<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended   June 30, 1999
                               -------------------------------------------------
                                       OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                        to
                               ----------------------    -----------------------

                         Commission file number 0-23378
                                                -------

                         Thermadyne Holdings Corporation
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

Delaware                                                 74-2482571
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                        Commission file number 333-57457
                                               ---------

                               Thermadyne Mfg. LLC
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

Delaware                                                 74-2878452
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                        Commission file number 333-57457
                                               ---------

                            Thermadyne Capital Corp.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

Delaware                                                 74-2878453
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

101 S. Hanley, St. Louis, MO                                63105
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                 (Zip Code)

Registrant's Telephone Number, Including Area Code    314/721-5573
                                                    ----------------------------

Indicate by [X] 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 has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                        Yes   [X]      No
                                             -----        -----

The number of shares outstanding of the issuer's common stock, par value $0.01
per share, as of August 10, 1999 was 3,590,326.

Thermadyne Mfg. LLC and Thermadyne Capital Corp. meet the conditions set forth
in General Instruction H(1) of Form 10-Q and are therefore filing this form with
the reduced disclosure format.


<PAGE>   2

                         THERMADYNE HOLDINGS CORPORATION

                                      INDEX


<TABLE>
<S>                                                                                    <C>
PART I - FINANCIAL INFORMATION

     Item 1.    Condensed Consolidated Financial Statements of
                Thermadyne Holdings Corporation

                Condensed Consolidated Balance Sheets....................................3
                Condensed Consolidated Statements of Operations..........................4
                Condensed Consolidated Statements of Cash Flows..........................5
                Notes to Condensed Consolidated Financial Statements...................6-9

                Condensed Consolidated Financial Statements of Thermadyne Mfg. LLC

                Condensed Consolidated Balance Sheets...................................10
                Condensed Consolidated Statements of Operations.........................11
                Condensed Consolidated Statements of Cash Flows.........................12
                Notes to Condensed Consolidated Financial Statements.................13-21

     Item 2.    Management's Discussion and Analysis
                of Financial Condition and Results of Operations.....................22-27

     Item 3.    Quantitative and Qualitative Disclosures About Market Risk..............27

PART II - OTHER INFORMATION

     Item 4.    Submission of matters to a vote of security holders.....................28

     Item 6.    Exhibits and Reports on Form 8-K .......................................28

SIGNATURES ..........................................................................29-31
</TABLE>

<PAGE>   3

                         THERMADYNE HOLDINGS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                        June 30,    December 31,
                                                                          1999          1998
                                                                      -----------   ------------
                                                                      (Unaudited)
         ASSETS
<S>                                                                    <C>            <C>
Current Assets:
  Cash and cash equivalents                                            $   7,082      $   1,319
  Accounts receivable, less allowance for doubtful
    accounts of $3,246 and $2,852, respectively                           83,850         87,905
  Inventories                                                            121,506        122,733
  Prepaid expenses and other                                               5,141          7,365
                                                                       ---------      ---------
       Total current assets                                              217,579        219,322
Property, plant and equipment, at cost, net                               99,691        104,997
Deferred financing costs, net                                             21,255         23,118
Intangibles, at cost, net                                                 43,788         39,159
Deferred income taxes                                                     33,660         32,402
Other assets                                                               2,501          1,251
                                                                       ---------      ---------
       Total assets                                                    $ 418,474      $ 420,249
                                                                       =========      =========

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current Liabilities:
  Accounts payable                                                     $  42,681      $  44,170
  Accrued and other liabilities                                           26,760         36,444
  Accrued interest                                                         7,452          3,154
  Income taxes payable                                                     4,523          5,211
  Current maturities of long-term obligations                             10,442          9,180
                                                                       ---------      ---------
     Total current liabilities                                            91,858         98,159
Long-term obligations, less current maturities                           709,336        701,529
Other long-term liabilities                                               63,084         62,834
Redeemable preferred stock (paid in kind), $0.01 par value,
  15,000,000 shares authorized and 2,000,000 shares outstanding           57,624         54,053
Shareholders' deficit:
  Common stock, $0.01 par value, 30,000,000 shares authorized, and
    3,590,326 and 3,236,898 shares issued and outstanding at
    June 30, 1999 and December 31, 1998, respectively                         36             32
  Additional paid-in capital                                            (116,725)      (116,551)
  Accumulated deficit                                                   (363,087)      (360,520)
  Management loans                                                        (3,857)        (3,753)
  Accumulated other comprehensive loss                                   (19,795)       (15,534)
                                                                       ---------      ---------
      Total shareholders' deficit                                       (503,428)      (496,326)
                                                                       ---------      ---------
      Total liabilities and shareholders' deficit                      $ 418,474      $ 420,249
                                                                       =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4


                         THERMADYNE HOLDINGS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   Three Months   Three Months    Six Months     Six Months
                                                                       Ended          Ended          Ended          Ended
                                                                   June 30, 1999  June 30, 1998  June 30, 1999  June 30, 1998
                                                                   -------------  -------------  -------------  -------------
<S>                                                                  <C>            <C>            <C>            <C>
 Net sales                                                           $ 133,465      $ 135,709      $ 263,699      $ 267,538
 Operating expenses:
   Cost of goods sold                                                   85,190         84,337        168,825        166,121
   Selling, general and administrative expenses                         25,344         25,310         49,890         52,374
   Amortization of intangibles                                           1,432            957          2,469          1,857
   Net periodic postretirement benefits                                  1,250            450          2,300          1,100
   Special charges                                                       1,535         44,217          4,409         44,217
                                                                     ---------      ---------      ---------      ---------
   Operating income (loss)                                              18,714        (19,562)        35,806          1,869
 Other income (expense):
   Interest expense                                                    (17,572)       (13,897)       (35,314)       (24,731)
   Amortization of deferred financing costs                               (898)          (540)        (1,786)          (910)
   Other, net                                                              938         (1,140)         1,782           (974)
                                                                     ---------      ---------      ---------      ---------
Income (loss) before income tax provision and extraordinary item         1,182        (35,139)           488        (24,746)
Income tax provision (benefit)                                           3,413         (3,049)         3,055          1,535
                                                                     ---------      ---------      ---------      ---------
Income (loss) before extraordinary item                                 (2,231)       (32,090)        (2,567)       (26,281)
Extraordinary item-loss on early extinguishment of debt,
 net of tax benefit of $8,151                                               --        (15,137)            --        (15,137)
                                                                     ---------      ---------      ---------      ---------
Net loss                                                                (2,231)       (47,227)        (2,567)       (41,418)
Preferred stock dividends (paid in kind)                                 1,815            704          3,572            704
                                                                     ---------      ---------      ---------      ---------
Net loss applicable to common shares                                 $  (4,046)     $ (47,931)     $  (6,139)     $ (42,122)
                                                                     =========      =========      =========      =========

Basic and diluted loss per share amounts applicable to
   common shares:
     Loss before extraordinary item                                  $   (1.13)     $   (4.25)     $   (1.73)     $   (2.86)
     Net loss                                                        $   (1.13)     $   (6.22)     $   (1.73)     $   (4.46)
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>   5

