<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 March 31, 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)

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

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

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

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

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

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

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

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 May 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.................................13-20

              Item 2.    Management's Discussion and Analysis
                         of Financial Condition and Results of Operations.................................... 21-24


              Item 3.    Quantitative and Qualitative Disclosures About Market Risk..............................24

         PART II - OTHER INFORMATION

              Item 6.    Exhibits and Reports on Form 8-K .......................................................25


         SIGNATURES ..........................................................................................26-28
</TABLE>



<PAGE>   3


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

<TABLE>
<CAPTION>
                                                                           March 31,         December 31,
                                                                              1999              1998
                                                                           ----------         ----------
                                                                           (Unaudited)

<S>                                                                        <C>                <C>       
ASSETS

 Current Assets:
   Cash and cash equivalents                                               $    5,672         $    1,319
   Accounts receivable, less allowance for doubtful
     accounts of $2,901 and $2,852, respectively                               81,391             87,905
   Inventories                                                                121,159            122,733
   Prepaid expenses and other                                                   5,980              7,365
                                                                           ----------         ----------
        Total current assets                                                  214,202            219,322
 Property, plant and equipment, at cost, net                                   99,118            104,997
 Deferred financing costs, net                                                 22,529             23,118
 Intangibles, at cost, net                                                     38,954             39,159
 Deferred income taxes                                                         32,811             32,402
 Other assets                                                                   3,648              1,251
                                                                           ----------         ----------
        Total assets                                                       $  411,262         $  420,249
                                                                           ==========         ==========

 LIABILITIES AND SHAREHOLDERS' DEFICIT

 Current Liabilities:
   Accounts payable                                                        $   42,093         $   44,170
   Accrued and other liabilities                                               25,242             36,444
   Accrued interest                                                             9,236              3,154
   Income taxes payable                                                         4,409              5,211
   Current maturities of long-term obligations                                 10,303              9,180
                                                                           ----------         ----------
      Total current liabilities                                                91,283             98,159
 Long-term obligations, less current maturities                               707,664            701,529
 Other long-term liabilities                                                   61,673             62,834
 Redeemable preferred stock (paid in kind), $0.01 par value,
   15,000,000 shares authorized and 2,000,000 shares outstanding               55,810             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
     March 31, 1999 and December 31, 1998, respectively                            36                 32
   Additional paid-in capital                                                (118,312)          (116,551)
   Accumulated deficit                                                       (360,856)          (360,520)
   Management loans                                                            (3,805)            (3,753)
   Accumulated other comprehensive loss                                       (22,231)           (15,534)
                                                                           ----------         ----------
       Total shareholders' deficit                                           (505,168)          (496,326)
                                                                           ----------         ----------
       Total liabilities and shareholders' deficit                         $  411,262         $  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
                                                                           Ended              Ended
                                                                       March 31, 1999     March 31, 1998
                                                                       --------------     --------------

<S>                                                                      <C>                <C>       
 Net sales                                                               $  130,234         $  131,829
 Operating expenses:
 Cost of goods sold                                                          83,635             81,784
   Selling, general and administrative expenses                              24,546             27,064
   Amortization of intangibles                                                1,037                900
   Net periodic postretirement benefits                                       1,050                650
   Special charges                                                            2,874                 --
                                                                         ----------         ----------
   Operating income                                                          17,092             21,431
 Other expense:
   Interest expense                                                         (17,742)           (10,834)
   Amortization of deferred financing costs                                    (888)              (370)
   Other, net                                                                   844                166
                                                                         ----------         ----------
 Income (loss) before income taxes                                             (694)            10,393
   Income tax provision (benefit)                                              (358)             4,584
                                                                         ----------         ----------
 Net income (loss)                                                             (336)             5,809
 Preferred stock dividends (paid in kind)                                     1,757                 --
                                                                         ----------         ----------
 Net income (loss) applicable to common shares                           $   (2,093)        $    5,809
                                                                         ==========         ==========

 Net income (loss) per share amounts applicable to common shares:
   Basic                                                                 $    (0.60)        $     0.52
   Diluted                                                               $    (0.60)        $     0.50
</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>
                                                                    Three Months       Three Months
                                                                       Ended              Ended
                                                                   March 31, 1999     March 31, 1998
                                                                   --------------     --------------

