<PAGE>



                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)


            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the year ended March 31, 2000

                                       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 333-66221
                                               ---------


        R.A.B. HOLDINGS, INC.                      R.A.B. ENTERPRISES, INC.
--------------------------------------    --------------------------------------
     (Exact name of registrant as               (Exact name of registrant as
       specified in its charter)                 specified in its charter)

               DELAWARE                                   DELAWARE
--------------------------------------    --------------------------------------
    (State or other jurisdiction of            (State or other jurisdiction of
    incorporation or organization)             incorporation or organization)

              13-3893246                                 13-3988873
--------------------------------------    --------------------------------------
 (I.R.S. Employer identification no.)       (I.R.S. Employer identification no.)

444 Madison Avenue, New York, New York                               10022
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

Registrants' telephone number, including area code (212) 688-4500
                                                   --------------

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

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

                          Yes    X                 No
                              ---------               --------

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
      405 of Regulation S-K is not contained herein, and will not be contained,
      to the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-K or any
      amendment to this Form 10-K. [ X]


<PAGE>



                                      INDEX

                                                                            Page

PART I

Item 1.   Business......................................................   1
               (a) General Development of Business......................   1
               (b) Financial Information about Industry Segments........   1
               (c) Narrative Description of Business....................   1
               (d) Other Matters........................................   8
               (e) Financial Information about Foreign and Domestic
                       Operations.......................................   8

Item 2.   Properties....................................................   9

Item 3.   Legal Proceedings.............................................   9

Item 4.   Submission of Matters to a Vote of Security Holders...........   9

PART II

Item 5.   Market for Registrants' Common Equity and Related Stockholder
              Matters...................................................  10

Item 6.   Selected Financial Data.......................................  10

Item 7.   Management's Discussion and Analysis of Financial Condition and
              Results of Operations.....................................  10

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk....  17

Item 8.   Financial Statements and Supplementary Data...................  17

Item 9.   Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure.....................................  17

PART III

Item 10.  Directors and Executive Officers of the Registrants...........  18

Item 11.  Executive Compensation........................................  20

Item 12.  Security Ownership of Certain Beneficial Owners and
               Management...............................................  22

Item 13.  Certain Relationships and Related Transactions................  23

PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
               Form 8-K.................................................  26



<PAGE>



                                     PART I

Item 1. Business

      (a) General Development of Business

      On May 6, 1996, R.A.B. Holdings, Inc., a Delaware corporation
("Holdings"), was formed to build a fully integrated specialty food business by
acquiring food manufacturers with strong brand names and integrating their
products with a strong distribution network. On March 31, 1997, Holdings
acquired Millbrook Distribution Services Inc., a Delaware corporation
("Millbrook"), which is one of the nation's largest value-added full service
independent distributors of specialty foods, health and beauty care products and
general merchandise. On January 26, 1998, Holdings formed a wholly-owned
subsidiary, R.A.B. Enterprises, Inc., a Delaware corporation ("Enterprises"). On
May 1, 1998, Enterprises acquired The B. Manischewitz Company, LLC, a Delaware
limited liability company ("Manischewitz"). Manischewitz is among the nation's
leading manufacturers of processed kosher food products including matzos,
noodles, crackers, cake mixes, cookies, soups and processed fish products.

      Concurrent with the Manischewitz acquisition, Holdings contributed its
wholly-owned subsidiary Millbrook to Enterprises. The contribution was accounted
for as an "as if" pooling of interests. Prior to the acquisitions of Millbrook
and Manischewitz, Holdings and Enterprises had no operations.

      On January 31, 2000, Millbrook acquired certain of the assets and
operation of I. Epstein & Sons, Inc. ("Epstein") for a purchase price of
approximately $15.4 million, including transaction costs. Epstein was a full
service distributor of kosher and specialty food products, including its
Season(R) brand of canned fish, vegetables and other specialty food products.
Concurrent with the acquisition, the management and ownership of the Season
brand was assumed by Manischewitz.

      (b) Financial Information about Industry Segments

      Industry segment information with respect to the operations of Holdings
and Enterprises is included in Note 14 to the Consolidated Financial Statements
of Holdings and Enterprises for the years ended March 31, 2000, 1999 and 1998
included in Item 8 herein.

      (c) Narrative Description of Business

Millbrook Distribution Services Inc.

      The Industry. Distributors provide valuable services to both manufacturers
and retailers. Manufacturers benefit from distributors' broad geographic
coverage, efficient order processing and inventory management. Distributors
provide retailers access to broad product lines, the ability to place small
quantity orders and shelf and inventory management. Large distributors with
broad geographic coverage and an extensive offering of items generally have a
competitive advantage.

      Due to consolidations over the past several years, the number of
manufacturers and retailers has decreased. Additionally, retailers have
increasingly focused on reducing their supply chain costs and therefore
improving their margins. As a result, we believe that manufacturers and
retailers are increasingly dependent on distributors to provide a range of
in-store retailing and merchandising functions previously performed by retail
and/or manufacturer personnel. Distributors increasingly are participating in
all stages of marketing for the products distributed, including category
management, promotions, schematic design and display of products. To efficiently
provide such services, technological innovation has become an essential element
in the distribution industry. For smaller distributors, the costs of the
required investments in technology can be prohibitive.



