   |                |   |        |  



|8. | STOCK-BASED COMPENSATION
|-- | ------------------------



At March 26, 2004, the Company had a stock-based compensation plan as described in Note 9 to the consolidated financial statements in the Companys
Form 10-K for fiscal 2003. The Company applied Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock option plan. As of March 26, 2004, all
previously issued stock options were fully vested. Accordingly, no compensation expense has been recognized in the Companys net loss 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. In the third quarter of fiscal 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based CompensationTransition



8



---

and Disclosure and will account for all prospective option grants under the fair value method. No stock options have been issued by the Company
subsequent to its adoption of SFAS No. 148.



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



|            |  |                    |      |   |                |   |        |  
|----------- |  | ------------------ | ---- | - | -------------- | - | ------ | -
|            |  | Three Months Ended |     
|            |  | March 26, 2004     |      |   | March 28, 2003 |  
|Net Loss:   |  |                    |      |   |                |   |        |  
|As reported |  | $                  | (171 | ) |                | $ | (1,386 | )
|Pro forma   |  |                    | (171 | ) |                |   | (1,386 | )



|9. | 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 March 26, 2004 and December 26, 2003, the net assets of these foreign subsidiaries totaled $30.5 million and $29.8 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:



9



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

March 26, 2004

(In thousands)



|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|------------------------------------------------------------------- |  | --------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | ------- | -
|                                                                    |  | Holding Company |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |         
|Assets                                                              |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                 |         |   |                       
|Current assets:                                                     |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Cash                                                                |  | $               |        |   |                        | $ | 32      |                            |  | $ | 570          |   |  | $            |         |   |  | $ | 602     |  
|Accounts receivable, net                                            |  |                 |        |   |                        |   | 26,668  |                            |  |   | 30,648       |   |  |              | (8,890   | ) |  |   | 48,426  |  
|Inventories, net                                                    |  |                 |        |   |                        |   | 47,075  |                            |  |   | 10,421       |   |  |              |         |   |  |   | 57,496  |  
|Intercompany receivable                                             |  |                 |        |   |                        |   |        |                            |  |   | 25,432       |   |  |              | (25,432  | ) |  |   |        |  
|Prepaid expenses and other                                          |  |                 | 52      |   |                        |   | 10,999  |                            |  |   | 967          |   |  |              | (58      | ) |  |   | 11,960  |  
|Deferred tax asset                                                  |  |                 | (25     | ) |                        |   | 2,491   |                            |  |   |             |   |  |              |         |   |  |   | 2,466   |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                 | 27      |   |                        |   | 87,265  |                            |  |   | 68,038       |   |  |              | (34,380  | ) |  |   | 120,950 |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Property, plant and equipment, at cost                              |  |                 |        |   |                        |   | 231,938 |                            |  |   | 59,462       |   |  |              |         |   |  |   | 291,400 |  
|Less accumulated depreciation                                       |  |                 |        |   |                        |   | (74,839 | )                          |  |   | (21,042      | ) |  |              |         |   |  |   | (95,881 | )
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                 |        |   |                        |   | 157,099 |                            |  |   | 38,420       |   |  |              |         |   |  |   | 195,519 |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Intercompany receivable                                             |  |                 | 36,180  |   |                        |   | 82,392  |                            |  |   |             |   |  |              | (118,572 | ) |  |   |        |  
|Investments in subsidiaries                                         |  |                 | 106,153 |   |                        |   |        |                            |  |   |             |   |  |              | (106,153 | ) |  |   |        |  
|Investments in unconsolidated affiliates                            |  |                 |        |   |                        |   |        |                            |  |   | 66,097       |   |  |              |         |   |  |   | 66,097  |  
|Other assets                                                        |  |                 | 4,528   |   |                        |   | 15,762  |                            |  |   | 515          |   |  |              |         |   |  |   | 20,805  |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  | $               | 146,888 |   |                        | $ | 342,518 |                            |  | $ | 173,070      |   |  | $            | (259,105 | ) |  | $ | 403,371 |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Liabilities and Stockholders Equity                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                 |         |   |                       
|Current liabilities:                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Accounts payable                                                    |  | $               |        |   |                        | $ | 33,544  |                            |  | $ | 19,242       |   |  | $            | (720     | ) |  | $ | 52,066  |  
|Accrued liabilities and other                                       |  |                 | 448     |   |                        |   | 15,815  |                            |  |   | 4,845        |   |  |              | (176     | ) |  |   | 20,932  |  
|Intercompany payable                                                |  |                 |        |   |                        |   | 9,297   |                            |  |   |             |   |  |              | (9,297   | ) |  |   |        |  
|Current portion of long-term debt and capitalized lease obligations |  |                 |        |   |                        |   | 5,364   |                            |  |   | 973          |   |  |              |         |   |  |   | 6,337   |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                 | 448     |   |                        |   | 64,020  |                            |  |   | 25,060       |   |  |              | (10,193  | ) |  |   | 79,335  |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Long-term debt, net of current portion                              |  |                 | 135,000 |   |                        |   | 128,583 |                            |  |   | 10,942       |   |  |              | (16,560  | ) |  |   | 257,965 |  
|Capital lease obligations, net of current portion                   |  |                 |        |   |                        |   | 5,568   |                            |  |   |             |   |  |              |         |   |  |   | 5,568   |  
|Intercompany payable                                                |  |                 | 68,537  |   |                        |   | 36,870  |                            |  |   | 17,024       |   |  |              | (122,431 | ) |  |   |        |  
|Deferred tax liability                                              |  |                 | (8,847  | ) |                        |   | 6,529   |                            |  |   | 4,492        |   |  |              | 119      |   |  |   | 2,293   |  
|Other non-current liabilities                                       |  |                 |        |   |                        |   | 3,542   |                            |  |   |             |   |  |              |         |   |  |   | 3,542   |  
|Minority interest in consolidated subsidiary                        |  |                 |        |   |                        |   |        |                            |  |   | 48,128       |   |  |              |         |   |  |   | 48,128  |  
|Commitments and contingencies                                       |  |                 |        |   |                        |   |        |                            |  |   |             |   |  |              |         |   |  |   |        |  
|Stockholders equity:                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Common stock                                                        |  |                 | 1       |   |                        |   | 4       |                            |  |   | 22           |   |  |              | (26      | ) |  |   | 1       |  
|Additional paid-in capital                                          |  |                 | 9,164   |   |                        |   | 97,604  |                            |  |   | 22,620       |   |  |              | (110,001 | ) |  |   | 19,387  |  
|Retained earnings (deficit)                                         |  |                 | (57,415 | ) |                        |   | 3,352   |                            |  |   | 39,439       |   |  |              | 7        |   |  |   | (14,617 | )
|Cumulative translation adjustment                                   |  |                 |        |   |                        |   | (3,554  | )                          |  |   | 5,343        |   |  |              | (20      | ) |  |   | 1,769   |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|Total stockholders equity (deficit)                                |  |                 | (48,250 | ) |                        |   | 97,406  |                            |  |   | 67,424       |   |  |              | (110,040 | ) |  |   | 6,540   |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  | $               | 146,888 |   |                        | $ | 342,518 |                            |  | $ | 173,070      |   |  | $            | (259,105 | ) |  | $ | 403,371 |  
|                                                                    |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |              |          |   |  |   |         |  