                         THERMADYNE HOLDINGS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Six Months      Six Months
                                                                  Ended          Ended
                                                              June 30, 1999   June 30, 1998
                                                              -------------   -------------
<S>                                                           <C>            <C>
Cash flows provided by (used in) operating activities:
  Net loss                                                      $  (2,567)     $ (41,418)
  Adjustments to reconcile net loss to
    net cash provided by (used in) operating activities:
      Net periodic postretirement benefits                          2,300          1,100
      Depreciation                                                  9,455          7,112
      Amortization of intangibles                                   2,469          1,857
      Non-cash interest expense                                     6,367          1,286
      Amortization of deferred financing costs                      1,786            910
      Recognition of net operating loss carryforwards               3,401             --
      Deferred income taxes                                        (1,077)        (5,240)
      Issuance of common stock warrants                                --         12,190
      Extraordinary item                                               --         (2,272)
Changes in operating assets and liabilities:
      Accounts receivable                                           7,952         (9,989)
      Inventories                                                   4,600        (20,780)
      Prepaid expenses and other                                    2,693           (916)
      Accounts payable                                             (3,332)        (6,892)
      Accrued and other liabilities                               (10,879)        (4,124)
      Accrued interest                                              4,282         (2,198)
      Income taxes payable                                         (1,094)         6,265
      Other long-term liabilities                                  (2,495)        (2,046)
                                                                ---------      ---------
      Total adjustments                                            26,428        (23,737)
                                                                ---------      ---------
        Net cash provided by (used in) operating activities        23,861        (65,155)
                                                                ---------      ---------
Cash flows used in investing activities:
     Capital expenditures, net                                     (5,182)        (8,466)
     Change in other assets                                        (1,389)          (465)
     Acquisitions, net of cash                                     (5,884)        (3,654)
                                                                ---------      ---------
        Net cash used in investing activities                     (12,455)       (12,585)
                                                                ---------      ---------
Cash flows provided by (used in) financing activities:
     Change in long-term receivables                                 (101)           449
     Repayment of long-term obligations                            (2,544)      (390,002)
     Borrowing of long-term obligations                             3,356        727,106
     Issuance of common stock                                           4         90,335
     Issuance of preferred stock                                       --         50,000
     Repurchase of common stock                                        --       (368,815)
     Change in accounts receivable securitization                  (1,140)        (2,642)
     Financing fees                                                    --        (23,820)
     Other                                                         (5,218)         4,486
                                                                ---------      ---------
        Net cash provided by (used in)financing activities         (5,643)        87,097
                                                                ---------      ---------
Net increase in cash and cash equivalents                           5,763          9,357
Cash and cash equivalents at beginning of period                    1,319          1,481
                                                                ---------      ---------
Cash and cash equivalents at end of period                      $   7,082      $  10,838
                                                                =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5

<PAGE>   6

                         THERMADYNE HOLDINGS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     As used in this report, the term "Mercury" means Mercury Acquisition
     Corporation, the term "Issuer" means Mercury before the merger of the
     Company in May of 1998 (the "Merger") and Thermadyne Holdings Corporation
     after the Merger, the term "Holdings" means Thermadyne Holdings
     Corporation, the terms "Thermadyne" and the "Company" mean Thermadyne
     Holdings Corporation, its predecessors and subsidiaries, the term
     "Thermadyne LLC" means Thermadyne Mfg. LLC, a wholly owned and the
     principal operating subsidiary of Thermadyne Holdings Corporation, and the
     term "Thermadyne Capital" means Thermadyne Capital Corp., a wholly owned
     subsidiary of Thermadyne LLC.

     UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements of
     Holdings have been prepared in accordance with generally accepted
     accounting principles for interim financial information and with the
     instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
     they do not include all of the information and footnotes required by
     generally accepted accounting principles for complete financial statements.
     In the opinion of management, all adjustments (consisting of normal
     recurring accruals) considered necessary for a fair presentation have been
     included. Operating results for the three and six month periods ended June
     30, 1999 are not necessarily indicative of the results that may be expected
     for the year ended December 31, 1999. For further information, refer to the
     consolidated financial statements and footnotes thereto included in the
     Company's annual report on Form 10-K for the year ended December 31, 1998.

     STATEMENTS OF CASH FLOWS

     For purposes of the Statements of Cash Flows, the Company considers all
     highly liquid investments purchased with a maturity of three months or less
     to be cash equivalents. Interest and taxes paid were as follows:

<TABLE>
<CAPTION>

                                          Six Months         Six Months
                                             Ended             Ended
                                         June 30, 1999      June 30,1998
                                         -------------      ------------
<S>                                      <C>                <C>
         Interest                          $  16,142          $  25,778
         Taxes                                   689                703
</TABLE>


                                       6
<PAGE>   7
                        THERMADYNE HOLDINGS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

     LOSS PER SHARE

     The following table sets forth the information used in the computation of
     basic and diluted loss per share for the periods indicated.

<TABLE>
<CAPTION>
                                              Three Months       Three Months        Six Months         Six Months
                                                  Ended             Ended               Ended              Ended
                                              June 30, 1999      June 30, 1998      June 30, 1999      June 30, 1998
                                              -------------      -------------      -------------      -------------
<S>                                           <C>                <C>                <C>                <C>
Basic and diluted loss per share
 applicable to common shares:
Loss before extraordinary item                $       (1.13)     $       (4.25)     $       (1.73)     $       (2.86)
Extraordinary item                                       --              (1.97)                --              (1.60)
                                              -------------      -------------      -------------      -------------
Net loss                                      $       (1.13)     $       (6.22)     $       (1.73)     $       (4.46)
                                              =============      =============      =============      =============

Weighted average shares-basic and diluted
  loss per share                                  3,590,326          7,709,393          3,543,463          9,449,299
                                              =============      =============      =============      =============
</TABLE>


2.   INVENTORIES

     The composition of inventories at June 30, 1999 was as follows:

<TABLE>
<S>                                               <C>
             Raw materials                        $  27,538
             Work-in-process                         27,306
             Finished goods                          68,232
             LIFO Reserve                            (1,570)
                                                  ---------
             Total                                $ 121,506
                                                  =========
</TABLE>


                                       7
<PAGE>   8

                         THERMADYNE HOLDINGS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

3.   SEGMENT INFORMATION

     The Company has adopted the Financial Accounting Standards Board Statement
     No. 131, "Disclosures about Segments of an Enterprise and Related
     Information" ("FASB 131") which changes the way the Company reports
     information about its operating segments.

     The Company reports its segment information by geographic region. Although
     the Company's domestic operation is comprised of several individual
     business units, similarity of products, paths to market, end users, and
     production processes results in performance evaluation and decisions
     regarding allocation of resources being made on a combined basis. The
     Company's reportable geographic regions are the United States, Europe and
     Australia/Asia.

     The Company evaluates performance and allocates resources based principally
     on operating income net of any special charges or significant one-time
     charges. The accounting policies of the reportable segments are the same as
     those described in the summary of significant accounting policies.
     Intersegment sales are based on market prices.

     Summarized financial information concerning the Company's reportable
     segments is shown in the following table. Export sales from the United
     States are included in the United States segment. The "Other" column
     includes the elimination of intersegment sales and profits, corporate
     related items and other costs not allocated to the reportable segments.

<TABLE>
<CAPTION>
                                                                            Other
                                     United                  Australia/   Geographic
                                     States       Europe        Asia        Regions      Other    Consolidated
                                    --------     --------    ----------   ----------    --------  ------------
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>
Six Months Ended June 30, 1999
Revenue from external customers     $176,364     $ 27,012     $ 39,551     $ 20,772     $     --     $263,699
Intersegment revenues                 19,306        7,023        2,136           --      (28,465)          --
Operating income (loss)               44,246        1,566       (1,088)        (734)      (8,184)      35,806

Six Months Ended June 30, 1998
Revenue from external customers     $171,352     $ 33,588     $ 47,596     $ 15,002     $     --     $267,538
Intersegment revenues                 21,709        8,733        2,570           --      (33,012)          --
Operating income (loss)               50,683        2,096         (657)         303      (50,556)       1,869
</TABLE>

                                       8
<PAGE>   9


                         THERMADYNE HOLDINGS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

4.   REORGANIZATION AND REALIGNMENT

     Special charges of $1.5 million and $4.4 million were recorded in the three
     and six month periods ended June 30, 1999, respectively. These charges were
     recorded in connection with the ongoing reorganization and realignment of
     the Company which began in the third quarter of 1998. These charges, which
     were recorded in accordance with EITF issue 94-3, are primarily for
     headcount reductions and relate to employee severance and related benefits,
     and for rationalization of the Company's Australian facility.