                                       1
<PAGE>


      Millbrook is one of only a few distributors that focuses specifically on
the distribution of specialty foods, health and beauty care products and general
merchandise. Specialty foods typically generate higher margins for retailers
than those realized on other products sold in supermarkets. As a result,
supermarkets are adding new specialty food items to their product offerings and
aggressively promoting such items to capture these higher margins.

      Retailers are employing a number of marketing techniques to increase the
sales of high margin specialty food items. Stores are using kiosks and free
standing displays to attractively present the products to the consumer. In
addition, retailers are beginning to segregate specialty foods into specific
categories, such as ethnic foods, cookies and sauces. By utilizing a
"store-within-a-store" approach for specialty food, the products receive prime
shelf space within the store. Merchandising expertise is a key selection
criteria for determining the retailer's choice of a specialty food distributor.

      The health and beauty care segment includes baby care, cosmetics,
deodorants, first-aid, hair care, over-the-counter medications, toiletries, oral
hygiene and skin care products. The general merchandise segment covers a wide
variety of non-food products including housewares, pet supplies, stationery,
baby needs, photo and cleaning supplies. Competition in both the health and
beauty care and general merchandise categories has been intense due to the
growth of mass merchandisers that have captured market share by offering larger
assortments at "everyday low pricing." Despite losing market share, supermarkets
have maintained a stable base of customers and are expected to continue to be a
key outlet for health and beauty care products and general merchandise by
expanding product variety and offering customers one-stop shopping.

      Products Distributed. Through its comprehensive product offerings,
Millbrook distributes a wide variety of products to its customers.

      Specialty Foods. For the years ended March 31, 2000, 1999 and 1998,
specialty food sales were approximately $192.9 million, $141.1 million and
$123.2 million and represented 35.9%, 30.3% and 26.2% of Millbrook's total
revenues, respectively. Millbrook's specialty food segment consists of
approximately 11,500 items including ethnic, gourmet, and natural foods and
supplements. Millbrook offers ethnic foods such as kosher, Asian, Italian,
Irish, Mexican, Greek and German products, and gourmet foods such as teas,
coffees, spices, baking ingredients, condiments, candies, crackers, cookies,
jams and jellies. Millbrook's natural food products and supplements include
items such as grains, cereals, snacks, beverages, energy bars, baking
ingredients, pasta and sauces.

      Millbrook continues to view its specialty food segment as an opportunity
for future growth. Due to the higher margins associated with specialty foods,
supermarkets continue to add new specialty food items to their product
offerings. To accommodate its retail customers' desire for a broader offering of
specialty foods, Millbrook carries a wide variety of specialty food products. We
believe that Millbrook's product breadth, together with its merchandising
expertise and advanced technology in supply chain management, will continue to
enable its retail customers to capture the advantages of this product category.

      Health and Beauty Care. The health and beauty care segment has
traditionally been Millbrook's largest segment in terms of sales. For the years
ended March 31, 2000, 1999 and 1998, health and beauty care sales were
approximately $244.0 million, $234.2 million and $240.3 million and represented
45.4%, 50.4% and 51.1% of Millbrook's total revenues, respectively. Millbrook
currently carries approximately 15,400 health and beauty care items, including a
full line of national and private label brands. Millbrook's private label health
and beauty care products are offered under its ValuStar(R) brand, which
represents less than 1% of Millbrook's total revenues.



                                       2
<PAGE>


      Health and beauty care product offerings have grown due to new product
introductions and the growth in over-the-counter medications. This creates the
need for retailers to maximize variety in minimal shelf space. In recent years,
supermarkets, Millbrook's primary customer base, have lost market share in
health and beauty care products to mass merchandisers and drug store chains. In
response to this industry shift, Millbrook's strategy has been to expand its
customer base to include companies such as Ames and Bradlees. However,
supermarkets have begun to recapture lost market share by increasing the shelf
space allocated to health and beauty care items and expanding the variety of
those items carried. We believe that Millbrook's capabilities and extensive
product selection make it qualified to serve both the growing mass merchandiser
demand and meet the needs of the supermarket retailers for health and beauty
care items.

      General Merchandise. Millbrook currently carries approximately 10,300
general merchandise items. For the years ended March 31, 2000, 1999 and 1998,
general merchandise accounted for approximately $101.0 million, $89.5 million
and $106.7 million and represented 18.8%, 19.3% and 22.7% of Millbrook's total
revenues, respectively. Although the traditional supermarket cannot afford to
devote as much space to the general merchandise category as compared to the mass
merchandisers, supermarkets have the advantage of more frequent customer
traffic. This consumer traffic ensures that supermarkets will remain a key
outlet for general merchandise. In addition, targeting certain departments such
as pet, bath, candle and stationery as destination categories adds to the
importance of general merchandise in supermarkets.

      Retail Services. Millbrook traditionally has supplemented its product
distribution with full supporting services such as schematic development
(including plannogramming), space management, new store installations,
remodeling of existing stores, order writing, stocking, new item placement and
development and management of promotions.

      Over time, gross profit margins for these services have eroded principally
as a result of the retail phenomenon of "everyday low pricing." As a result,
Millbrook has developed a system to "unbundle" each of the elements of the
full-service program and use activity-based costing to charge the customer for
each supporting service on a stand-alone basis. In addition, Millbrook offers
these services without product distribution to other retail channels. This
fundamental change in the packaging of the services Millbrook offers to its
customers resulted in the formation of Millbrook Retail Solutions(SM) as a
separate group to focus solely on providing merchandising services.