10



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

For the three months ended March 26, 2004

(In thousands)



|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|---------------------------------------------------------- |  | -------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ------ | -
|                                                           |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|Net sales                                                  |  | $              |       |   |                       | $ | 63,727 |                           |  | $ | 35,492       |   |  | $            | (2,919 | ) |  | $ | 96,300 |  
|Cost of goods sold                                         |  |                |       |   |                       |   | 51,477 |                           |  |   | 29,069       |   |  |              | (2,919 | ) |  |   | 77,627 |  
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Gross profit                                               |  |                |       |   |                       |   | 12,250 |                           |  |   | 6,423        |   |  |              |       |   |  |   | 18,673 |  
|Operating expenses:                                        |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Distribution                                               |  |                |       |   |                       |   | 4,298  |                           |  |   | 1,950        |   |  |              |       |   |  |   | 6,248  |  
|Selling, general and administrative                        |  |                | 2      |   |                       |   | 5,942  |                           |  |   | 1,930        |   |  |              |       |   |  |   | 7,874  |  
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Income (loss) from operations                              |  |                | (2     | ) |                       |   | 2,010  |                           |  |   | 2,543        |   |  |              |       |   |  |   | 4,551  |  
|Interest, net                                              |  |                | 1,325  |   |                       |   | 3,691  |                           |  |   | 591          |   |  |              |       |   |  |   | 5,607  |  
|Income from unconsolidated affiliates                      |  |                |       |   |                       |   |       |                           |  |   | (159         | ) |  |              |       |   |  |   | (159   | )
|Other, net                                                 |  |                |       |   |                       |   | (156   | )                         |  |   | 346          |   |  |              |       |   |  |   | 190    |  
|Minority interest in operations of consolidated subsidiary |  |                |       |   |                       |   |       |                           |  |   | (806         | ) |  |              |       |   |  |   | (806   | )
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Income (loss) before income taxes                          |  |                | (1,327 | ) |                       |   | (1,525 | )                         |  |   | 2,571        |   |  |              |       |   |  |   | (281   | )
|Provision (benefit) for income taxes:                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Current                                                    |  |                |       |   |                       |   | 6      |                           |  |   | 453          |   |  |              |       |   |  |   | 459    |  
|Deferred                                                   |  |                | (282   | ) |                       |   | (104   | )                         |  |   | (183         | ) |  |              |       |   |  |   | (569   | )
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|                                                           |  |                | (282   | ) |                       |   | (98    | )                         |  |   | 270          |   |  |              |       |   |  |   | (110   | )
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Net income (loss)                                          |  | $              | (1,045 | ) |                       | $ | (1,427 | )                         |  | $ | 2,301        |   |  | $            |       |   |  | $ | (171   | )
|                                                           |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  



RADNOR HOLDINGS
CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

For the three months ended March 26, 2004

(In thousands)



|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|---------------------------------------------------------------- |  | -------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ------- | -
|                                                                 |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|Net cash provided by (used in) operating activities:             |  | $              | (5,047 | ) |                       | $ | (5,421 | )                         |  | $ | (2,101       | ) |  | $            | 1,418  |   |  | $ | (11,151 | )
|Cash flows from investing activities:                            |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Capital expenditures                                             |  |                |       |   |                       |   | (2,187 | )                         |  |   | (623         | ) |  |              |       |   |  |   | (2,810  | )
|Change in other assets                                           |  |                | 251    |   |                       |   | (3,888 | )                         |  |   | 851          |   |  |              |       |   |  |   | (2,786  | )
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Net cash provided by (used in) investing activities              |  |                | 251    |   |                       |   | (6,075 | )                         |  |   | 228          |   |  |              |       |   |  |   | (5,596  | )
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Cash flows from financing activities:                            |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Net borrowings on bank financed debt and unsecured notes payable |  |                |       |   |                       |   | 7,268  |                           |  |   | 3,957        |   |  |              |       |   |  |   | 11,225  |  
|Net payments on capitalized lease obligations                    |  |                |       |   |                       |   | (691   | )                         |  |   |             |   |  |              |       |   |  |   | (691    | )
|Payment of financing costs                                       |  |                | 350    |   |                       |   | (350   | )                         |  |   |             |   |  |              |       |   |  |   |        |  
|Change in intercompany, net                                      |  |                | 4,446  |   |                       |   | 2,470  |                           |  |   | (5,498       | ) |  |              | (1,418 | ) |  |   |        |  
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Net cash provided by (used in) financing activities              |  |                | 4,796  |   |                       |   | 8,697  |                           |  |   | (1,541       | ) |  |              | (1,418 | ) |  |   | 10,534  |  
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Effect of exchange rate changes on cash                          |  |                |       |   |                       |   | (32    | )                         |  |   | (49          | ) |  |              |       |   |  |   | (81     | )
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Net decrease in cash                                             |  |                |       |   |                       |   | (2,831 | )                         |  |   | (3,463       | ) |  |              |       |   |  |   | (6,294  | )
|Cash, beginning of period                                        |  |                |       |   |                       |   | 2,863  |                           |  |   | 4,033        |   |  |              |       |   |  |   | 6,896   |  
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  
|Cash, end of period                                              |  | $              |       |   |                       | $ | 32     |                           |  | $ | 570          |   |  | $            |       |   |  | $ | 602     |  
|                                                                 |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |         |  