5.   COMPREHENSIVE LOSS

     During the first six months of 1999 and 1998, total comprehensive loss
     amounted to $(6,828) and $(43,959), respectively.


                                       9
<PAGE>   10

                               THERMADYNE MFG. LLC
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                        June 30,     December 31,
                                                          1999           1998
                                                      -----------    ------------
                                                      (Unaudited)
<S>                                                    <C>            <C>
ASSETS

Current Assets:
  Cash and cash equivalents                            $   7,082      $   1,319
  Accounts receivable, less allowance for doubtful
    accounts of $3,246 and $2,852, respectively           83,850         87,905
  Inventories                                            121,506        122,733
  Prepaid expenses and other                               5,141          7,365
                                                       ---------      ---------
       Total current assets                              217,579        219,322
Property, plant and equipment, at cost, net               99,691        104,997
Deferred financing costs, net                             17,899         19,572
Intangibles, at cost, net                                 43,788         39,159
Deferred income taxes                                     30,393         29,135
Other assets                                               2,501          1,251
                                                       ---------      ---------
       Total assets                                    $ 411,851      $ 413,436
                                                       =========      =========

LIABILITIES AND SHAREHOLDER'S DEFICIT

Current Liabilities:
  Accounts payable                                     $  42,681      $  44,170
  Accrued and other liabilities                           26,760         36,444
  Accrued interest                                         6,788            498
  Income taxes payable                                     4,523          5,211
  Current maturities of long-term obligations             10,442          9,180
                                                       ---------      ---------
     Total current liabilities                            91,194         95,503
Long-term obligations, less current maturities           564,028        562,588
Other long-term liabilities                               63,084         62,834
Shareholder's deficit:
  Accumulated deficit                                   (362,530)      (368,408)
  Accumulated other comprehensive loss                   (19,795)       (15,534)
                                                       ---------      ---------
     Total shareholder's deficit                        (382,325)      (383,942)
Net equity and advances to / from parent                  75,870         76,453
                                                       ---------      ---------
Total liabilities and shareholder's deficit            $ 411,851      $ 413,436
                                                       =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       10
<PAGE>   11

                               THERMADYNE MFG. LLC
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Three Months      Three Months      Six Months         Six Months
                                                                   Ended            Ended             Ended              Ended
                                                               June 30, 1999     June 30, 1998    June 30, 1999      June 30, 1998
                                                               -------------     ------------     -------------      -------------
<S>                                                            <C>               <C>               <C>               <C>
   Net sales                                                     $ 133,465         $ 135,709         $ 263,699         $ 267,538
   Operating expenses:
      Cost of goods sold                                            85,190            84,337           168,825           166,121
      Selling, general and administrative expenses                  25,344            25,310            49,890            52,374
      Amortization of intangibles                                    1,432               957             2,469             1,857
      Net periodic postretirement benefits                           1,250               450             2,300             1,100
      Special charges                                                1,535            44,217             4,409            44,217
                                                                 ---------         ---------         ---------         ---------
      Operating income (loss)                                       18,714           (19,562)           35,806             1,869
   Other income (expense):
      Interest expense                                             (13,362)          (12,294)          (26,955)          (23,128)
      Amortization of deferred financing costs                        (804)             (509)           (1,596)             (879)
      Other, net                                                       886            (1,140)            1,678              (974)
                                                                 ---------         ---------         ---------         ---------
   Income (loss) before income
     tax provision and extraordinary item                            5,434           (33,505)            8,933           (23,112)
    Income tax provision (benefit)                                   3,413            (3,049)            3,055             1,535
                                                                 ---------         ---------         ---------         ---------
 Income (loss) before extraordinary item                             2,021           (30,456)            5,878           (24,647)
 Extraordinary item-loss on early extinguishment of debt,
   net of tax benefit of $8,151                                         --           (15,137)               --           (15,137)
                                                                 ---------         ---------         ---------         ---------
 Net income (loss)                                               $   2,021         $ (45,593)        $   5,878         $ (39,784)
                                                                 =========         =========         =========         =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       11

<PAGE>   12

                               THERMADYNE MFG. LLC
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                               Six Months     Six Months
                                                                 Ended         Ended
                                                             June 30, 1999  June 30, 1998
                                                             -------------  -------------
<S>                                                          <C>            <C>
Cash flows provided by (used in) operating activities:
  Net income (loss)                                            $   5,878      $ (39,784)
  Adjustments to reconcile net income(loss) to
    net cash provided by (used in) operating activities:
     Net periodic postretirement benefits                          2,300          1,100
     Depreciation                                                  9,455          7,112
     Amortization of intangibles                                   2,469          1,857
     Amortization of deferred financing costs                      1,596            879
     Recognition of net operating loss carryforwards               3,401             --
     Deferred income taxes                                        (1,077)        (5,240)
     Extraordinary item                                               --         (2,272)
Changes in operating assets and liabilities:
     Accounts receivable                                           7,952         (9,989)
     Inventories                                                   4,600        (20,780)
     Prepaid expenses and other                                    2,693           (916)
     Accounts payable                                             (3,332)        (6,892)
     Accrued and other liabilities                               (10,879)        (4,124)
     Accrued interest                                              6,274         (2,832)
     Income taxes payable                                         (1,094)         6,265
     Other long-term liabilities                                  (2,495)        (2,046)
                                                               ---------      ---------
     Total adjustments                                            21,863        (37,878)
                                                               ---------      ---------
       Net cash provided by (used in) operating activities        27,741        (77,662)
                                                               ---------      ---------
Cash flows used in investing activities:
     Capital expenditures, net                                    (5,182)        (8,466)
     Change in other assets                                       (1,389)          (465)
     Acquisitions, net of cash                                    (5,884)        (3,654)
                                                               ---------      ---------
       Net cash used in investing activities                     (12,455)       (12,585)
                                                               ---------      ---------
Cash flows provided by (used in) financing activities:
     Change in long-term receivables                                (101)           449
     Repayment of long-term obligations                           (2,544)      (390,002)
     Borrowing of long-term obligations                            3,356        595,432
     Change in accounts receivable securitization                 (1,140)        (2,642)
     Financing fees                                                   --        (20,054)
     Change in net equity of parent                               (3,984)       (87,303)
     Other                                                        (5,110)         3,724
                                                               ---------      ---------
       Net cash provided by (used in) financing activities        (9,523)        99,604
                                                               ---------      ---------
Net increase in cash and cash equivalents                          5,763          9,357
Cash and cash equivalents at beginning of period                   1,319          1,481
                                                               ---------      ---------
Cash and cash equivalents at end of period                     $   7,082      $  10,838
                                                               =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       12
<PAGE>   13


                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     As used in this report, the term "Mercury" means Mercury Acquisition
     Corporation, the term "Issuer" means Mercury before the merger of the
     Company in May of 1998 (the "Merger") and Thermadyne Holdings Corporation
     after the Merger, the term "Holdings" means Thermadyne Holdings
     Corporation, the term "Thermadyne" means Thermadyne Holdings Corporation,
     its predecessors and subsidiaries, the terms "Thermadyne LLC" and the
     "Company" mean Thermadyne Mfg. LLC, a wholly owned and the principal
     operating subsidiary of Thermadyne Holdings Corporation, and the term
     "Thermadyne Capital" means Thermadyne Capital Corp., a wholly owned
     subsidiary of Thermadyne LLC.

     UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements of
     Thermadyne LLC and Thermadyne Capital have been prepared in accordance with
     generally accepted accounting principles for interim financial information
     and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
     Accordingly, they do not include all of the information and footnotes
     required by generally accepted accounting principles for complete financial
     statements. In the opinion of management, all adjustments (consisting of
     normal recurring accruals) considered necessary for a fair presentation
     have been included. Operating results for the three and six month periods
     ended June 30, 1999 are not necessarily indicative of the results that may
     be expected for the year ended December 31, 1999. For further information,
     refer to the consolidated financial statements and footnotes thereto
     included in the Company's annual report on Form 10-K for the year ended
     December 31, 1998.

     CO-ISSUER

     Thermadyne Capital, a wholly-owned subsidiary of Thermadyne LLC, was formed
     solely for the purpose of serving as co-issuer of the 9-7/8% Senior
     Subordinated Notes due 2008 (the "Senior Subordinated Notes"). Thermadyne
     Capital has no substantial assets or liabilities and no operations of any
     kind and the Indenture pursuant to which the Senior Subordinated Notes were
     issued limits Thermadyne Capital's ability to acquire or hold any
     significant assets, incur any liabilities or engage in any business
     activities, other than in connection with the issuance of the Senior
     Subordinated Notes.


                                       13
<PAGE>   14

                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

     STATEMENTS OF CASH FLOWS

     For purposes of the Statements of Cash Flows, the Company considers all
     highly liquid investments purchased with a maturity of three months or less
     to be cash equivalents. Interest and taxes paid were as follows:

<TABLE>
<CAPTION>
                                   Six Months       Six Months
                                     Ended             Ended
                                 June 30, 1999     June 30, 1998
                                 -------------     -------------
<S>                              <C>               <C>
         Interest                  $   14,150        $   26,095
         Taxes                            689               703
</TABLE>

2.   INVENTORIES

     The composition of inventories at June 30, 1999 was as follows:

<TABLE>
<S>                                                  <C>
              Raw materials                          $  27,538
              Work-in-process                           27,306
              Finished goods                            68,232
              LIFO Reserve                              (1,570)
                                                     ---------
                            Total                    $ 121,506
                                                     =========
</TABLE>

3.   SEGMENT INFORMATION

     The Company has adopted the Financial Accounting Standards Board Statement
     No. 131, "Disclosures about Segments of an Enterprise and Related
     Information" ("FASB 131") which changes the way the Company reports
     information about its operating segments.

     The Company reports its segment information by geographic region. Although
     the Company's domestic operation is comprised of several individual
     business units, similarity of products, paths to market, end users, and
     production processes results in performance evaluation and decisions
     regarding allocation of resources being made on a combined basis. The
     Company's reportable geographic regions are the United States, Europe and
     Australia/Asia.

     The Company evaluates performance and allocates resources based principally
     on operating income net of any special charges or significant one-time
     charges. The accounting policies of the reportable segments are the same as
     those described in the summary of significant accounting policies.
     Intersegment sales are based on market prices.

                                       14

<PAGE>   15

                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

     Summarized financial information concerning the Company's reportable
     segments is shown in the following table. Export sales from the United
     States are included in the United States segment. The "Other" column
     includes the elimination of intersegment sales and profits, corporate
     related items and other costs not allocated to the reportable segments.

<TABLE>
<CAPTION>
                                                                            Other
                                     United                  Australia/   Geographic
                                     States       Europe        Asia        Regions      Other    Consolidated
                                    --------     --------    ----------   ----------    --------  ------------
<S>                                 <C>          <C>          <C>          <C>          <C>       <C>
Six Months Ended June 30, 1999
Revenue from external customers     $176,364     $ 27,012     $ 39,551     $ 20,772     $     --     $263,699
Intersegment revenues                 19,306        7,023        2,136           --      (28,465)          --
Operating income (loss)               44,246        1,566       (1,088)        (734)      (8,184)      35,806

Six Months Ended June 30, 1998
Revenue from external customers     $171,352     $ 33,588     $ 47,596     $ 15,002     $     --     $267,538
Intersegment revenues                 21,709        8,733        2,570           --      (33,012)          --
Operating income (loss)               50,683        2,096         (657)         303      (50,556)       1,869
</TABLE>


4.   REORGANIZATION AND REALIGNMENT

     Special charges of $1.5 million and $4.4 million were recorded in the three
     and six month periods ended June 30, 1999, respectively. These charges were
     recorded in connection with the ongoing reorganization and realignment of
     the Company which began in the third quarter of 1998. These charges, which
     were recorded in accordance with EITF issue 94-3, are primarily for
     headcount reductions and relate to employee severance and related benefits,
     and for rationalization of the Company's Australian facility.

5.   COMPREHENSIVE INCOME (LOSS)

     During the first six months of 1999 and 1998, total comprehensive income
     (loss) amounted to $10,139 and $(42,325), respectively.


                                       15
<PAGE>   16


                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

6.   GUARANTOR SUBSIDIARIES

     In connection with the merger of Holdings and Mercury, Thermadyne LLC and
     Thermadyne Capital, both wholly-owned subsidiaries of Holdings, issued $207
     million of Senior Subordinated Notes. Holdings received all of the net
     proceeds from the issuance of the Senior Subordinated Notes and Thermadyne
     LLC and Thermadyne Capital are jointly and severally liable for all
     payments under the Senior Subordinated Notes. Additionally, the Senior
     Subordinated Notes are fully and unconditionally (as well as jointly and
     severally) guaranteed on an unsecured senior subordinated basis by certain
     subsidiaries of the Company (the "Guarantor Subsidiaries"). Each of the
     Guarantor Subsidiaries is wholly-owned by Thermadyne LLC.

     The following condensed consolidating financial information of Thermadyne
     LLC includes the accounts of Thermadyne LLC, the combined accounts of the
     Guarantor Subsidiaries and the combined accounts of the non-guarantor
     subsidiaries for the periods indicated. Separate financial statements of
     each of the Guarantor Subsidiaries are not presented because management has
     determined that such information is not material in assessing the Guarantor
     Subsidiaries.

                                       16

<PAGE>   17

                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 1999

<TABLE>
<CAPTION>

                                                            THERMADYNE       TOTAL          TOTAL
                                                               LLC         GUARANTORS   NON-GUARANTORS  ELIMINATIONS      TOTAL
                                                            ---------      ----------   --------------  ------------    ---------
<S>                                                         <C>            <C>          <C>              <C>            <C>
ASSETS

Current Assets:
   Cash and cash equivalents                                $      --      $   1,649      $   5,433      $      --      $   7,082
   Restricted cash                                                 --             --         27,803        (27,803)            --
   Accounts receivable                                             --         13,215         92,141        (21,506)        83,850
   Inventories                                                     --         66,247         55,259             --        121,506
   Prepaid expenses and other                                      --          1,726          3,624           (209)         5,141
                                                            ---------      ---------      ---------      ---------      ---------
       Total current assets                                        --         82,837        184,260        (49,518)       217,579
   Property, plant and equipment, at cost, net                     --         45,833         53,858             --         99,691
   Deferred financing costs, net                               17,518             --            381             --         17,899
   Intangibles, at cost, net                                       --         14,012         29,776             --         43,788
   Deferred income taxes                                           --         29,352          1,041             --         30,393
   Investment in and advances to/from subsidiaries            225,662         11,368             --       (237,030)            --
   Other assets                                                    --          1,012          1,489             --          2,501
                                                            ---------      ---------      ---------      ---------      ---------
   Total assets                                             $ 243,180      $ 184,414      $ 270,805      $(286,548)     $ 411,851
                                                            =========      =========      =========      =========      =========