<S>                                                                  <C>                <C>       
 Cash flows provided by (used in) operating activities:
   Net income (loss)                                                 $     (336)        $    5,809
   Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
        Net periodic postretirement benefits                              1,050                650
        Depreciation                                                      4,109              3,556
        Amortization of intangibles                                       1,037                900
        Amortization of deferred financing costs                            888                370
        Deferred income taxes                                              (333)                --
        Non-cash interest expense                                         3,153                 --
 Changes in operating assets and liabilities:
        Accounts receivable                                               3,589             (6,179)
        Inventories                                                         422            (13,502)
        Prepaid expenses and other                                          952                (52)
        Accounts payable                                                 (1,179)            (5,347)
        Accrued and other liabilities                                   (11,060)            (6,246)
        Accrued interest                                                  6,095              7,370
        Income taxes payable                                               (764)             5,098
        Other long-term liabilities                                      (1,164)            (1,562)
                                                                     ----------         ----------
        Total adjustments                                                 6,795            (14,944)
                                                                     ----------         ----------
          Net cash provided by (used in) operating activities             6,459             (9,135)
                                                                     ----------         ----------
 Cash flows used in investing activities:
        Capital expenditures, net                                        (2,183)            (3,756)
        Change in other assets                                             (478)              (349)
        Acquisitions, net of cash                                        (2,250)              (640)
                                                                     ----------         ----------
          Net cash used in investing activities                          (4,911)            (4,745)
                                                                     ----------         ----------
 Cash flows provided by (used in) financing activities:
        Change in long-term receivables                                      21                263
        Repayment of long-term obligations                               (1,144)           (10,592)
        Borrowing of long-term obligations                                5,562             22,370
        Issuance of common stock                                              4                335
        Change in accounts receivable securitization                      2,288                376
        Financing fees                                                     (282)                --
        Other                                                            (3,644)              (180)
                                                                     ----------         ----------
          Net cash provided by financing activities                       2,805             12,572
                                                                     ----------         ----------
 Net increase (decrease) in cash and cash equivalents                     4,353             (1,308)
 Cash and cash equivalents at beginning of period                         1,319              1,481
                                                                     ----------         ----------
 Cash and cash equivalents at end of period                          $    5,672         $      173
                                                                     ==========         ==========
</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 month
period ended March 31, 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 (refunded) were as follows:

<TABLE>
<CAPTION>
                Three Months     Three Months
                   Ended            Ended
               March 31, 1999   March 31, 1998
               --------------   --------------

<S>              <C>             <C>     
 Interest        $  8,507        $  3,538
 Taxes                105            (624)
</TABLE>

                                       6

<PAGE>   7


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

EARNINGS (LOSS) PER SHARE

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

<TABLE>
<CAPTION>
                                                                  Three Months          Three Months
                                                                     Ended                 Ended
                                                                 March 31, 1999        March 31, 1998
                                                                 --------------        --------------

<S>                                                              <C>                   <C>          
 Net income (loss) per share applicable to common shares:
      Basic                                                      $       (0.60)        $        0.52
      Diluted                                                    $       (0.60)        $        0.50

 Weighted average shares - basic earnings per share                  3,496,079            11,208,536
 Effect of dilutive securities:
      Employee stock options                                                --               328,064
                                                                 -------------         -------------
 Weighted average shares - diluted earnings per share                3,496,079            11,536,600
                                                                 =============         =============
</TABLE>



2.   INVENTORIES

     The composition of inventories at March 31, 1999 was as follows:

<TABLE>
<S>                                                    <C>        
                   Raw materials                       $    27,275
                   Work-in-process                          28,011
                   Finished goods                           66,607
                   LIFO Reserve                               (734)
                                                       -----------
                   Total                               $   121,159
                                                       ===========
</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>       
         March 31, 1999
         --------------
         Revenue from external customers          $  87,776    $  13,303    $  20,233     $  8,922    $    --  $  130,234
         Intersegment revenues                        8,973        3,493        1,094           --    (13,560)         --
         Operating income (loss)                     21,527          746         (631)        (599)    (3,951)     17,092

         March 31, 1998
         --------------
         Revenue from external customers          $  90,125    $  13,246    $  21,078     $  7,380    $    --  $  131,829
         Intersegment revenues                       10,992        1,199          517           --    (12,708)         --
         Operating income (loss)                     24,086          951         (303)         119     (3,422)     21,431
</TABLE>

                                       8

<PAGE>   9


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

4.   REORGANIZATION AND REALIGNMENT

          In the first quarter of 1999, special charges of $2.9 million were 
     recorded in connection with the ongoing reorganization and realignment of
     the Company which began in the third quarter of 1998. These first quarter
     charges, which were recorded in accordance with EITF issue 94-3, are
     primarily for headcount reductions and relate to employee severance and
     related benefits. Additional charges are expected as the Company continues
     its reorganization and realignment including the previously announced
     closure of one manufacturing facility and its relocation to an existing
     facility.