11



---

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

December 26, 2003

(In thousands)



|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|------------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | ------- | -
|                                                                    |  | HoldingCompany |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |         
|Assets                                                              |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                |         |   |                      
|Current assets:                                                     |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Cash                                                                |  | $              |        |   |                       | $ | 2,863   |                           |  | $ | 4,033        |   |  | $            |         |   |  | $ | 6,896   |  
|Accounts receivable, net                                            |  |                |        |   |                       |   | 24,634  |                           |  |   | 23,905       |   |  |              | (7,098   | ) |  |   | 41,441  |  
|Inventories, net                                                    |  |                |        |   |                       |   | 41,131  |                           |  |   | 11,071       |   |  |              |         |   |  |   | 52,202  |  
|Intercompany receivable                                             |  |                |        |   |                       |   | 270     |                           |  |   | 21,409       |   |  |              | (21,679  | ) |  |   |        |  
|Prepaid expenses and other                                          |  |                | 49      |   |                       |   | 10,149  |                           |  |   | 1,290        |   |  |              | (58      | ) |  |   | 11,430  |  
|Deferred tax asset                                                  |  |                | (25     | ) |                       |   | 2,491   |                           |  |   |             |   |  |              |         |   |  |   | 2,466   |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                | 24      |   |                       |   | 81,538  |                           |  |   | 61,708       |   |  |              | (28,835  | ) |  |   | 114,435 |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Property, plant and equipment, at cost                              |  |                |        |   |                       |   | 230,506 |                           |  |   | 60,289       |   |  |              |         |   |  |   | 290,795 |  
|Less accumulated depreciation                                       |  |                |        |   |                       |   | (71,509 | )                         |  |   | (20,633      | ) |  |              |         |   |  |   | (92,142 | )
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                |        |   |                       |   | 158,997 |                           |  |   | 39,656       |   |  |              |         |   |  |   | 198,653 |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Intercompany receivable                                             |  |                | 38,051  |   |                       |   | 22,934  |                           |  |   |             |   |  |              | (60,985  | ) |  |   |        |  
|Investments in subsidiaries                                         |  |                | 106,153 |   |                       |   | 25,078  |                           |  |   |             |   |  |              | (131,231 | ) |  |   |        |  
|Investments in unconsolidated affiliates                            |  |                |        |   |                       |   |        |                           |  |   | 66,606       |   |  |              |         |   |  |   | 66,606  |  
|Other assets                                                        |  |                | 4,669   |   |                       |   | 11,380  |                           |  |   | 552          |   |  |              |         |   |  |   | 16,601  |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  | $              | 148,897 |   |                       | $ | 299,927 |                           |  | $ | 168,522      |   |  | $            | (221,051 | ) |  | $ | 396,295 |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                |         |   |                      
|Liabilities and Stockholders Equity                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                |         |   |                      
|Current liabilities:                                                |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Accounts payable                                                    |  | $              |        |   |                       | $ | 28,664  |                           |  | $ | 17,675       |   |  | $            | (346     | ) |  | $ | 45,993  |  
|Accrued liabilities and other                                       |  |                | 4,054   |   |                       |   | 18,965  |                           |  |   | 4,070        |   |  |              | (176     | ) |  |   | 26,913  |  
|Intercompany payable                                                |  |                |        |   |                       |   | 9,036   |                           |  |   | 63           |   |  |              | (9,099   | ) |  |   |        |  
|Current portion of long-term debt and capitalized lease obligations |  |                |        |   |                       |   | 14,933  |                           |  |   | 1,017        |   |  |              |         |   |  |   | 15,950  |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  |                | 4,054   |   |                       |   | 71,598  |                           |  |   | 22,825       |   |  |              | (9,621   | ) |  |   | 88,856  |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Long-term debt, net of current portion                              |  |                | 135,000 |   |                       |   | 111,841 |                           |  |   | 7,197        |   |  |              | (16,560  | ) |  |   | 237,478 |  
|Capital lease obligations, net of current portion                   |  |                |        |   |                       |   | 6,038   |                           |  |   |             |   |  |              |         |   |  |   | 6,038   |  
|Intercompany payable                                                |  |                | 65,962  |   |                       |   | 119     |                           |  |   | 18,868       |   |  |              | (84,949  | ) |  |   |        |  
|Deferred tax liability                                              |  |                | (8,564  | ) |                       |   | 7,113   |                           |  |   | 4,884        |   |  |              | 119      |   |  |   | 3,552   |  
|Other non-current liabilities                                       |  |                |        |   |                       |   | 3,571   |                           |  |   | 37           |   |  |              |         |   |  |   | 3,608   |  
|Minority interest in consolidated subsidiary                        |  |                |        |   |                       |   |        |                           |  |   | 48,934       |   |  |              |         |   |  |   | 48,934  |  
|                                                                    |  |                |         |   |                      
|Commitments and contingencies                                       |  |                |        |   |                       |   |        |                           |  |   |             |   |  |              |         |   |  |   |        |  
|Stockholders equity:                                               |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Common stock                                                        |  |                | 1       |   |                       |   | 4       |                           |  |   | 22           |   |  |              | (26      | ) |  |   | 1       |  
|Additional paid-in capital                                          |  |                | 9,164   |   |                       |   | 97,604  |                           |  |   | 22,620       |   |  |              | (110,001 | ) |  |   | 19,387  |  
|Retained earnings (deficit)                                         |  |                | (56,720 | ) |                       |   | 5,129   |                           |  |   | 37,138       |   |  |              | 7        |   |  |   | (14,446 | )
|Cumulative translation adjustment                                   |  |                |        |   |                       |   | (3,090  | )                         |  |   | 5,997        |   |  |              | (20      | ) |  |   | 2,887   |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|Total stockholders equity (deficit)                                |  |                | (47,555 | ) |                       |   | 99,647  |                           |  |   | 65,777       |   |  |              | (110,040 | ) |  |   | 7,829   |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  
|                                                                    |  | $              | 148,897 |   |                       | $ | 299,927 |                           |  | $ | 168,522      |   |  | $            | (221,051 | ) |  | $ | 396,295 |  
|                                                                    |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |          |   |  |   |         |  