      By using a predominantly part-time hourly workforce, management believes
Millbrook Retail Solutions has cost advantages over manufacturers and retailers.
Consequently, outsourcing these functions to Millbrook Retail Solutions'
experienced personnel, combined with Millbrook's established customer base and
technology infrastructure, position Millbrook to compete effectively in the
third-party retail service industry. In particular, we believe that Millbrook's
advanced technology in planogramming and its category management capabilities
enable it to provide service offerings that are not readily available from the
competition.



                                       3
<PAGE>


      Customers. Millbrook's top ten customers, which collectively represented
approximately 72%, 60% and 50% of its revenues during the years ended March 31,
2000, 1999 and 1998, respectively, have been customers for an average of 16
years. For the year ended March 31, 2000, supermarkets represented approximately
78% of revenues and mass merchandisers represented approximately 22% of
revenues. While Millbrook enjoys long-term relationships with most of its
customers, consistent with industry practice, substantially all of Millbrook's
customer supply agreements are on a month-to-month basis. Millbrook does have
supply agreements with certain of its significant customers. None of these
supply agreements is for a period of greater than three years.

      For the years ended March 31, 2000 and 1999, revenues from the Companies'
two largest customers, Shaw's Supermarket/Star Markets and Ames Department
Stores represented approximately 28.9% and 24.4% of total revenues,
respectively.

      Suppliers. Millbrook purchases products from leading suppliers in each of
its categories. For the year ended March 31, 2000, the five largest suppliers in
each of Millbrook's three principal product categories were:

      (1)   for specialty foods, World Finer Foods, BestFoods, T.J. Lipton, R.C.
            Bigelow and Hershey Foods;

      (2)   for health and beauty care products, Procter & Gamble, Johnson &
            Johnson, Unilever HPC, Warner-Wellcome and Gillette; and

      (3)   for general merchandise, Hartz Mountain Corp., Newell Rubbermaid,
            Ecko Housewares, Duracell (a division of Gillette), and General
            Electric Company.

      For the year ended March 31, 2000, the five largest suppliers represented
(i) for specialty foods, 7% of total purchases; (ii) for health and beauty care
products, 20% of total purchases; and (iii) for general merchandise, 3% of total
purchases.

The B. Manischewitz Company, LLC

      The Industry. According to Progressive Grocer, the U.S. grocery industry
has been characterized by relatively stable growth based on modest price and
population increases, with total sales of approximately $473 billion in 1999
reflecting a compound annual growth rate of 3.5% for the five years ended 1999.
According to Integrated Marketing Communications, Inc., kosher foods are one of
the fastest growing categories of the specialty food segment and are
characterized by a stable base of loyal consumers represented primarily by the
Jewish population. According to Integrated Marketing Communications, Inc. and
Packaged Facts, since 1992 sales of kosher foods have increased significantly
among non-Jewish consumers due to heightened awareness of the quality of
ingredients, rabbinical supervision and processing techniques used in
manufacturing kosher foods, together with growing interest in healthier foods
and the trend toward healthier lifestyles.

      Kosher foods are manufactured in accordance with Jewish dietary laws,
which require strict adherence to quality and cleanliness standards. Achieving
such standards requires specialized knowledge and the supervision of a
designated kosher certification agency. Due to the production methods used,
kosher products generally are considered to contain higher quality and healthier
ingredients. According to Integrated Marketing Communications, Inc.,
approximately 40% of the overall kosher category is kosher for Passover
products, which are prepared under even more stringent guidelines than other
kosher products.



                                       4
<PAGE>


      Products. Manischewitz' core business consists of traditional products
sold primarily to Jewish consumers. Manischewitz is a manufacturer of products
normally consumed during certain Jewish holidays, primarily Passover which
occurs during the spring, and Rosh Hashanah which occurs during the fall.
Manischewitz believes that, among the Jewish population, approximately 100%
recognize the Manischewitz brand name and 90% have tried one or more
Manischewitz products. Manischewitz believes that, among the non-Jewish
population, approximately 80% are familiar with the Manischewitz brand name and
over 50% have tried one or more Manischewitz products.

      Manischewitz has built its brand awareness and consumer base by offering a
broad assortment of products that can be consumed throughout the year, as well
as expanding its product offerings to accommodate changing tastes and the
popularity of various food items. Manischewitz' new product offerings include
macaroons with "ice cream" flavors, rice pilafs, various soup mixes and snack
items. Many of the new product offerings are intended to appeal to the
mainstream population to expand the customer base for Manischewitz' product
line.

      Manischewitz also licenses its name to other entities for use in the
manufacture, distribution and sale of certain kosher products including wine and
other food products. For the year ended March 31, 2000, licensing represented
less than 2% of Manischewitz' total revenues.

      Baked Products. Baked products include daily matzo, Passover matzo (which
is produced to more exacting standards dictated by religious tenets for
Passover) and crackers. The majority of these products are baked at
Manischewitz' Jersey City, New Jersey facilities. Matzo products in this
category are sold under the Manischewitz, Horowitz Margareten and Goodman's
brand names. Matzo sales generated approximately 26.2% and 25.0% of
Manischewitz' total revenues in fiscal 2000 and 1999, respectively. Manischewitz
has a license agreement with Goodman's to use its name on matzo products and
matzo-related products through 2003. In fiscal 2000, matzo products and
matzo-related products sold under the Goodman's name represented less than 2% of
Manischewitz' total revenues.