5.   COMPREHENSIVE INCOME (LOSS)

          During the first three months of 1999 and 1998, total comprehensive 
     income (loss) amounted to $(7,033) and $5,735, respectively.

                                       9

<PAGE>   10


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


<TABLE>
<CAPTION>
                                                                    March 31,          December 31,
                                                                       1999               1998
                                                                    ----------         ----------
                                                                    (Unaudited)

<S>                                                                 <C>                <C>       
         ASSETS

          Current Assets:
            Cash and cash equivalents                               $    5,672         $    1,319
            Accounts receivable, less allowance for doubtful
              accounts of $2,901 and $2,852, respectively               81,391             87,905
            Inventories                                                121,159            122,733
            Prepaid expenses and other                                   5,980              7,365
                                                                    ----------         ----------
                 Total current assets                                  214,202            219,322
          Property, plant and equipment, at cost, net                   99,118            104,997
          Deferred financing costs, net                                 19,079             19,572
          Intangibles, at cost, net                                     38,954             39,159
          Deferred income taxes                                         29,544             29,135
          Other assets                                                   3,648              1,251
                                                                    ----------         ----------
                 Total assets                                       $  404,545         $  413,436
                                                                    ==========         ==========

          LIABILITIES AND SHAREHOLDER'S DEFICIT

          Current Liabilities:
            Accounts payable                                        $   42,093         $   44,170
            Accrued and other liabilities                               25,242             36,444
            Accrued interest                                             7,576                498
            Income taxes payable                                         4,409              5,211
            Current maturities of long-term obligations                 10,303              9,180
                                                                    ----------         ----------
               Total current liabilities                                89,623             95,503
          Long-term obligations, less current maturities               565,570            562,588
          Other long-term liabilities                                   61,673             62,834
          Shareholder's deficit:
            Accumulated deficit                                       (364,551)          (368,408)
            Accumulated other comprehensive loss                       (22,231)           (15,534)
                                                                    ----------         ----------
               Total shareholder's deficit                            (386,782)          (383,942)
          Net equity and advances to / from parent                      74,461             76,453
                                                                    ----------         ----------
          Total liabilities and shareholder's deficit               $  404,545         $  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
                                                                  Ended              Ended
                                                               March 31, 1999    March 31, 1998
                                                               --------------    --------------

<S>                                                             <C>                <C>       
          Net sales                                             $  130,234         $  131,829
          Operating expenses:
            Cost of goods sold                                      83,635             81,784
            Selling, general and administrative expenses            24,546             27,064
            Amortization of intangibles                              1,037                900
            Net periodic postretirement benefits                     1,050                650
            Special changes                                          2,874                 --
                                                                ----------         ----------
          Operating income                                          17,092             21,431
            Other expense:
            Interest expense                                       (13,593)           (10,834)
            Amortization of deferred financing costs                  (792)              (370)
            Other, net                                                 792                166
                                                                ----------         ----------
          Net income before income taxes                             3,499             10,393
          Income tax provision (benefit)                              (358)             4,584
                                                                ----------         ----------
          Net income                                            $    3,857         $    5,809
                                                                ==========         ==========
 </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>
                                                                             Three Months       Three Months
                                                                                Ended              Ended
                                                                            March 31, 1999     March 31, 1998
                                                                            --------------     --------------