12



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RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

For the three months ended March 28, 2003

(In thousands)



|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|------------------------------------- |  | -------------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ------ | -
|                                      |  | HoldingCompany |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |       
|Net sales                             |  | $              |       |   |                       | $ | 54,363 |                           |  | $ | 28,368       |   |  | $            | (2,478 | ) |  | $ | 80,253 |  
|Cost of goods sold                    |  |                |       |   |                       |   | 42,252 |                           |  |   | 23,981       |   |  |              | (2,778 | ) |  |   | 63,455 |  
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Gross profit                          |  |                |       |   |                       |   | 12,111 |                           |  |   | 4,387        |   |  |              | 300    |   |  |   | 16,798 |  
|Operating expenses:                   |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Distribution                          |  |                |       |   |                       |   | 3,283  |                           |  |   | 1,600        |   |  |              |       |   |  |   | 4,883  |  
|Selling, general and administrative   |  |                | 4      |   |                       |   | 5,790  |                           |  |   | 1,738        |   |  |              |       |   |  |   | 7,532  |  
|Other expenses (Note 4)               |  |                | 1,013  |   |                       |   | 825    |                           |  |   |             |   |  |              |       |   |  |   | 1,838  |  
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Income (loss) from operations         |  |                | (1,017 | ) |                       |   | 2,213  |                           |  |   | 1,049        |   |  |              | 300    |   |  |   | 2,545  |  
|Interest, net                         |  |                | 1,649  |   |                       |   | 3,280  |                           |  |   | 489          |   |  |              |       |   |  |   | 5,418  |  
|Income from unconsolidated affiliates |  |                |       |   |                       |   |       |                           |  |   | (828         | ) |  |              |       |   |  |   | (828   | )
|Other, net                            |  |                |       |   |                       |   | (196   | )                         |  |   | 386          |   |  |              |       |   |  |   | 190    |  
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Income (loss) before income taxes     |  |                | (2,666 | ) |                       |   | (871   | )                         |  |   | 1,002        |   |  |              | 300    |   |  |   | (2,235 | )
|Provision (benefit) for income taxes: |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Current                               |  |                |       |   |                       |   | (18    | )                         |  |   | 382          |   |  |              |       |   |  |   | 364    |  
|Deferred                              |  |                | (944   | ) |                       |   | (322   | )                         |  |   | 53           |   |  |              |       |   |  |   | (1,213 | )
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|                                      |  |                | (944   | ) |                       |   | (340   | )                         |  |   | 435          |   |  |              |       |   |  |   | (849   | )
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  
|Net income (loss)                     |  | $              | (1,722 | ) |                       | $ | (531   | )                         |  | $ | 567          |   |  | $            | 300    |   |  | $ | (1,386 | )
|                                      |  |                |        |   |                       |   |        |                           |  |   |              |   |  |              |        |   |  |   |        |  



RADNOR HOLDINGS
CORPORATION AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

For the three months ended March 28, 2003

(In thousands)



|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|--------------------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ------------ | --- | - |  | - | ------ | -
|                                                                            |  | HoldingCompany |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Consolidated |    
|Net cash provided by (used in) operating activities:                        |  | $              | (2,328  | ) |                       | $ | (7,017  | )                         |  | $ | (672         | ) |  | $            | 122 |   |  | $ | (9,895 | )
|Cash flows from investing activities:                                       |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Capital expenditures                                                        |  |                |        |   |                       |   | (2,500  | )                         |  |   | (366         | ) |  |              |    |   |  |   | (2,866 | )
|Change in other assets                                                      |  |                | 288     |   |                       |   | (945    | )                         |  |   | 59           |   |  |              |    |   |  |   | (598   | )
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Net cash provided by (used in) investing activities                         |  |                | 288     |   |                       |   | (3,445  | )                         |  |   | (307         | ) |  |              |    |   |  |   | (3,464 | )
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Cash flows from financing activities:                                       |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Net borrowings (payments) on bank financed debt and unsecured notes payable |  |                | (24,500 | ) |                       |   | 34,290  |                           |  |   | 5,919        |   |  |              |    |   |  |   | 15,709 |  
|Net payments on capitalized lease obligations                               |  |                |        |   |                       |   | (283    | )                         |  |   |             |   |  |              |    |   |  |   | (283   | )
|Payment of financing costs                                                  |  |                | (3,173  | ) |                       |   | (1,373  | )                         |  |   |             |   |  |              |    |   |  |   | (4,546 | )
|Change in intercompany, net                                                 |  |                | 29,713  |   |                       |   | (21,910 | )                         |  |   | (7,741       | ) |  |              | (62 | ) |  |   |       |  
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Net cash provided by (used in) financing activities                         |  |                | 2,040   |   |                       |   | 10,724  |                           |  |   | (1,822       | ) |  |              | (62 | ) |  |   | 10,880 |  
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Effect of exchange rate changes on cash                                     |  |                |        |   |                       |   | (384    | )                         |  |   | (6           | ) |  |              | (60 | ) |  |   | (450   | )
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Net decrease in cash                                                        |  |                |        |   |                       |   | (122    | )                         |  |   | (2,807       | ) |  |              |    |   |  |   | (2,929 | )
|Cash, beginning of period                                                   |  |                |        |   |                       |   | 392     |                           |  |   | 3,667        |   |  |              |    |   |  |   | 4,059  |  
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  
|Cash, end of period                                                         |  | $              |        |   |                       | $ | 270     |                           |  | $ | 860          |   |  |              |    |   |  | $ | 1,130  |  
|                                                                            |  |                |         |   |                       |   |         |                           |  |   |              |   |  |              |     |   |  |   |        |  