LIABILITIES AND SHAREHOLDER'S DEFICIT

Current Liabilities:
   Accounts payable                                         $      --      $  20,498      $  22,183      $      --      $  42,681
   Accrued and other liabilities                                   --         17,026          9,734             --         26,760
   Accrued interest                                             6,769              8             11             --          6,788
   Income taxes payable                                            --          6,562         (2,039)            --          4,523
   Current maturities of long-term obligations                  7,513            (26)         2,955             --         10,442
                                                            ---------      ---------      ---------      ---------      ---------
       Total current liabilities                               14,282         44,068         32,844             --         91,194
Long-term obligations, less current maturities                514,975         16,068         82,985        (50,000)       564,028
Other long-term liabilities                                        --         52,430         10,654             --         63,084
Shareholder's equity (deficit):
   Retained earnings (Accumulated deficit)                   (362,530)      (277,340)       (26,493)       303,833       (362,530)
   Accumulated other comprehensive loss                            --         (4,904)       (14,891)            --        (19,795)
                                                            ---------      ---------      ---------      ---------      ---------
       Total shareholder's equity (deficit)                  (362,530)      (282,244)       (41,384)       303,833       (382,325)
Net equity and advances to/from subsidiaries                   76,453        354,092        185,706       (540,381)        75,870
                                                            ---------      ---------      ---------      ---------      ---------
   Total liabilities and shareholder's equity (deficit)     $ 243,180      $ 184,414      $ 270,805      $(286,548)     $ 411,851
                                                            =========      =========      =========      =========      =========
</TABLE>


                                       17
<PAGE>   18

                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                            THERMADYNE       TOTAL          TOTAL
                                                               LLC         GUARANTORS   NON-GUARANTORS  ELIMINATIONS      TOTAL
                                                            ---------      ----------   --------------  ------------    ---------
<S>                                                         <C>            <C>          <C>              <C>            <C>
ASSETS

Current Assets:
   Cash and cash equivalents                                $      --      $  (1,051)     $   2,370      $      --      $   1,319
   Restricted cash                                                 --             --         26,646        (26,646)            --
   Accounts receivable                                             --         13,682         96,606        (22,383)        87,905
   Inventories                                                     --         68,742         53,991             --        122,733
   Prepaid expenses and other                                      --          1,259          6,325           (219)         7,365
                                                            ---------      ---------      ---------      ---------      ---------
       Total current assets                                        --         82,632        185,938        (49,248)       219,322
Property, plant and equipment, at cost, net                        --         48,023         56,974             --        104,997
Deferred financing costs, net                                  19,001             --            571             --         19,572
Intangibles, at cost, net                                          --         10,561         28,598             --         39,159
Deferred income taxes                                              --         26,470          2,665             --         29,135
Investment in and advances to/from subsidiaries               209,369          9,969             --       (219,338)            --
Other assets                                                       --            (55)         1,306             --          1,251
                                                            ---------      ---------      ---------      ---------      ---------
       Total assets                                         $ 228,370      $ 177,600      $ 276,052      $(268,586)     $ 413,436
                                                            =========      =========      =========      =========      =========

LIABILITIES AND SHAREHOLDER'S DEFICIT

Current Liabilities:
   Accounts payable                                         $      --      $  21,003      $  23,167      $      --      $  44,170
   Accrued and other liabilities                                   --         26,060         10,384             --         36,444
   Accrued interest                                               275              6            217             --            498
   Income taxes payable                                            --          7,927         (2,716)            --          5,211
   Current maturities of long-term obligations                  5,000             60          4,120             --          9,180
                                                            ---------      ---------      ---------      ---------      ---------
       Total current liabilities                                5,275         55,056         35,172             --         95,503
Long-term obligations, less current maturities                515,050         16,101         81,437        (50,000)       562,588
Other long-term liabilities                                        --         52,116         10,718             --         62,834
Shareholder's equity (deficit):
   Retained earnings (accumulated deficit)                   (368,408)      (295,702)       (16,201)       311,903       (368,408)
   Accumulated other comprehensive income (loss)                   --            224        (15,758)            --        (15,534)
                                                            ---------      ---------      ---------      ---------      ---------
       Total shareholder's equity (deficit)                  (368,408)      (295,478)       (31,959)       311,903       (383,942)
Net equity and advances to/from subsidiaries                   76,453        349,805        180,684       (530,489)        76,453
                                                            ---------      ---------      ---------      ---------      ---------

   Total liabilities and shareholders' equity (deficit)     $ 228,370      $ 177,600      $ 276,052      $(268,586)     $ 413,436
                                                            =========      =========      =========      =========      =========
</TABLE>


                                       18


<PAGE>   19

                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
                                                            THERMADYNE      TOTAL          TOTAL
                                                               LLC       GUARANTORS   NON-GUARANTORS    ELIMINATIONS     TOTAL
                                                            ---------    ----------   --------------    ------------   ---------
<S>                                                         <C>            <C>          <C>              <C>           <C>

Net sales                                                   $      --     $ 107,524      $  53,530      $ (27,589) (a) $ 133,465
Operating expenses:
     Cost of goods sold                                            --        68,470         44,253        (27,533) (a)    85,190
     Selling, general and administrative expenses                  --        16,939          8,405             --         25,344
     Amortization of intangibles                                   --           786            646             --          1,432
     Net periodic postretirement benefits                          --         1,250             --             --          1,250
     Special charges                                               --           535          1,000             --          1,535
                                                            ---------     ---------      ---------      ---------      ---------
Operating income (loss)                                            --        19,544           (774)           (56)        18,714
Other income (expense):
     Interest expense                                              --       (12,221)        (1,849)           708        (13,362)
     Amortization of deferred financing costs                      --          (743)           (61)            --           (804)
     Equity in net loss of subsidiaries                         2,021            --             --         (2,021)            --
     Other                                                         --         3,012           (251)        (1,875)           886
                                                            ---------     ---------      ---------      ---------      ---------
Income (loss) before income tax provision                       2,021         9,592         (2,935)        (3,244)         5,434
Income tax provision                                               --           577          2,836             --          3,413
                                                            ---------     ---------      ---------      ---------      ---------
Net income (loss)                                           $   2,021     $   9,015      $  (5,771)     $  (3,244)     $   2,021
                                                            =========     =========      =========      =========      =========
</TABLE>

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
                                                            THERMADYNE      TOTAL          TOTAL
                                                               LLC       GUARANTORS   NON-GUARANTORS    ELIMINATIONS      TOTAL
                                                            ---------    ----------   --------------    ------------    ---------
<S>                                                         <C>            <C>          <C>              <C>            <C>
Net sales                                                   $      --      $ 113,475      $  48,364     $  (26,130) (a) $ 135,709
Operating expenses:
     Cost of goods sold                                            --         71,204         39,315        (26,182) (a)    84,337
     Selling, general and administrative expenses                  --         17,772          7,538             --         25,310
     Amortization of intangibles                                   --            423            534             --            957
     Net periodic postretirement benefits                          --            450             --             --            450
     Special charges                                               --         44,217             --             --         44,217
                                                            ---------      ---------      ---------      ---------      ---------
Operating income (loss)                                            --        (20,591)           977             52        (19,562)
Other income (expense):
     Interest expense                                              --        (10,909)        (2,291)           906        (12,294)
     Amortization of deferred financing costs                      --           (458)           (51)            --           (509)
     Equity in net loss of subsidiaries                       (45,593)            --             --         45,593             --
     Other                                                         --          1,700         (1,537)        (1,303)        (1,140)
                                                            ---------      ---------      ---------      ---------      ---------
Income (loss) before income tax benefit and
  extraordinary item                                          (45,593)       (30,258)        (2,902)        45,248        (33,505)
     Income tax benefit                                            --         (2,700)          (349)            --         (3,049)
                                                            ---------      ---------      ---------      ---------      ---------
Income (loss) before extraordinary item                       (45,593)       (27,558)        (2,553)        45,248        (30,456)
Extraordinary item, net of tax                                     --        (15,137)            --             --        (15,137)
                                                            ---------      ---------      ---------      ---------      ---------
Net income (loss)                                           $ (45,593)     $ (42,695)     $  (2,553)     $  45,248      $ (45,593)
                                                            =========      =========      =========      =========      =========
</TABLE>

(a)  Reflects the elimination of intercompany sales among all of the Company's
     subsidiaries.