      Manufactured Products. Manufactured products consist of a variety of
soups, fish, borscht and other processed foods. Gefilte fish, sardines and other
canned fish products constitute the second largest product line for Manischewitz
and accounted for approximately 18.9% and 13.5% of its total revenues in fiscal
2000 and 1999, respectively.

      Co-Packed Products. Manischewitz markets a number of co-packed products,
including cookies, confectionery products, noodles, pasta, condiments and dry
soup mixes principally under the Manischewitz, Horowitz Margareten, Goodman's
and Season brand names. Manischewitz expects to continue to employ co-packers as
a capital efficient means of bringing its new products to market.

      Marketing and Product Development. In fiscal 2000 and 1999, spending on
marketing and trade promotion represented approximately 1.9% and 2.9% of total
revenues, respectively. Management believes, as a percentage of revenues, that
marketing and trade promotion expenses have historically remained substantially
below other food manufacturers. As part of its business strategy, management has
committed to significantly increase spending on advertising, marketing and
promotion of Manischewitz' existing products and new product offerings.





                                       5
<PAGE>


      During the last few years, the Manischewitz product line has been expanded
to strengthen and broaden its popular appeal. Packaging has been updated to
better communicate good taste and high quality, enhance visibility on store
shelves and attract more contemporary Jewish and non-Jewish consumers.
Manischewitz has introduced no-fat and low-fat items to reinforce the positive
health aspects of its products. Where appropriate, recipes have been improved
and new flavors introduced. In addition, Manischewitz has introduced new
products targeted at both Jewish and non-Jewish consumers and has begun to
capitalize on the positive Manischewitz brand image among consumers.

      Distribution. Manischewitz principally sells its products to independent
distributors operating throughout the U.S. and Canada. Two of its independent
distributors represented approximately 40.0% and 34.1% of total revenues in
fiscal 2000 and 1999, respectively. Among its customer base, supermarkets
represented approximately 90% of Manischewitz' fiscal 2000 total revenues and
other customers represented approximately 10%. We believe that Manischewitz'
five largest supermarket customers are Kroger, Albertson's, Safeway, Shop Rite
and Royal Ahold. In addition, Manischewitz continues to expand its marketing
arrangement with Wal-Mart to carry Manischewitz' products in its supercenters
and general merchandise stores.

      We estimate that its products are sold in a majority of the supermarkets
throughout the U.S. Due to their importance to Jewish consumers, Manischewitz'
products are "must carry" items for many supermarkets in the U.S. We continue to
seek to obtain shelf space from supermarkets in sections other than in the
kosher aisle. The ability to display Manischewitz' products in the non-kosher
supermarket aisles, for products such as crackers, noodles and side dishes, will
enhance awareness of Manischewitz' products, particularly among non-Jewish
consumers. To support these efforts, we intend to increase promotional and
advertising expenditures to enhance product presence and increase sales.

Raw Materials

      Manischewitz utilizes a number of raw materials in the manufacture of its
matzo and matzo-related products, principally flour. Manischewitz also utilizes
significant quantities of various fish in the manufacture of its gefilte fish
and the co-packing of its other canned fish products. Supplies of these
ingredients are readily available from a number of sources and are purchased
based on price.

Competition

Millbrook Distribution Services Inc.

      Specialty Foods. The competition in the specialty foods segment is
fragmented among over 200 distributors, most of which are small and
geographically limited. Millbrook is able to compete effectively in the
specialty foods segment based on its breadth of products and its logistics
capabilities. Its "piece pick" capability gives Millbrook's retailers product
variety without the inventory investment in slower-moving, high margin specialty
food products. Unlike most other specialty food distributors, Millbrook offers a
single source of supply for specialty foods, health and beauty care products and
general merchandise. This generates transportation and distribution efficiencies
for Millbrook. Millbrook's principal competitors in this segment are Haddon
House and Gourmet Awards.



                                       6
<PAGE>


      Health and Beauty Care. Supermarkets historically have placed health and
beauty care products wherever shelf space was available. As supermarkets do not
have the available shelf space to compete with the breadth of health and beauty
care items carried by mass merchandisers, they have become reliant on delivery
and inventory techniques that maximize product variety. Management is of the
opinion that Millbrook's "piece pick" capability and breadth of health and
beauty care product assortment allows its supermarket customers to effectively
compete with mass merchandisers in this product category. Millbrook's principal
competitors in this segment are SuperValu, Fleming and Associated Wholesale
Grocers.

      General Merchandise. Supermarkets are refocusing their efforts to carry
general merchandise specifically matched to their customer profiles and
rethinking the manner in which they allocate shelf space to general merchandise.
We believe product competition in selection and promotion at the retail level
favors distributors such as Millbrook. Millbrook's buying power results in a
large assortment of general merchandise that is continually tailored to meet its
customers' and the consumers' needs. Through Millbrook's "piece pick"
capability, this assortment is available to the retailers with a lower inventory
investment and space allocation. Millbrook's principal competitors in this
segment are SuperValu, Fleming and Associated Wholesale Grocers.