13



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



General



Radnor Holdings Corporation is a leading manufacturer and distributor of a broad line of disposable foodservice products in the United States and
specialty chemical products worldwide. We operate 15 plants in North America and 3 in Europe and distribute our foodservice products from 10 distribution centers throughout the United States. On November 14, 2003 we acquired the operations of Polar
Plastics, Inc. and its subsidiary (Polar Plastics or the Acquisition). The Acquisition extended our product line to include thermoform and injection molded foodservice products. We are also upgrading our thermoforming
equipment and installing new production lines to facilitate the introduction of our proprietary cold drink cups. This expansion is necessary to meet accelerating customer demand, including business awards from quick service restaurant customers for
delivery in 2004.



We have been manufacturing expandable
polystyrene, or EPS, and related products sold to the foodservice, insulation and protective packaging industries for more than 25 years. In the foodservice industry, we are the second largest manufacturer of foam cup and container products in the
U.S. By capacity, we are also the fifth largest worldwide producer of EPS. In fiscal 2003, we produced 13 billion foam cups for hot and cold drinks, foam bowls and containers and thermoformed lids and 354 million pounds of EPS. We supply 100% of our
own EPS needs in addition to supplying EPS to other manufacturers of foodservice, insulation and protective packaging products.



Net Sales



Net sales represent the sales of the Companys products less (i) cash discounts and allowances, which historically have averaged approximately 2% of
gross sales, and (ii) sales and marketing rebates.



Cost of
Goods Sold



Raw material costs represent a large portion
of the Companys cost of goods sold and are susceptible to price fluctuations based upon supply and demand as well as general market conditions. Beginning in January 2003 through April 2004, market prices of styrene monomer, the primary raw
material in the Companys foam products, increased by 33%. Although future raw material prices cannot be predicted with accuracy, prices for styrene monomer are forecasted by independent industry surveys and producer reports to decline by
approximately 20% over the remainder of 2004. While the Company has been able to pass on the majority of past raw material price increases to customers, the Company may not be able to increase prices if raw material costs rise in the future.



Our plastic cups and cutlery are thermoformed and injection
molded from polypropylene and polystyrene resins. The prices of polystyrene resins generally fluctuate in a fashion similar to the fluctuations affecting styrene monomer since polystyrene is largely a derivative of styrene monomer. Prices also can
change based on the operating rates of the polystyrene manufacturing facilities. Published contract pricing for high-impact polystyrene, or HIPS, is currently $0.70 per pound. The forecasted price of HIPS is expected to range between $0.59 and $0.70
during 2004.



The primary raw materials used to manufacture our
thermoformed plastic products are polypropylene resins, which are made from propylene. Polypropylene resin pricing generally will follow the raw material price of propylene and be influenced by the operating rates of the respective polypropylene
manufacturing locations. Polypropylene has had the tendency to fluctuate significantly over time. For example, the contract price for polypropylene ranged from $0.36 to $0.50 from the beginning of 2001 through April 2004 and is currently at $0.50
per pound. Independent industry surveys and producer reports project the contract price for polypropylene to decline to about $0.44 per pound by the end of 2004, from $0.50 per pound in April 2004.



14



---

Distribution Expense



The Company delivers its products from manufacturing locations using a combination of common carriers and its own fleet of
leased vehicles. Distribution expense consists of the costs to ship products, including costs of labor and leased vehicles.



Key Business Indicators



The Companys financial results are directly impacted by several key items, which management has identified as key indicators in its evaluation of
the business. These indicators include:



| |  | Sales VolumesThe comparison of unit volumes sold versus the comparable period in prior years provides key operating information.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| |  | Pricing Spread over Raw Material CostsThe selling prices of the Companys products as compared to various raw material costs, including styrene monomer,
polystyrene and polypropylene, are key financial performance metrics.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Energy-Related CostsEnergy-related costs provide key information with respect to overall profitability.
| | - | --------------------------------------------------------------------------------------------------------



Comparability of Periods



Financial results for the periods presented are not fully comparable
because of the acquisition of the operations of Polar Plastics in November 2003.



Executive Summary



The Companys profitability increased during the three months ended March 26, 2004 compared to the three months ended March 28, 2003. Higher selling prices, combined with the Acquisition and the favorable impact of changes in foreign
currency rates, were partially offset by higher raw material and energy-related costs, which resulted in a $2.0 million increase in gross profit. While gross profit increased by approximately 11%, operating expenses decreased slightly, resulting in
a $2.1 million or 84% increase in income from operations.