                                       19
<PAGE>   20


                               THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
                                                            THERMADYNE      TOTAL          TOTAL
                                                               LLC       GUARANTORS   NON-GUARANTORS   ELIMINATIONS      TOTAL
                                                            ---------    ----------   --------------   ------------   ---------
<S>                                                         <C>            <C>          <C>              <C>            <C>

Net sales                                                   $      --     $ 212,707      $ 100,857      $ (49,865) (a) $ 263,699
Operating expenses:
     Cost of goods sold                                            --       134,838         83,922        (49,935) (a)   168,825
     Selling, general and administrative expenses                  --        33,883         16,007             --         49,890
     Amortization of intangibles                                   --         1,284          1,185             --          2,469
     Net periodic postretirement benefits                          --         2,300             --             --          2,300
     Special charges                                               --         1,471          2,938             --          4,409
                                                            ---------     ---------      ---------      ---------      ---------
Operating income (loss)                                            --        38,931         (3,195)            70         35,806
Other income (expense):
     Interest expense                                              --       (24,168)        (4,267)         1,480        (26,955)
     Amortization of deferred financing costs                      --        (1,484)          (112)            --         (1,596)
     Equity in net loss of subsidiaries                         5,878            --             --         (5,878)            --
     Other                                                         --         5,390             30         (3,742)         1,678
                                                            ---------     ---------      ---------      ---------      ---------
Income (loss) before income tax provision                       5,878        18,669         (7,544)        (8,070)         8,933
Income tax provision                                               --           307          2,748             --          3,055
                                                            ---------     ---------      ---------      ---------      ---------
Net income (loss)                                           $   5,878     $  18,362      $ (10,292)     $  (8,070)     $   5,878
                                                            =========     =========      =========      =========      =========
</TABLE>

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
                                                            THERMADYNE      TOTAL          TOTAL
                                                               LLC       GUARANTORS   NON-GUARANTORS     ELIMINATIONS     TOTAL
                                                            ---------    ----------   --------------     ------------   ---------
<S>                                                         <C>            <C>          <C>              <C>            <C>
Net sales                                                   $      --      $ 224,986      $  96,189      $ (53,637) (a) $ 267,538
Operating expenses:
     Cost of goods sold                                            --        140,914         78,485        (53,278) (a)   166,121
     Selling, general and administrative expenses                  --         37,492         14,882             --         52,374
     Amortization of intangibles                                   --            783          1,074             --          1,857
     Net periodic postretirement benefits                          --          1,100             --             --          1,100
     Special charges                                               --         44,217             --             --         44,217
                                                            ---------      ---------      ---------      ---------      ---------
Operating income (loss)                                            --            480          1,748           (359)         1,869
Other income (expense):
     Interest expense                                              --        (20,443)        (4,667)         1,982        (23,128)
     Amortization of deferred financing costs                      --           (774)          (105)            --           (879)
     Equity in net loss of subsidiaries                       (39,784)            --             --         39,784             --
     Other                                                         --          2,049           (231)        (2,792)          (974)
                                                            ---------      ---------      ---------      ---------      ---------
Income (loss) before income tax provision
  and extraordinary item                                      (39,784)       (18,688)        (3,255)        38,615        (23,112)
Income tax provision                                               --          1,269            266             --          1,535
                                                            ---------      ---------      ---------      ---------      ---------
Income (loss) before extraordinary item                       (39,784)       (19,957)        (3,521)        38,615        (24,647)
Extraordinary item, net of tax                                     --        (15,137)            --             --        (15,137)
                                                            ---------      ---------      ---------      ---------      ---------
Net income (loss)                                           $ (39,784)     $ (35,094)     $  (3,521)     $  38,615      $ (39,784)
                                                            =========      =========      =========      =========      =========
</TABLE>

(a)  Reflects the elimination of intercompany sales among all of the Company's
     subsidiaries.


                                       20
<PAGE>   21

                              THERMADYNE MFG. LLC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
                                                              THERMADYNE      TOTAL          TOTAL
                                                                 LLC       GUARANTORS   NON-GUARANTORS  ELIMINATIONS    TOTAL
                                                              ----------   ----------   --------------  ------------   --------
<S>                                                         <C>            <C>          <C>              <C>            <C>
Net cash provided by (used in) operating activities            $ 12,372      $ 26,004      $ (2,565)     $ (8,070)     $ 27,741
Cash flows provided by (used in) investing activities:
     Capital expenditures, net                                       --        (2,720)       (2,462)           --        (5,182)
     Change in other assets                                          --        (1,831)          442            --        (1,389)
     Acquisitions, net of cash                                       --        (3,000)       (2,884)           --        (5,884)
                                                               --------      --------      --------      --------      --------
Net cash used in investing activities                                --        (7,551)       (4,904)           --       (12,455)
Cash flows provided by (used in) financing activities
     Changes in long-term receivables                                --          (276)          175            --          (101)
     Repayment of long-term obligations                            (575)         (119)       (1,850)           --        (2,544)
     Borrowing of long-term obligations                           3,013            --           343            --         3,356
     Change in accounts receivable securitization                    --        (1,140)           --            --        (1,140)
     Change in net equity and advances to/from
       subsidiaries                                             (14,810)       (7,283)       10,039         8,070        (3,984)
     Other                                                           --        (6,935)        1,825            --        (5,110)
                                                               --------      --------      --------      --------      --------
Net cash provided by (used in) financing activities             (12,372)      (15,753)       10,532         8,070        (9,523)
                                                               --------      --------      --------      --------      --------
Net increase in cash and cash equivalents                            --         2,700         3,063            --         5,763
Cash and cash equivalents at beginning of period                     --        (1,051)        2,370            --         1,319
                                                               --------      --------      --------      --------      --------
Cash and cash equivalents at end of period                     $     --      $  1,649      $  5,433      $     --      $  7,082
                                                               ========      ========      ========      ========      ========
</TABLE>

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
                                                          THERMADYNE      TOTAL          TOTAL
                                                             LLC        GUARANTORS   NON-GUARANTORS  ELIMINATIONS      TOTAL
                                                          ----------    ----------   --------------  ------------     --------
<S>                                                       <C>           <C>          <C>             <C>              <C>

Net cash provided by (used in) operating activities       $ (42,699)     $ (62,735)     $ (10,843)     $  38,615      $ (77,662)
Cash flows used in investing activities:
     Capital expenditures, net                                   --         (4,127)        (4,339)            --         (8,466)
     Change in other assets                                      --           (369)           (96)            --           (465)
     Acquisitions, net of cash                                   --           (640)        (3,014)            --         (3,654)
                                                          ---------      ---------      ---------      ---------      ---------
Net cash used in investing activities                            --         (5,136)        (7,449)            --        (12,585)
Cash flows provided by (used in) financing activities
     Changes in long-term receivables                            --             --            449             --            449
     Repayment of long-term obligations                    (390,002)            --             --             --       (390,002)
     Borrowing of long-term obligations                     576,893            130         18,409             --        595,432
     Change in accounts receivable securitization                --         (2,642)            --             --         (2,642)
     Financing fees                                         (20,054)            --             --             --        (20,054)
     Change in net equity and advances to/from
       subsidiaries                                        (124,138)        79,789         (4,339)       (38,615)       (87,303)
     Other                                                       --             --          3,724             --          3,724
                                                          ---------      ---------      ---------      ---------      ---------
Net cash provided by (used in) financing activities          42,699         77,277         18,243        (38,615)        99,604
                                                          ---------      ---------      ---------      ---------      ---------
Net increase (decrease) in cash and cash equivalents             --          9,406            (49)            --          9,357
Cash and cash equivalents at beginning of period                 --            308          1,173             --          1,481
                                                          ---------      ---------      ---------      ---------      ---------
Cash and cash equivalents at end of period                $      --      $   9,714      $   1,124      $      --      $  10,838
                                                          =========      =========      =========      =========      =========
</TABLE>

                                       21

<PAGE>   22

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

The following is a discussion and analysis of the condensed consolidated
financial statements of Holdings. Holdings conducts its operations through its
wholly-owned subsidiary Thermadyne LLC. The accompanying condensed consolidated
financial statements for Holdings and Thermadyne LLC are substantially the same
except for certain debt and equity securities issued by Holdings, and therefore,
a separate discussion of Thermadyne LLC is not presented.