<S>                                                                           <C>                <C>       
          Cash flows provided by (used in) operating activities:
            Net income                                                        $    3,857         $    5,809
            Adjustments to reconcile net income to
              net cash provided by operating activities:
                 Net periodic postretirement benefits                              1,050                650
                 Depreciation                                                      4,109              3,556
                 Amortization of intangibles                                       1,037                900
                 Amortization of deferred financing costs                            792                370
                 Deferred income taxes                                              (333)                --
          Changes in operating assets and liabilities:
                 Accounts receivable                                               3,589             (6,179)
                 Inventories                                                         422            (13,502)
                 Prepaid expenses and other                                          952                (52)
                 Accounts payable                                                 (1,179)            (5,347)
                 Accrued and other liabilities                                   (11,060)            (6,246)
                 Accrued interest                                                  7,091              7,370
                 Income taxes payable                                               (764)             5,098
                 Other long-term liabilities                                      (1,164)            (1,562)
                                                                              ----------         ----------
                 Total adjustments                                                 4,542            (14,944)
                                                                              ----------         ----------
                   Net cash provided by (used in) operating activities             8,399             (9,135)
                                                                              ----------         ----------
          Cash flows used in investing activities:
                 Capital expenditures, net                                        (2,183)            (3,756)
                 Change in other assets                                             (478)              (349)
                 Acquisitions, net of cash                                        (2,250)              (640)
                                                                              ----------         ----------
                   Net cash used in investing activities                          (4,911)            (4,745)
                                                                              ----------         ----------
          Cash flows provided by (used in) financing activities:
                 Change in long-term receivables                                      21                263
                 Repayment of long-term obligations                               (1,144)           (10,592)
                 Borrowing of long-term obligations                                5,562             22,370
                 Issuance of common stock                                             --                335
                 Change in accounts receivable securitization                      2,288                376
                 Financing fees                                                     (282)                --
                 Other                                                            (5,580)              (180)
                                                                              ----------         ----------
                   Net cash provided by financing activities                         865             12,572
                                                                              ----------         ----------
          Net increase (decrease) in cash and cash equivalents                     4,353             (1,308)
          Cash and cash equivalents at beginning of period                         1,319              1,481
                                                                              ----------         ----------
          Cash and cash equivalents at end of period                          $    5,672         $      173
                                                                              ==========         ==========
 </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-month period ended March 31, 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 (refunded) were as follows:

<TABLE>
<CAPTION>
                                     Three Months                Three Months
                                        Ended                       Ended
                                    March 31, 1999              March 31, 1998
                                    --------------              --------------

<S>                                    <C>                        <C>      
         Interest                      $   8,507                  $   3,538
         Taxes                               105                       (624)
</TABLE>

 2.  INVENTORIES

     The composition of inventories at March 31, 1999 was as follows:

<TABLE>
<S>                                            <C>        
              Raw materials                    $    27,275
              Work-in-process                       28,011
              Finished goods                        66,607
              LIFO Reserve                            (734)
                                                ----------
                            Total               $  121,159
                                                ==========
</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>       
March 31, 1999
--------------
Revenue from external customers             $  87,776    $  13,303     $  20,233    $  8,922  $      --    $  130,234
Intersegment revenues                           8,973        3,493         1,094          --    (13,560)           --
Operating income (loss)                        21,527          746          (631)       (599)    (3,951)       17,092

March 31, 1998
--------------
Revenue from external customers             $  90,125    $  13,246     $  21,078    $  7,380  $      --    $  131,829
Intersegment revenues                          10,992        1,199           517          --    (12,708)           --
Operating income (loss)                        24,086          951          (303)        119     (3,422)       21,431
</TABLE>


4.   REORGANIZATION AND REALIGNMENT

         In the first quarter of 1999, special charges of $2.9 million were
     recorded in connection with the ongoing reorganization and realignment of
     the Company which began in the third quarter of 1998. These first quarter
     charges, which were recorded in accordance with EITF issue 94-3, are
     primarily for headcount reductions and relate to employee severance and
     related benefits. Additional charges are expected as the Company continues
     its reorganization and realignment including the previously announced
     closure of one manufacturing facility and its relocation to an existing
     facility.

5.   COMPREHENSIVE INCOME (LOSS)

         During the first three months of 1999 and 1998, total comprehensive
     income (loss) amounted to $(2,840) and $5,735, 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
MARCH 31, 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                             $       --    $    1,709      $    3,963      $       --    $    5,672  
    Restricted cash                                               --            --          24,586         (24,586)           --  
    Accounts receivable                                           --        14,209          92,994         (25,812)       81,391  
    Inventories                                                   --        67,181          53,978              --       121,159  
    Prepaid expenses and other                                    --         2,164           4,017            (201)        5,980  
    Net assets of discontinued operations                         --            --              --              --            --  
                                                          ----------    ----------      ----------      ----------    ----------  
        Total current assets                                      --        85,263         179,538         (50,599)      214,202  
 Property, plant and equipment, at cost, net                      --        47,027          52,091              --        99,118  
 Deferred financing costs, net                                18,260            --             819              --        19,079  
 Intangibles, at cost, net                                        --        11,419          27,535              --        38,954  
 Deferred income taxes                                            --        26,470           3,074              --        29,544  
 Investment in and advances to/from subsidiaries             223,594        10,630              --        (234,224)           --  
 Other assets                                                     --           125           3,523              --         3,648  
                                                          ----------    ----------      ----------      ----------    ----------  
        Total assets                                      $  241,854    $  180,934      $  266,580      $ (284,823)   $  404,545  
                                                          ==========    ==========      ==========      ==========    ==========  
                                                                                                                                  