Consolidated Results



The following
table summarizes the results of operations for the three months ended March 26, 2004 and March 28, 2003.



|                       |  |                    |      |               |   |                    |  |   |          |   |  |      |   
|---------------------- |  | ------------------ | ---- | ------------- | - | ------------------ |  | - | -------- | - |  | ---- | --
|                       |  | Three Months Ended |      |               |   |                    |  |  
|(millions of dollars)  |  | March 26,2004      |      | March 28,2003 |   | Increase(Decrease) |  |   | % Change |  
|Sales                  |  | $                  | 96.3 |               | $ | 80.3               |  | $ | 16.0     |   |  | 19.9 | % 
|Gross profit           |  |                    | 18.7 |               |   | 16.8               |  |   | 1.9      |   |  | 11.3 | % 
|Operating expenses     |  |                    | 14.1 |               |   | 14.3               |  |   | (0.2     | ) |  | (1.4 | )%
|Income from operations |  |                    | 4.6  |               |   | 2.5                |  |   | 2.1      |   |  | 84.0 | % 



Net sales for the
three months ended March 26, 2004 were $96.3 million, a 19.9% increase from $80.3 million for the three months ended March 28, 2003. This increase was primarily caused by the Acquisition in November 2003 (9.9%), changes in foreign currency rates
(6.0%) and higher average selling prices (2.6%).





15



---

Gross profit for the three months ended March 26, 2004 increased to $18.7 million from $16.8 million for
the same fiscal quarter in the prior year. This increase was primarily caused by the Acquisition ($2.0 million) and higher average selling prices at our North American specialty chemicals and foodservice packaging operations ($2.2 million), combined
with the favorable effect of changes in foreign currency rates ($0.9 million). These increases in gross profit were partially offset by a $3.5 million increase in raw material and energy-related costs at our domestic food packaging operations.



During the three months ended March 26, 2004, operating
expenses decreased $0.1 million to $14.1 million from $14.3 million for the three months ended March 28, 2003. The decrease was primarily due to $1.8 million of expenses incurred during the three months ended March 28, 2003 related to the
extinguishment of long-term debt as described in Note 4 for which there was no corresponding expense in the current period. This was partially offset by higher distribution costs ($0.8 million), the impact of the Acquisition ($0.5 million) and
foreign currency changes ($0.5 million).



For the reasons
described above, income from operations increased by $2.1 million for the three months ended March 26, 2004 to $4.6 million from $2.5 million for the comparable period in 2003.



Interest expense increased $0.2 million to $5.6 million during the three months ended March 26, 2004 from $5.4 million in
the comparable period in the prior year, as higher average debt levels were partially offset by lower average interest rates. Other expense of $0.2 for the three months ended March 26, 2004 was comparable to the same period last year.



The effective tax rate for the three months ended March 26, 2004 increased to
39% from 38% during the same period in the prior year. As of March 26, 2004, the Company had $84.1 million of net operating loss carryforwards for federal income tax purposes, which expire through 2024.



Segment Analysis



Packaging Segment Results



The following table summarizes the packaging segment results of operations
for the three months ended March 26, 2004 and March 28, 2003.



|                       |  |                    |      |               |   |                    |  |   |          |   |  |       |   
|---------------------- |  | ------------------ | ---- | ------------- | - | ------------------ |  | - | -------- | - |  | ----- | --
|                       |  | Three Months Ended |      |               |   |                    |  |  
|(millions of dollars)  |  | March 26,2004      |      | March 28,2003 |   | Increase(Decrease) |  |   | % Change |  
|Sales                  |  | $                  | 55.9 |               | $ | 45.0               |  | $ | 10.9     |   |  | 24.2  | % 
|Gross profit           |  |                    | 12.4 |               |   | 12.2               |  |   | 0.2      |   |  | 1.6   | % 
|Operating expenses     |  |                    | 7.1  |               |   | 5.8                |  |   | 1.3      |   |  | 22.4  | % 
|Income from operations |  |                    | 5.3  |               |   | 6.4                |  |   | (1.1     | ) |  | (17.2 | )%



During the quarter
ended March 26, 2004, the Company completed the integration of its newly acquired operations in North Carolina. This integration process included the elimination of old and obsolete inventory, maintenance to improve the quality and operating
efficiencies of acquired assets and the steps necessary to eliminate approximately $13.0 million in annual costs, of which approximately $8.0 million related to costs of production. The benefits of the improved operating efficiencies and eliminated
production costs were not fully realized during the quarter due primarily to the significant amount of inventory acquired and the timing of the integration process.



Net sales in the packaging segment for the three months ended March 26, 2004 increased 24.2% to $55.9 million from $45.0
million during the three months ended March 28, 2003. The 24% increase in sales was primarily due to the Acquisition (17.7% or $8.0 million), higher average selling prices (1.8% or $0.8 million), lower sales rebates (2.1% or $0.9 million) and higher
sales volumes (0.6% or $0.3 million).



Gross profit increased
$0.2 million to $12.4 million for the three months ended March 26, 2004 from $12.2 million for the comparable fiscal quarter in 2003. This increase was primarily caused by the Acquisition ($2.0 million) and lower sales rebates ($0.9 million),
combined with higher average selling prices ($0.8 million). These increases in gross profit were largely offset by increased raw material and energy-related costs ($3.5 million).



16



---

Operating expenses increased $1.3 million to $7.1 million during the three months ended March 26, 2004
from $5.8 million during the same period in the prior year. This increase was primarily due to increased distribution expense for foam products ($0.8 million) and the acquisition of Polar Plastics ($0.5 million), including the initial distribution
of acquired products to our 10 domestic distribution centers.



For the reasons described above, income from operations decreased $1.1 million to $5.3 million for the three months ended March 26, 2004 from $6.4 million in the prior year period.