Included in the following discussions are comparisons of Adjusted EBITDA which
is defined as operating income plus depreciation, amortization of goodwill,
amortization of intangibles, net periodic postretirement benefits expense and
special charges and is a key financial measure but should not be construed as an
alternative to operating income or cash flows from operating activities (as
determined in accordance with generally accepted accounting principles).
Adjusted EBITDA is also one of the financial measures by which the Company's
compliance with its covenants is calculated under its debt agreements. The
Company believes that Adjusted EBITDA is a useful supplement to net income
(loss) and other consolidated income statement data in understanding cash flows
generated from operations that are available for taxes, debt service and capital
expenditures. However, the Company's method of computation may or may not be
comparable to other similarly titled measures of other companies. In addition,
Adjusted EBITDA is not necessarily indicative of amounts that may be available
for discretionary uses and does not reflect any legal or contractual
restrictions on the Company's use of funds.

The statements in this Quarterly Report on Form 10-Q that relate to future
plans, events or performance are forward-looking statements. Actual results
could differ materially due to a variety of factors and the other risks
described in this Quarterly Report and the other documents the Company files
from time to time with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date hereof or
that reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

Three Months ended June 30, 1999 compared to Three Months ended June 30, 1998

Net sales were $133.5 million for the three months ended June 30, 1999 compared
to $135.7 million for the three months ended June 30, 1998. Domestic sales
decreased 1.9% in a comparison of the quarters ended June 30, 1999 and 1998 due
to general weakness in the U.S. industrial economy. International sales
decreased 1.2% (13.3% excluding acquisitions) for the quarter ended June 30,
1999 compared to the same period of the prior year. Australia/Asia sales are
down 7.4% in the quarter, although Asia is showing signs

                                       22

<PAGE>   23

of recovery and is up slightly over the same period of the prior year. Weak
economies in Europe have resulted in a decline of 17.7%, excluding acquisitions.
Latin America sales decreased 17.2% in the quarter, excluding acquisitions,
while experiencing both soft economic conditions and weak currencies.

Cost of goods sold as a percentage of sales was 63.8% for the three months ended
June 30, 1999 compared to 62.1% for the three months ended June 30, 1998.
Throughout 1999, the Company has been focused on reducing working capital and
especially inventory levels. This has resulted in less volume being run through
the factories and a lower absorption of fixed overhead costs on a per unit
basis. An unfavorable sales mix, with lower margin equipment sales replacing
some higher margin parts and consumables business, has also negatively affected
margins. In addition, recent acquisitions have diluted gross margins as they
typically do not carry an average gross margin as high as that of the Company's
existing business.

Selling, general and administrative expenses are essentially flat at $25.3
million for the three month periods ended June 30, 1999 and 1998. Expenses for
the three months ended June 30, 1999, include approximately $1.0 million related
to acquisitions. As a percentage of sales, selling and administrative expenses
were 19.0% for the three months ended June 30, 1999 and 18.7% for the three
months ended June 30, 1998. The increase in this percentage is the result of the
overall sales decline as certain expenses are fixed and do not vary with sales.

Special charges of $1.5 million recorded in the three month period ended June
30, 1999 relate primarily to factory rationalization costs in Australia and to
ongoing headcount reductions. Special charges of $44.2 million in the three
month period ended June 30, 1998 are the result of the merger of the Company in
May 1998.

Interest expense was $17.6 million in the quarter ended June 30, 1999 compared
to $13.9 million in the quarter ended June 30, 1998. This increase of 26.4%, or
$3.7 million, is due to the higher debt levels resulting from the merger of the
Company in May 1998.

An income tax provision of $3.4 million was reported in the second quarter of
1999 on pre-tax income of $1.2 million. An income tax benefit of $3.0 million
was recorded on a pre-tax loss of $35.1 million in the second quarter of 1998.

Adjusted EBITDA was $28.3 million for the three months ended June 30, 1999, or
21.2% of sales. This compares to Adjusted EBITDA for the three months ended June
30, 1998 of $29.6 million, or 21.8% of sales.


                                       23
<PAGE>   24


Six Months ended June 30, 1999 compared to Six Months ended June 30, 1998

Net sales for the six months ended June 30, 1999 and 1998 were $263.7 million
and $267.5 million, respectively. Sales in the U.S. decreased 0.8% in a
comparison of the two periods while international sales decreased 2.5% (11.6%
excluding acquisitions). The Australia/Asia region has declined 5.0%, and when
excluding the sales of businesses acquired since the beginning of 1998 Latin
America has decreased 15.3% and Europe is down 12.2%. Overall weak demand in
the industrial sectors of these economies is the primary reason for the
decrease in sales. The sales decline in Latin America was also affected by that
region's weakening currencies.

Cost of goods sold as a percentage of sales was 64.0% and 62.1% for the six
months ended June 30, 1999 and 1998, respectively. The decrease in gross margins
recently experienced by the Company is the result of three factors. First of
all, the Company is focused on reducing its working capital. The related efforts
to reduce inventory have resulted in less volume through the factories and a
lower per unit absorption of fixed factory overhead costs. Secondly, businesses
acquired over the past twelve months have also diluted gross margins.
Acquisitions seldom support the same gross margins as the Company's established
domestic facilities. Lastly, a less favorable sales mix has negatively affected
margins as decreased demand in relatively higher margin consumable business has
been replaced by sales of lower margin equipment.

Selling, general and administrative expenses were $49.9 million for the first
six months of 1999 compared to $52.4 million for the first six months of 1998.
As a percentage of sales, selling, general and administrative expenses were
18.9% and 19.6% for the first half of 1999 and 1998, respectively. The decreases
in dollars and as a percent of sales are the result of the Company's efforts
with ongoing cost reduction initiatives. These decreases have been partially
offset by the additional selling, general and administrative expenses of
business recently acquired, which amounts to approximately $1.2 million.

Special charges of $4.4 million were recorded in the first six months of 1999.
These charges relate primarily to ongoing headcount reductions and site
rationalization in Australia. The merger in May of 1998 resulted in special
charges of $44.2 million in the results reported for the six months ended June
30, 1998.

Interest expense rose $10.6 million, or 42.8%, to $35.3 million for the six
months ended June 30, 1999 from $24.7 million for the six months ended June 30,
1998. Debt levels increased significantly as a result of the merger in May 1998
and interest expense has increased accordingly.

An income tax provision of $3.1 million was recorded on pre-tax income of $0.5
million in the six months ended June 30, 1999. Income tax expense of $1.5
million was recorded for the six months ended June 30, 1998 on a pre-tax loss of
$24.7 million.

                                       24
<PAGE>   25

Adjusted EBITDA was $54.4 million for the six months ended June 30, 1999, or
20.6% of sales. This compares to $56.2 million in Adjusted EBITDA for the six
months ended June 30, 1998, which is 21.0% of sales.


LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Cash Flows

Operating activities provided cash of $23.9 million in the first six months of
1999, compared to using cash of $65.2 million in the first six months of 1998.
Earnings (adjusted for non-cash expenses) were $22.1 million the first six
months of 1999 compared to a loss of $24.5 million in 1998, an increase of $46.6
million. A net loss of $41.4 million was reported through June 30, 1998 due to
expenses recorded in connection with the merger of the Company in May 1998.
Operating assets and liabilities provided a net increase in cash of $42.4
million in the first six months of 1999 compared to the first six months of
1998. The Company is focused on reducing working capital which is evident by the
following net increases in cash flow when compared to 1998: accounts receivable
- $17.9 million; inventory - $25.4 million; prepaid expenses - $3.6 million;
accounts payable - $3.6 million; and, accrued interest - $6.5 million. These net
increases were partially offset by an increase in the use of cash by accrued
liabilities of $6.8 million and income taxes payable of $7.4 million. Cash used
in investing activities was $12.5 million and $12.6 million for the six months
ended June 30, 1999 and 1998, respectively. The Company used $3.3 million less
for capital expenditures in the first six months of 1999 compared to the same
period of 1998. This was mostly offset by an increase in the use of cash of $0.9
million for other assets and $2.2 million for acquisitions in a comparison of
the same periods. Financing activities used $5.6 million in cash in the first
half of 1999 while providing cash of $87.1 million in the first half of 1998.
Debt and equity securities issued in connection with the merger of the Company
in May of 1998, partially offset by cash for related financing fees and
repurchase of common stock, are the primary reasons for this change in cash
flow.


Liquidity

The Company's principal sources of liquidity are cash flow from operations and
borrowings under the Company's existing bank facility. The Company's principal
uses of cash will be debt service requirements, capital expenditures,
acquisitions and working capital. The Company expects that ongoing requirements
for debt service, capital expenditures and working capital will be funded from
operating cash flow and borrowings under its existing bank facility. In
connection with future acquisitions, the Company may require additional funding
which may be provided in the form of additional debt, equity financing or a
combination thereof. There can be no assurance that any such additional
financing will be available to the Company on acceptable terms.


                                       25
<PAGE>   26

The Company anticipates that its operating cash flow, together with borrowings
under its existing bank facility, will be sufficient to meet its anticipated
future operating expenses, capital expenditures and to service its debt
requirements as they become due. However, the Company's ability to make
scheduled payments of principal of, to pay interest on or to refinance its
indebtedness and to satisfy its other debt obligations will depend upon its
future operating performance, which will be affected by general economic,
financial, competitive, legislative, regulatory, business and other factors
beyond its control.

Year 2000 Issue

The "Year 2000 Issue" is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

The operating subsidiaries of the Company have been assembled through a series
of acquisitions beginning in 1987. As such, the Company consists of over twenty
locations operating on a variety of business computer systems. In late 1997 the
Company decided to standardize and upgrade all business computer systems at all
but three locations, and as part of this standardization, address the Year 2000
Issue. The excluded locations are "Year 2000 Ready" and will convert to the
standardized system in early 2000.

In addressing the Year 2000 Issue, the Company is currently evaluating its
computer-based systems, facilities and products and identifying all steps
necessary to determine they are all Year 2000 Ready. The Company is employing a
combination of internal resources and outside consultants to address this issue.
The Company's information technology department is responsible for its business
computers, PC's and related software. General managers of the Company's
manufacturing facilities oversee the Year 2000 Issue at their respective plants
including all engineering computer systems, PC's and related software,
manufacturing equipment and facilities' systems, such as security, climate
control and telecommunication systems. Detailed checklists have been developed
for all of the aforementioned areas which note the review date, actions required
and completion date. The Company has identified systems which are not Year 2000
Ready, and is in the process of upgrading or replacing those systems. The
Company is currently on schedule to complete these upgrades and replacements by
the year 2000. The Company has completed its assessment of its products and has
identified no Year 2000 Issues. In addition, the Company has contacted its
vendors to determine whether they are Year 2000 Ready, and is in the process of
accumulating those responses. Initial responses indicate most of the Company's
vendors are addressing their Year 2000 Issues and that all critical vendors are
either Year 2000 Ready or will be in the near future. As a precaution,
alternative vendors have been identified.

While the Year 2000 Issue is a top priority of the Company and a significant
amount of resources have been allocated to this issue, there can be no assurance
that all of its systems and equipment or its vendors will be

                                       26
<PAGE>   27

Year 2000 Ready. However, at this time, the Company does not believe that its or
its vendors Year 2000 related issues will have a material adverse effect on the
Company's business. In the unlikely event of a systems failure at one of the
Company's facilities, any one of a number of other facilities' systems could be
utilized as a backup system.

The total cost to standardize and upgrade all business computer systems is
currently estimated to be $6.5 million. Through June 30, 1999, the Company has
spent approximately $6.0 million of this total. Given the nature of this project
and the fact that it addresses many issues in addition to preparing the Company
for the Year 2000, it is impractical to attempt to estimate the total costs
specifically related to the Year 2000 Issue. In compliance with generally
accepted accounting principles, costs incurred by the Company for hardware,
software and consultants are capitalized, while costs incurred in training
employees are expensed as incurred. As the process to become Year 2000 Ready
continues, additional costs may be identified that have not yet been considered.
Consequently, the full cost of all upgrades, replacements and modifications that
may be required to become Year 2000 Ready has not yet been determined.

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the second quarter of 1999. Refer to the
Company's discussion in its Annual Report on Form 10-K for the year ended
December 31, 1998.


                                       27
<PAGE>   28

PART II.  OTHER INFORMATION

Item 4. Submission of matters to a vote of security holders.

At the annual meeting of shareholders of the registrant held on April 27, 1999,
there were 3,590,326 shares of common stock of the Company issued and
outstanding and entitled to be voted, if represented. The following matter was
presented to the meeting for a vote and the result of such voting is as follows:

         Election of Directors.
<TABLE>
<CAPTION>
                                            FOR       WITHHELD
                                          ---------   --------
<S>                                       <C>            <C>
         Randall E. Curran                3,418,124      41
         William F. Dawson, Jr.           3,418,124      41
         John F. Fort III                 3,418,124      41
         Peter T. Grauer                  3,418,124      41
         Harold A. Poling                 3,418,124      41
         Lawrence M.v.D. Schloss          3,418,124      41
         James H. Tate                    3,418,124      41
</TABLE>


Item 6. Exhibits and Reports on Form 8-K

        a)      Exhibits

                27  - Financial Data Schedule

        b)      Reports on Form 8-K

                None

                                       28

<PAGE>   29

                                   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.


                                   THERMADYNE HOLDINGS CORPORATION


                                   By:          /s/ RANDALL E. CURRAN
                                        ---------------------------------------
                                                    Randall E. Curran
                                           Chairman of the Board, President and
                                                  Chief Executive Officer
                                              (Principal Executive Officer)




                                   By:           /s/ JAMES H. TATE
                                       ---------------------------------------
                                                     James H. Tate
                                               Senior Vice President and
                                                 Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


Date:  August 13, 1999

                                       29
<PAGE>   30

                                   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.


                                   THERMADYNE MFG. LLC


                                   By:          /s/ RANDALL E. CURRAN
                                        ---------------------------------------
                                                    Randall E. Curran
                                           Chairman of the Board, President and
                                                  Chief Executive Officer
                                              (Principal Executive Officer)




                                   By:           /s/ JAMES H. TATE
                                       ---------------------------------------
                                                     James H. Tate
                                               Senior Vice President and
                                                 Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


Date:  August 13, 1999


                                       30
<PAGE>   31

                                   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.

                                   THERMADYNE CAPITAL CORP.


                                   By:          /s/ RANDALL E. CURRAN
                                        ---------------------------------------
                                                    Randall E. Curran
                                           Chairman of the Board, President and
                                                  Chief Executive Officer
                                              (Principal Executive Officer)




                                   By:           /s/ JAMES H. TATE
                                       ---------------------------------------
                                                     James H. Tate
                                               Senior Vice President and
                                                 Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


Date:  August 13, 1999

                                       31

<PAGE>   32

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER      DESCRIPTION
--------------      -----------
<S>                 <C>
     27             Financial Data Schedule
</TABLE>