      Retail Services. The retail services industry is competitive and is
predominantly comprised of a large number of small organizations that are either
retailer, channel or region specific. In the opinion of management, there are
approximately 120 retail service companies competing with Millbrook Retail
Solutions(SM). We believe that its principal competitors in this segment include
PIMMS, Powerforce and SPAR. The principal competitive factors within the
industry include:

      (a)   breadth and quality of client services;
      (b)   price;
      (c)   the ability to execute specific client priorities rapidly and
            consistently over a wide geographical region; and
      (d)   technological capability.

      The combination of the quality of Millbrook Retail Solutions' client
services and Millbrook's breadth of expertise, including its retail-oriented
technology, experience at store level and logistics capabilities is unique in
the industry.

The B. Manischewitz Company, LLC

      Manischewitz competes within a small group of branded kosher
manufacturers. In the matzo category, all of the domestic producers have been in
the industry for over 80 years. Manischewitz' brand names, the complexities of
complying with kosher manufacturing requirements and the relatively modest size
of the market have all contributed to the stability of the competitive
environment faced by Manischewitz. Management's business strategy includes
promoting and marketing Manischewitz products in the non-kosher aisles of
supermarkets. However, outside the kosher aisle, Manischewitz products will
compete with the products of a significant number of companies of varying sizes,
including divisions or subsidiaries of larger companies. Many of these
competitors have multiple product lines as well as substantially greater
financial and other resources available to them.




                                       7
<PAGE>


      Manischewitz' primary competitor in the production and distribution of
matzo is Streit's, a New York based family-owned regional marketer. Within the
gefilte fish market, Manischewitz competes with Rokeach and its related brands,
including Mothers, Old Vienna and Mrs. Adlers.

      Management believes that Manischewitz' loyal customer base and name
recognition make the brand less vulnerable to competition with respect to its
core products.

Trademarks

      Manischewitz owns a number of registered trademarks in the U.S., Canada,
Europe, Israel, South Africa and South America. The registered trademarks in the
U.S. include Manischewitz(R), Horowitz Margareten(R), Onion Tams(R), Passover
Pantry(R), Tam Tam(R), Vege-Matzo(R), Wheat Tams(R), Design Star of David(R),
Star of David & Lion Design(R), Fishlets(R), Design of Star, Lion & Scroll(R),
Deborah Ross & Design(R), Bakit(R), Garlic Tam(R), Horowitz Margareten &
Design(R), Season(R), Season Kosher Select(R) , Gold Boat(R), Atlantic
Gourmet(R) and Moadim(R). Manischewitz has granted exclusive licenses under
certain of its trademarks to others for the manufacture and sale of wine and
other food products. Such licenses are limited in scope to certain territories
and entitle Manischewitz to royalties based on the net sales or revenues of the
licensed products sold. Management is not aware of any facts that would have a
material adverse impact on the continued use of any of its trademarks and trade
names.

      (d) Other Matters

Employees

      As of March 31, 2000, we had a total of 2,500 full-time employees, 160
part-time employees and the ability to draw upon 450 part-time service
merchandisers nationwide.

      Manischewitz has approximately 170 unionized workers. Most of the
unionized workers at Manischewitz are represented under a contract with Bakery,
Confectionery and Tobacco Workers International Union (AFL-CIO, Local 3), which
was ratified in October 1997 and which will expire in September 2000. Millbrook
has approximately 35 unionized workers. The unionized workers at Millbrook are
represented under a contract with Truck Drivers Union, Local No. 170, which was
ratified in March 1999 and which will expire in March 2003.

      Management believes that Manischewitz' and Millbrook's relations with
their employees and the unions representing certain groups of employees are
generally good.

      (e) Financial Information about Foreign and Domestic Operations

      Millbrook provides distribution services to retail locations in 40 states
throughout the United States, primarily east of the Rocky Mountains.
Manischewitz' products are primarily sold through distributors throughout the
United States. Revenues generated by sales to distributors primarily in Canada,
Europe and the Middle East accounted for less than 5% of Manischewitz' revenues
in fiscal 2000.




                                       8
<PAGE>


Item 2. Properties

      Facilities. Millbrook's corporate headquarters are located in Leicester,
Massachusetts, where management and administrative functions are performed.
Millbrook currently uses six distribution centers:

<TABLE>
<CAPTION>
                                                                                                 Approximate     Lease
                                                                                                   Square      Expiration
Property                                              Location                Own or Lease         Footage        Date
--------                                              --------                ------------         -------        ----
<S>                                                   <C>                     <C>                <C>           <C>
National Support Center/Distribution Center.........  Harrison, AR                 Own           1,200,000         --
Corporate Headquarters/Distribution Center..........  Leicester, MA               Lease            340,000      11/30/06
Distribution Center.................................  Worcester, MA               Lease            241,300      08/31/02
Distribution Center.................................  Ozark, AL                    Own             210,000         --
Distribution Center.................................  Greenville, NC              Lease            110,000      03/31/04
Distribution Center.................................  E. Brunswick, NJ            Lease            177,600      07/31/08
</TABLE>

      In addition, Millbrook uses 115 transfer depots located in 32 states.

      Millbrook owns or leases its fleet of approximately 115 tractors, 280
trailers and 290 vans.