 LIABILITIES AND SHAREHOLDER'S DEFICIT                                                                                            
                                                                                                                                  
 Current Liabilities:                                                                                                             
    Accounts payable                                      $       --    $   20,439      $   21,654      $       --    $   42,093  
    Accrued and other liabilities                                 --        17,489           7,753              --        25,242  
    Accrued interest                                           7,369             7             200              --         7,576  
    Income taxes payable                                          --         6,942          (2,533)             --         4,409  
    Deferred income taxes                                         --            --              --              --            --  
    Current maturities of long-term obligations                6,250           (26)          4,079              --        10,303  
                                                          ----------    ----------      ----------      ----------    ----------  
        Total current liabilities                             13,619        44,851          31,153              --        89,623  
 Long-term obligations, less current maturities              518,325        16,136          81,109         (50,000)      565,570  
 Other long-term liabilities                                      --        50,997          10,676              --        61,673  
 Shareholder's equity (deficit):                                                                                                  
    Retained earnings (Accumulated deficit)                 (364,551)     (286,355)        (20,722)        307,077      (364,551) 
    Accumulated other comprehensive income (loss)                 --        (1,636)        (20,595)             --       (22,231) 
                                                          ----------    ----------      ----------      ----------    ----------  
        Total shareholder's equity (deficit)                (364,551)     (287,991)        (41,317)        307,077      (386,782) 
 Net equity and advances to/from subsidiaries                 74,461       356,941         184,959        (541,900)       74,461  
                                                          ----------    ----------      ----------      ----------    ----------  
    Total liabilities and shareholder's equity (deficit)  $  241,854    $  180,934      $  266,580      $ (284,823)   $  404,545  
                                                          ==========    ==========      ==========      ==========    ==========  
 </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 MARCH 31, 1999


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

<S>                                                  <C>             <C>              <C>              <C>               <C>       
 Net sales                                           $       --      $  105,183       $   47,327       $  (22,276)(a)    $  130,234
 Operating expenses:
      Cost of goods sold                                     --          66,368           39,669          (22,402)(a)        83,635
      Selling, general and administrative expenses           --          16,944            7,602               --            24,546
      Amortization of intangibles                            --             498              539               --             1,037
      Net periodic postretirement benefits                   --           1,050               --               --             1,050
      Special charges                                        --             936            1,938               --             2,874
                                                     ----------      ----------       ----------       ----------        ----------
 Operating income (loss)                                     --          19,387           (2,421)             126            17,092
 Other income (expense):
      Interest expense                                       --         (11,947)          (2,418)             772           (13,593)
      Amortization of deferred financing costs               --            (741)             (51)              --              (792)
      Equity in net loss of subsidiaries                  3,857              --               --           (3,857)               --
      Other                                                  --           2,378              281           (1,867)              792
                                                     ----------      ----------       ----------       ----------        ----------
 Income (loss) from continuing operations
   before income tax provision                            3,857           9,077           (4,609)          (4,826)            3,499
 Income tax provision (benefit)                              --            (270)             (88)              --              (358)
                                                     ----------      ----------       ----------       ----------        ----------
 Net income (loss)                                   $    3,857      $    9,347       $   (4,521)      $   (4,826)       $    3,857
                                                     ==========      ==========       ==========       ==========        ==========
</TABLE>


CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998


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

<S>                                                   <C>             <C>              <C>             <C>               <C>
 Net sales                                            $       --      $  111,511       $   47,825      $  (27,507)(a)    $  131,829
 Operating expenses:
    Cost of goods sold                                        --          69,710           39,170         (27,096)(a)        81,784
    Selling, general and administrative expenses              --          19,720            7,344              --            27,064
    Amortization of intangibles                               --             360              540              --               900
    Net periodic postretirement benefits                      --             650               --              --               650
                                                      ----------      ----------       ----------      ----------        ----------
 Operating income (loss)                                      --          21,071              771            (411)           21,431
 Other income (expense):
    Interest expense                                          --          (9,534)          (2,376)          1,076           (10,834)
    Amortization of deferred financing costs                  --            (316)             (54)             --              (370)
    Equity in net loss of subsidiaries                     5,809              --               --          (5,809)               --
    Other                                                     --             349            1,306          (1,489)              166
                                                      ----------      ----------       ----------      ----------        ----------
 Income (loss) from continuing operations
    before income tax provision                            5,809          11,570             (353)         (6,633)           10,393
 Income tax provision                                         --           3,969              615              --             4,584
                                                      ----------      ----------       ----------      ----------        ----------
 Net income (loss)                                    $    5,809      $    7,601       $     (968)     $   (6,633)       $    5,809
                                                      ==========      ==========       ==========      ==========        ==========

 </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 CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 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       $ 10,951      $  5,486       $ (3,212)        $ (4,826)     $  8,399
 Cash flows provided by (used in) investing activities:
     Capital expenditures, net                                   --        (1,401)          (782)              --        (2,183)
     Change in other assets                                      --        (1,271)           793               --          (478)
     Acquisitions, net of cash                                   --            --         (2,250)              --        (2,250)
                                                           --------      --------       --------         --------      --------
 Net cash used in investing activities                           --        (2,672)        (2,239)              --        (4,911)
 Cash flows provided by (used in) financing activities:
     Change in long-term receivables                             --            21             --               --            21
     Repayment of long-term obligations                        (575)          (51)          (518)              --        (1,144)
     Borrowing of long-term obligations                       5,100            --            462               --         5,562
     Change in accounts receivable securitization                --         2,288             --               --         2,288
     Financing fees                                              --            --           (282)              --          (282)
     Change in net equity and advances to / from
       subsidiaries                                         (15,476)           (2)         8,660            4,826        (1,992)
     Other                                                       --        (2,310)        (1,278)              --        (3,588)
                                                           --------      --------       --------         --------      --------
 Net cash provided by (used in) financing activities        (10,951)          (54)         7,044            4,826           865
                                                           --------      --------       --------         --------      --------
 Net increase (decrease) in cash and cash equivalents            --         2,760          1,593               --         4,353
 Cash and cash equivalents at beginning of period                --        (1,051)         2,370               --         1,319
                                                           --------      --------       --------         --------      --------
 Cash and cash equivalents at end of period                $     --      $  1,709       $  3,963         $     --      $  5,672
                                                           ========      ========       ========         ========      ========
</TABLE>


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 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      $   13,049     $   (6,217)    $   (9,334)     $   (6,633)    $   (9,135)
 Cash flows provided by (used in) investing activities:
     Capital expenditures, net                                    --         (1,689)        (2,067)             --         (3,756)
     Change in other assets                                       --           (192)          (157)             --           (349)
     Acquisitions, net of cash                                    --           (640)            --              --           (640)
                                                          ----------     ----------     ----------      ----------     ----------
 Net cash provided by (used in) investing activities              --         (2,521)        (2,224)             --         (4,745)
 Cash flows provided by (used in) financing activities:
     Change in long-term receivables                              --             --            263              --            263
     Repayment of long-term obligations                      (26,000)            --         15,408              --        (10,592)
     Borrowing of long-term obligations                       34,000             63        (11,693)             --         22,370
     Change in accounts receivable securitization                 --            376             --              --            376
     Issuance of common stock                                    335             --             --              --            335
     Change in net equity and advances to /from
       subsidiaries                                          (21,384)         6,436          8,315           6,633             --
     Other                                                        --             --           (180)             --           (180)
                                                          ----------     ----------     ----------      ----------     ----------
 Net cash provided by (used in) financing activities         (13,049)         6,875         12,113           6,633         12,572
                                                          ----------     ----------     ----------      ----------     ----------
 Net increase (decrease) in cash and cash equivalents             --         (1,863)           555              --         (1,308)
 Cash and cash equivalents at beginning of period                 --            308          1,173              --          1,481
                                                          ----------     ----------     ----------      ----------     ----------
 Cash and cash equivalents at end of period               $       --     $   (1,555)    $    1,728      $       --     $      173
                                                          ==========     ==========     ==========      ==========     ==========
 </TABLE>