Specialty Chemicals Segment Results



The following table summarizes the specialty chemicals segment results of
operations for the three months ended March 26, 2004 and March 28, 2003.



|                       |  |                    |      |               |   |                    |  |          |     |  |       |  
|---------------------- |  | ------------------ | ---- | ------------- | - | ------------------ |  | -------- | --- |  | ----- | -
|                       |  | Three Months Ended |      |               |   |                    | 
|(millions of dollars)  |  | March 26,2004      |      | March 28,2003 |   | Increase(Decrease) |  | % Change |    
|Sales                  |  | $                  | 43.3 |               | $ | 37.1               |  | $        | 6.2 |  | 16.7  | %
|Gross profit           |  |                    | 6.3  |               |   | 4.6                |  |          | 1.7 |  | 37.0  | %
|Operating expenses     |  |                    | 4.6  |               |   | 4.2                |  |          | 0.4 |  | 9.5   | %
|Income from operations |  |                    | 1.7  |               |   | 0.4                |  |          | 1.3 |  | 325.0 | %



For the three months
ended March 26, 2004, net sales in the specialty chemicals segment increased 16.7% to $43.3 million from $37.1 million during the three months ended March 28, 2003. This increase was primarily due to the impact of changes in foreign currency
exchange rates (13.0% or $4.8 million) driven by the strengthening of both the Euro and the Canadian dollar, combined with higher selling prices (3.5% or $1.3 million). Net sales included $2.9 million and $1.8 million of sales to the packaging
segment for the three months ended March 26, 2004 and March 28, 2003, respectively, which were eliminated in consolidation.



Gross profit increased by $1.8 million to $6.3 million or 14.5% of net sales for the three months ended March 26, 2004 from $4.6 million or 12.4% of net
sales for the similar three-month period in 2003. This increase was primarily due to higher EPS selling prices ($1.4 million) resulting from price increases implemented during the first quarter of 2004, combined with the favorable impact of changes
in foreign currency exchange rates ($0.9 million). These increases in gross profit were partially offset by higher raw material costs ($0.8 million).



For the three months ended March 26, 2004, operating expenses increased by $0.4 million to $4.6 million from $4.2 million in the prior year period
primarily due to changes in foreign currency rates.



For the
reasons described above, income from operations increased $1.3 million to $1.7 million during the three months ended March 26, 2004 compared to $0.4 million in the prior year period.



Corporate and Other



Corporate operating expenses decreased by $1.8 million during the fiscal quarter ended March 26, 2004 compared to the first fiscal quarter of 2003. This
decrease was due to $1.8 million in other expenses related to the extinguishment of long-term debt that occurred on March 11, 2003 for which there was no corresponding expense in the current period.



17



---

Liquidity and Capital Resources



During the three-month period ended March 26, 2004, the Company had after tax cash flow of $3.1 million and an increase in
working capital of $14.3 million, resulting in negative cash flow from operating activities of $11.2 million. The increase in working capital was primarily due to higher accounts receivable ($7.6 million) and higher inventory ($5.5 million),
combined with lower accrued liabilities ($7.0 million), partially offset by higher accounts payable ($6.4 million). Accounts receivable increased due to higher sales volumes and the impact of changes in foreign currency exchange rates at the
European specialty chemicals operations, while inventory increased due to the normal seasonal ramp up of production. The increase in accounts payable was primarily due to higher raw material costs, while accrued liabilities decreased mainly due to
interest payments on the Senior Notes.



During three
months ended March 26, 2004, inventory turnover was approximately 5.5 times per year compared to 5.9 during the same period last year, due in part to the Acquisition. As of March 26, 2004, the average collection period for our accounts receivable
was 42 days as compared to 43 days in the prior year period.



The Company used $5.6 million in investing activities during the three months ended March 26, 2004. The Company made $2.8 million in capital expenditures while other assets increased by $3.5 million primarily due to payments related to raw
material supply contracts, which are amortized over the length of the contracts, and deposits paid related to the purchase of new manufacturing equipment. Distributions received from investments exceeded additional investments by $0.7 million during
the three-month period.



On April 27, 2004, the Company issued
$70.0 million of Senior Secured Floating Rate Notes due 2009. The notes bear interest at a floating rate of LIBOR plus 6.75% per year. Interest on the notes will reset quarterly and will be payable quarterly beginning on July 15, 2004. The notes
will mature on April 15, 2009. The net proceeds were used to repay a then outstanding $40.5 million term loan and outstanding borrowings under the existing revolving credit facilities.



As of March 26, 2004, the Company had $60.2 million outstanding under its revolving credit facilities, of which $27.6
million was repaid with proceeds from the sale of the Senior Secured Floating Rate Notes due 2009. After taking into account cash on hand, and the subsequent issuance of the $70.0 million Senior Secured Floating Rate Notes due 2009, we would have
had the ability to draw up to an additional $26.8 million under these facilities as of March 26, 2004. The principal uses of cash for the next several years will be debt service, capital expenditures and working capital requirements. From time to
time, the Company evaluates and may pursue various capital raising transactions including the sale of debt or equity securities and the divestiture of non-core assets, which will enhance the Companys overall liquidity and improve its capital
structure.



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. Under the Companys current business plan, the Company expects that in 2004 and in the long-term, cash generated from operations will be sufficient to meet the Companys expected operating needs. However, as a result of
uncertainties including pricing of the Companys products, general market and economic conditions and fluctuations in raw material prices, the Company is not able to accurately predict the amount of cash that will be generated from operating
activities and cash generated from operating activities, if any, may not be sufficient to meet the Companys operating needs. To the extent that the Company uses cash in operating activities, we expect that such amounts will be financed from
borrowings under credit facilities.