      Manischewitz' corporate headquarters are located in Jersey City, New
Jersey, where management and administrative functions are performed.
Manischewitz occupies the following properties, all of which are used in
connection with its food business:

<TABLE>
<CAPTION>
                                                                                                 Approximate     Lease
                                                                                                   Square      Expiration
Property                                              Location                Own or Lease         Footage        Date
--------                                              --------                ------------         -------        ----
<S>                                                   <C>                     <C>                <C>           <C>
Bakery..............................................  Jersey City, NJ              Own              86,000         --
Manufacturing facility..............................  Vineland, NJ                 Own              67,700         --
Warehouse...........................................  Jersey City, NJ             Lease             43,500      08/31/00
Office..............................................  Jersey City, NJ             Lease              9,600      08/31/00
</TABLE>

      The Jersey City, New Jersey bakery operates on a two-shift basis during
four months of the year and a three-shift basis during seven months of the year.
Each shift consists of eight hours. The plant, which has computerized production
equipment, is shut down for the month of July for maintenance and to prepare the
plant to meet the kosher requirements for Passover production.

      The Vineland, New Jersey manufacturing and warehousing facility is located
on a five-acre site. It has the capacity to produce 11,000 pounds of processed
fish per shift. The facility operates on a single shift basis throughout the
year, with its primary maintenance period in April.

Item 3. Legal Proceedings

      Holdings and Enterprises are subject to litigation in the ordinary course
of business. Neither Holdings nor Enterprises is a party to any lawsuit or
proceeding which, in the opinion of management, is likely to have a material
adverse effect on their consolidated financial condition or consolidated future
results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

      None.



                                       9
<PAGE>


                                     PART II

Item 5. Market for Registrants' Common Equity and Related Stockholder Matters

      None.

Item 6. Selected Financial Data

      The selected consolidated financial data of Holdings and Enterprises
presented below as of March 31, 2000 and 1999 and for each of the years in the
three year period ended March 31, 2000 were derived from the audited
consolidated financial statements of Holdings and Enterprises (the "Consolidated
Financial Statements") set forth herein. The audited balance sheet data as of
March 31, 1998 and the audited statement of operations data for the year ended
March 31, 1997 was derived from the financial statements of Millbrook which are
not presented herein. In addition, the selected consolidated financial data
presented below as of and for the year ended March 31, 1996 and the balance
sheet data as of March 31, 1997 were derived from the financial statements of
the predecessor, a wholly-owned subsidiary of McKesson Corporation ("McKesson")
which are not presented herein. The data should be read in conjunction with the
Consolidated Financial Statements, related notes and other financial information
included herein.

<TABLE>
<CAPTION>
                                               Predecessor                            Holdings
                                       ----------------------------    ----------------------------------------
For the years ended March 31,              1996           1997             1998          1999         2000
-----------------------------              ----           ----             ----          ----         ----
                                         (Dollars in Thousands)                 (Dollars in Thousands)

<S>                                      <C>            <C>              <C>           <C>          <C>
Statement of Operations Data:
Revenues............................     $  563,099     $  476,175       $  470,201    $  508,293   $  580,616
Gross profit........................        132,701        111,413          110,039       122,757      137,226
Operating expenses..................        119,090        104,038          102,664       112,833      121,261
Operating income....................         13,611          7,375            7,375         9,924       15,965
Interest expense, net...............          4,708          3,843            5,079        20,020       18,960
Non-operating income, other.........          1,600             69
Provision (benefit) for income
   taxes............................          4,334          1,660            1,122        (3,174)      (1,146)
Income (loss) before
   extraordinary item...............          6,169          1,941            1,174        (6,922)      (1,849)
Extraordinary gain, net
   of income taxes..................                                                                    12,914
Net income (loss)...................          6,169          1,941            1,174        (6,922)      11,065
Balance Sheet Data:
Working capital.....................     $   46,540     $   36,535       $   30,798    $   51,288   $   54,549
Property, plant and equipment, net..         16,313         15,017           23,395        38,467       37,199
Total assets........................        113,026        102,731          108,772       297,607      290,008
Total debt..........................                                         38,110       184,049      170,089


<CAPTION>
                                                      Enterprises
                                       ----------------------------------------
For the years ended March 31,              1998         1999          2000
-----------------------------              ----         ----          ----
                                                 (Dollars in Thousands)

<S>                                      <C>          <C>           <C>
Statement of Operations Data:
Revenues............................     $  470,201   $  508,293    $  580,570
Gross profit........................        110,039      122,757       137,180
Operating expenses..................        102,656      112,833       121,240
Operating income....................          7,383        9,924        15,940
Interest expense, net...............          5,079       14,949        15,888
Non-operating income, other.........
Provision (benefit) for income
   taxes............................          1,122       (1,399)          288
Income (loss) before
   extraordinary item...............          1,182       (3,626)         (236)
Extraordinary gain, net
   of income taxes..................                                     4,742
Net income (loss)...................          1,182       (3,626)        4,506
Balance Sheet Data:
Working capital.....................     $   30,796   $   46,382    $   55,066
Property, plant and equipment, net..         23,395       38,467        37,199
Total assets........................        108,875      279,453       285,330
Total debt..........................         38,110      136,049       145,089
</TABLE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

      The following discussion and analysis of Holdings' and Enterprises'
financial condition and results of operations should be read in conjunction with
the financial information included in their Consolidated Financial Statements.