                                      20

<PAGE>   21


                    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 March 31, 1999 compared to Three Months ended March 31, 1998

     Net sales were $130.2 million for the three months ended March 31, 1999 and
$131.8 million for the three months ended March 31, 1998. In a comparison of
1999 and 1998 first quarters, domestic sales increased 0.4% and international
sales decreased 3.8% (9.8% excluding acquisitions). Excluding acquisitions,
Latin America is down 13.1% which is due in part to weakening economics together
with the devaluation of the Brazil real and Europe is down 6.4% as the economics
in that region slowed sharply in the first quarter of 1999. Australia/Asia sales
are down 2.6%, a region we believe is beginning to show some signs of
improvement.

     Cost of goods sold as a percentage of sales for the three months ended
March 31, 1999 and March 31, 1998 was 64.2% and 62.0%, respectively. In an
effort to reduce inventory, factories are being run at less than optimal
levels. This results in a higher cost of goods sold percentage from the lower
unit volume available to absorb fixed overhead costs. In addition, sales of
higher margin components and accessories are lower thus far in 1999 compared to
the first three months of 1998.

     Selling, general and administrative expenses were $24.5 million and $27.1
million for the three months ended March 31, 1999 and 1998, respectively. As a
percentage of sales, selling, general and administrative expenses were 18.8%
for the three months ended March 31, 1999 and 20.5% for the

                                      21

<PAGE>   22


three months ended March 31, 1998. Thermadyne is focused on reducing its cost
of doing business, and the decrease in selling, general and administrative
expenses is the result of those efforts.

     Special charges of $2.9 million, related primarily to headcount reductions,
were recorded in the first quarter of 1999.

     Higher debt levels, as a result of the recapitalization of the Company in
conjunction with the Merger in May 1998, have resulted in a significant
increase in interest expense. Interest expense increased $6.9 million, or
63.8%, to $17.7 million for the quarter ended March 31, 1999 from $10.8 million
for the quarter ended March 31, 1998

     An income tax benefit of $0.4 million was reported for the first quarter
of 1999 on a pre-tax loss of $0.7 million. This compares to an income tax
provision of $4.6 million in the first quarter of 1998 on pre-tax income of
$10.4 million. The recapitalization of the Company in conjunction with the
Merger in May 1998 has significantly changed the Company's tax profile.

     Adjusted EBITDA was $26.2 million for the three months ended March 31,
1999, or 20.1% of sales. This compares to Adjusted EBITDA of $26.5 million, or
20.1% of sales, for the three months ended March 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Cash Flows

     Operating activities provided cash of $6.5 million in the first three
months of 1999, compared to using cash of $9.1 million in the first three months
of 1998. This positive change is largely the result of the Company's focus on
reducing its working capital. The use of cash by operating assets and
liabilities decreased from $20.4 million in the first quarter of 1998 to $3.1
million in the first quarter of 1999. Inventory and accounts receivable
provided much of this cash and were partially offset by a use of cash for the
payment of accrued bonuses and customer rebates. The decrease in cash used by
operating assets and liabilities is partially offset by a decrease in earnings,
adjusted for non-cash expenses, of $1.7 million in the first three months of
1999 compared to the same period of 1998. Cash used in investing activities was
$4.9 million and $4.7 million for the three months ended March 31, 1999 and
1998, respectively. The Company spent $1.6 million less on capital expenditures
and $1.6 million more on acquisitions in a comparison of the two periods.
Financing activities provided $2.8 million in cash in the first quarter of 1999,
compared to providing $12.6 million in cash in the first quarter of 1998. Net
borrowings under long-term obligations were $7.4 million less in the 1999 period
compared to the 1998 period.

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

                                      22

<PAGE>   23


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.

     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

                                      23

<PAGE>   24
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 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 March 31, 1999, the Company has
spent approximately $5.5 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 first quarter of 1999. Refer to
the Company's discussion in its Annual Report on Form 10-K for the year ended
December 31, 1998.

                                      24

<PAGE>   25


PART II.  OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

           a) Exhibits

              27 - Financial Data Schedule

           b) Reports on Form 8-K

              None

                                      25

<PAGE>   26


                                   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:  May 12, 1999
      ------------------------

                                       26

<PAGE>   27


                                   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:  May 12, 1999
      ------------------------

                                       27

<PAGE>   28


                                   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:  May 12, 1999
      ------------------------

                                      28