18



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Contractual Obligations and Commercial Commitments



The Company has future obligations for debt repayments, capital leases,
future minimum rental and similar commitments under noncancelable operating leases, non-competition agreement and purchase obligations as well as contingent obligations related to outstanding letters of credit. These obligations as of December 26,
2003 are summarized in the table below.





|                                            |  |                        |         |                 |   |           |  |           |         |               |   |         |  |   |        
|------------------------------------------- |  | ---------------------- | ------- | --------------- | - | --------- |  | --------- | ------- | ------------- | - | ------- |  | - | -------
|                                            |  | Payments Due by Period
|Contractual Obligations                     |  | Total                  |         | Less than1 year |   | 1-3 years |  | 4-5 years |         | After 5 years
|Long-term borrowings, including interest(1) |  | $                      | 367,915 |                 | $ | 33,365    |  | $         | 61,781  |               | $ | 102,803 |  | $ | 169,966
|Capital lease obligations                   |  |                        | 9,309   |                 |   | 2,760     |  |           | 4,778   |               |   | 1,771   |  |   |       
|Operating lease obligations                 |  |                        | 51,670  |                 |   | 7,954     |  |           | 10,991  |               |   | 8,152   |  |   | 24,573 
|Non-compete obligations                     |  |                        | 3,000   |                 |   | 600       |  |           | 1,200   |               |   | 1,200   |  |   |       
|Purchase obligations(2)                     |  |                        | 313,830 |                 |   | 103,830   |  |           | 105,000 |               |   | 70,000  |  |   | 35,000 
|                                            |  |                        |         |                 |   |           |  |           |         |               |   |         |  |   |        
|                                            |  | $                      | 745,724 |                 | $ | 148,509   |  | $         | 183,750 |               | $ | 183,926 |  | $ | 229,539
|                                            |  |                        |         |                 |   |           |  |           |         |               |   |         |  |   |        



|(1) | As adjusted to give effect to the sale of the $70.0 million Senior Secured Floating Rate Notes due 2009, as described in Note 5 above, and the application of the net proceeds
therefrom, these amounts as of December 26, 2003 would have been: $391,600, total; $26,858, less than 1 year; $53,975, 1-3 years; $67,994, 4-5 years; and $242,773, after 5 years.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | These amounts represent commitments under long-term styrene monomer supply contracts, as discussed in Note 6 to the consolidated financial statements in the Companys annual
report on Form 10-K for fiscal 2003, as well as short term commitments under natural gas contracts.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There have been no material changes to the Commercial Commitments as reflected in the Managements Discussion and Analysis in the Companys
annual report on Form 10-K for fiscal 2003. Reference is made to Notes 5 and 6 to the consolidated financial statements in the Companys annual report on Form 10-K for fiscal 2003 for additional information on long-term debt, leases and
commitments and contingencies.



Critical Accounting Policies and
Estimates



Managements Discussion and Analysis
of Financial Condition and Results of Operations 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 2003 annual report on Form 10-K 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 condensed consolidated financial statements included herein. Otherwise, there were no
changes in the Companys



19



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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 for the
year ended December 26, 2003, Commission File No. 333-19495, to which reference is hereby made.



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



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



Under the supervision of the Chief Executive Officer and Chief Financial Officer, the Companys management conducted an evaluation of the
effectiveness of the design and operation of the Companys disclosure controls and procedures as of March 26, 2004. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of its
disclosure controls and procedures have been effective in ensuring that information required to be disclosed by the Company in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There have been no changes in the Companys internal control over financial reporting subsequent to the date of such evaluation.



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



No significant changes were made in the Companys internal controls during the fiscal quarter ended March 26, 2004 that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over financial reporting.



20



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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
|--- | --------



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|4.1  |  | Indenture, dated as of April 27, 2004, among Radnor Holdings Corporation, as issuer, and Radnor Chemical Corporation, Radnor Delaware II, Inc., Radnor Management Delaware, Inc., Radnor
Management, Inc., StyroChem Delaware, Inc., StyroChem Europe Delaware, Inc., StyroChem U.S., Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup Europe Delaware, Inc., WinCup GP, L.L.C., WinCup LP, L.L.C., WinCup Texas, Ltd. and WinCup
Holdings, Inc., as guarantors, and Wachovia Bank, National Association, as trustee, including form of Notes and Guarantees
|     | 
|4.2  |  | Exchange and Registration Rights Agreement, dated as of April 27, 2004, between Radnor Holdings Corporation, Radnor Chemical Corporation, Radnor Delaware II, Inc., Radnor Management Delaware,
Inc., Radnor Management, Inc., StyroChem Delaware, Inc., StyroChem Europe Delaware, Inc., StyroChem U.S., Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup Europe Delaware, Inc., WinCup GP, L.L.C., WinCup LP, L.L.C., WinCup Texas, Ltd. and
WinCup Holdings, Inc., as issuers, and Lehman Brothers Inc., as initial purchaser                            
|     | 
|10.1 |  | Eighth Amendment to Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated April 27, 2004, by and among WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd, Radnor Holdings Corporation, Radnor Delaware II, Inc., StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., and WinCup LP, L.L.C. and PNC Bank, National
Association                                                                                                                        
|     | 
|10.2 |  | Security Agreement, dated as of April 27, 2004, among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation, StyroChem U.S., Ltd., Radnor Delaware II, Inc.,
StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.L.C. and Wachovia Bank, National Association, as collateral agent                                                                                                                                                                                  
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to Section 1350 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                       
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to Section 1350 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                       



21



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



The Company filed a Current Report on Form 8-K under Item 9 on March 18, 2004 to announce a conference call held on March 24, 2004 to discuss its
consolidated financial results for the fiscal year ended December 26, 2003.



The Company filed a Current Report on Form 8-K/A under Item 7 on January 23, 2004 as an amendment to the Companys Form 8-K Current Report under Item 2 and Item 7 dated November 14, 2003 (date of earliest event
reported), filed with the Securities and Exchange Commission on November 26, 2003. This Form 8-K included the consolidated financial statements of Polar Plastics Inc., unaudited pro forma consolidated financial statements and required exhibits.



22



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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: |  | May 7, 2004 |  |  |  | By:                         |  | /s/    Michael V.
Valenza                                                   
|      |  |             |  |  |  |                             |  | Michael V. Valenza Senior Vice
PresidentFinance and Chief Financial Officer



23