                                       10
<PAGE>


Overview

      Holdings was formed in 1996 to build a fully integrated specialty food
business by acquiring food manufacturers with strong brand names and integrating
their products with a strong distribution network. On March 31, 1997, Holdings
acquired Millbrook from McKesson. On May 1, 1998, Enterprises, a wholly-owned
subsidiary of Holdings, acquired Manischewitz. The results of operations of
Manischewitz are included in the consolidated results of operations since its
date of acquisition. Concurrent with the Manischewitz acquisition, Holdings
contributed Millbrook to Enterprises. This contribution was accounted for as an
"as if" pooling of interests. Prior to its acquisition of Millbrook, Holdings
had no operations. Enterprises, which was formed in 1998 to acquire
Manischewitz, had no operations prior to that acquisition. On January 31, 2000,
Millbrook acquired certain of the assets and operation of Epstein. The operating
results of Epstein's distribution business and its Season and related brand
business are reflected in the operating results of Millbrook and Manischewitz,
respectively, since its date of acquisition.

General

      Holdings' and Enterprises' operating subsidiaries are Millbrook and
Manischewitz. Operating costs and expenses consist of cost of sales,
distribution and warehousing and selling, general and administrative expenses.
Cost of sales includes the cost of products manufactured and purchased by
Manischewitz, including raw materials, products purchased under co-packing
arrangements and manufacturing payroll and related employee benefit costs, and
the cost of products distributed by Millbrook. Distribution and warehousing
expenses include payroll and related employee benefit costs of Millbrook's
distribution operation and transportation costs. Selling, general and
administrative expenses include payroll and related employee benefit costs of
Millbrook's and Manischewitz' various sales organizations and other general and
administrative functions.

Year Ended March 31, 2000 Compared to the Year Ended March 31, 1999

      Revenues. Revenues for the year ended March 31, 2000 increased $72.3
million or 14.2% to $580.6 million as compared to $508.3 million for the year
ended March 31, 1999. Revenues include:

      (i)   Millbrook's sales of $537.9 million for the year ended March 31,
            2000 as compared to $464.8 million for the year ended March 31,
            1999;

      (ii)  Manischewitz' sales of $50.3 million for the year ended March 31,
            2000 as compared to $46.5 million for the year ended March 31, 1999;
            and

      (iii) intersegment sales, which are eliminated in consolidation, of $7.6
            million for the year ended March 31, 2000 as compared to $3.0
            million for the year ended March 31, 1999.

      Millbrook's revenues increased $73.1 million or 15.7% as compared to the
prior year. This increase is principally due to the growth of sales to existing
customers and the addition of new customers.

      Manischewitz' revenues increased $3.8 million or 8.2% to $50.3 million as
compared to the eleven month period ended March 31, 1999. Had the comparable
pre-acquisition period been included in the period ended March 31, 1999,
Manischewitz' revenues would have increased $1.6 million or 3.4% for the year
ended March 31, 2000. This increase is principally due to:

      (i)   sales of Season brand products acquired as part of the Epstein
            acquisition since January 31, 2000 ($2.9 million), partially offset
            by;



                                       11
<PAGE>


      (ii)  the negative impact on sales of customer account changes in
            Manischewitz' northeast distributor network, including the
            termination of its largest northeast distributor during the third
            quarter of fiscal 2000 ($1.3 million).

      Gross Profit. Gross profit for the year ended March 31, 2000 was $137.2
million as compared to $122.8 million for the year ended March 31, 1999, an
increase of $14.4 million or 11.8%. As a percentage of revenues, the gross
profit margin was 23.6% for the year ended March 31, 2000 as compared to 24.2%
for the year ended March 31, 1999.

      The increase in gross profit dollars and its impact on gross profit margin
is primarily due to the following:

      (i)   additional margin dollars associated with Millbrook's increased
            sales, partially offset by reduced margins within the health and
            beauty care and general merchandise categories of our distribution
            business due to sustained competitive pressures and lower gross
            margin sales due to the growth of Millbrook's non-serviced customer
            base as a percentage of its total customer base ($12.4 million or
            (0.3%));

      (ii)  distribution sales acquired as part of the Epstein acquisition since
            January 31, 2000 ($4.1 million or 0.1%);

      (iii) the lost gross profit margin on Manischewitz' sales (($0.5 million)
            or (0.1%)). Had the comparable pre-acquisition period been included
            in the period ended March 31, 1999, Manischewitz' gross profit would
            have decreased $1.5 million and its gross profit margin would have
            decreased approximately 3.2%. This decline is principally due to the
            lower level of sales (excluding Season products) resulting in
            underabsorption of manufacturing overhead and a shift in product mix
            to lower margin products; and

      (iv)  the lost gross profit margin on lower third party service
            merchandising sales of Millbrook as its focus shifted to the
            transition and integration of new customer accounts (($1.4 million)
            or (0.2%)).

      Operating Expenses. Distribution and warehousing expenses for the year
ended March 31, 2000 were $45.2 million, as compared to $38.1 million for the
year ended March 31, 1999. As a percentage of revenues, distribution and
warehousing expenses increased to 7.8% for the year ended March 31, 2000 as
compared to 7.5% for the comparable period of the prior year. The increase in
distribution and warehousing costs is principally due to:

      (i)   the labor and transportation costs associated with the revenue
            increases generated by Millbrook's existing customers and the
            addition of new customers; and

      (ii)  the reconfiguration of certain of Millbrook's distribution
            facilities to accommodate the addition of new customers.

      Selling, general and administrative expenses for the year ended March 31,
2000 were $73.0 million, as compared to $72.0 million for the year ended March
31, 1999. As a percentage of revenues, selling, general and administrative
expenses decreased to 12.6% for the year ended March 31, 2000 as compared to
14.2% for the comparable period of the prior year. This dollar increase
primarily consists of:



                                       12
<PAGE>


      (i)   selling, general and administrative costs associated with the
            Epstein distribution operations acquired January 31, 2000 ($2.1
            million), partially offset by reduced costs of $1.7 million or
            (2.6%) associated with Millbrook's operations for the year ended
            March 31, 2000. This decrease primarily relates to reduced payroll
            and related costs associated with the growth of Millbrook's
            non-serviced customer base requiring lower overall headcount; and

      (ii)  an increase of $0.6 million or 10.1% in costs associated with
            Manischewitz' operations for the year ended March 31, 2000. Had the
            comparable pre-acquisition period been included in the period ended
            March 31, 1999, Manischewitz' selling, general and administrative
            expenses would have been consistent with the prior year.

      Amortization of intangibles was $3.1 million for the year ended March 31,
2000 as compared to $2.8 million for the year ended March 31, 1999. This
increase resulted from the comparable prior period including only eleven months
of amortization as Manischewitz was acquired on May 1, 1998 and amortization
resulting from the Epstein acquisition since January 31, 2000.

      Interest Expense. Interest expense for the year ended March 31, 2000 was
$19.0 million (consisting of $3.1 million for Holdings and $15.9 million for
Enterprises, respectively) as compared to $20.0 million (consisting of $5.1
million for Holdings and $14.9 million for Enterprises, respectively) for the
year ended March 31, 1999. The decrease in interest expense is primarily
attributable to a lower weighted average interest rate on debt outstanding as a
result of Holdings' and Enterprises' repurchases of senior notes replacing such
debt with borrowings under the credit agreement. The average interest rate on
Holdings' and Enterprises' debt outstanding during the year ended March 31, 2000
was 11.1% and 10.7%, respectively.

      Taxes. For the year ended March 31, 2000, the benefit for income taxes was
$1.1 million for Holdings and the provision was $0.3 million for Enterprises, as
compared to a benefit of $3.2 million for Holdings and $1.4 million for
Enterprises for the year ended March 31, 1999. The change of $2.1 million and
$1.7 million for Holdings and Enterprises, respectively, principally relates to
the results of operations and the utilization of state net operating loss
carryforwards, which were subject to a valuation allowance in fiscal 1999.

      Extraordinary Item - Early Extinguishment of Debt. The extraordinary gain
on early extinguishment of debt for the year ended March 31, 2000 was $12.9
million (consisting of $8.2 million, net of income taxes of $5.4 million for
Holdings and $4.7 million, net of income taxes of $3.1 million for Enterprises).
This gain resulted from Holdings' repurchase of $23.0 million of its outstanding
13% senior notes and Enterprises' repurchase of approximately $20.9 million of
its outstanding 10.5% senior notes.

      Net Income. As a result of the foregoing, the net income for the year
ended March 31, 2000 was $11.1 million and $4.5 million for Holdings and
Enterprises, respectively, as compared to net loss of $6.9 million for Holdings
and $3.6 million for Enterprises for the year ended March 31, 1999.



                                       13
<PAGE>


Year Ended March 31, 1999 Compared to the Year Ended March 31, 1998

      Revenues. Revenues for the year ended March 31, 1999 increased $38.1
million or 8.1% to $508.3 million as compared to $470.2 million for the year
ended March 31, 1998. Revenues include Manischewitz' sales of $46.5 million and
Millbrook's sales of $464.8 million for the year ended March 31, 1999 as
compared to Millbrook's sales of $470.2 million for the year ended March 31,
1998. Intersegment sales, which are eliminated in consolidation, were $3.0
million for the year ended March 31, 1999.

      Millbrook's revenues decreased $5.4 million or 1.2% as compared to the
prior year. This decrease is principally due to the addition of new customers
and growth of existing customers ($15.9 million) being more than offset by sales
($21.3 million) to a customer serviced in fiscal 1998 as a result of a
threatened strike of the customer's distribution operations, which were not
replaced in fiscal 1999.

      Manischewitz' revenues decreased $2.1 million or 4.2% to $46.5 million
since its acquisition on May 1, 1998 as compared to $48.6 million for the
comparable pre-acquisition period. This decrease is principally comprised of
sales related to Manischewitz' Chicago division which was sold in June 1997
($0.7 million) and a slower sales rate during the first ninety days of
Enterprises' ownership caused by distributor uncertainty resulting from the
acquisition ($1.1 million). Due to Enterprises' ownership of Millbrook,
distributors were initially very cautious about continuing to place product
orders out of concern that Enterprises intended to terminate their right to
distribute Manischewitz products. Following management meetings with a number of
distributors, revenues for the eight months ended March 31, 1999 have generally
been in line with the comparable pre-acquisition period.

      Gross Profit. Gross profit for the year ended March 31, 1999 was $122.8
million as compared to $110.0 million for the year ended March 31, 1998, an
increase of $12.8 million or 11.6%. As a percentage of revenues, the gross
profit margin was 24.2% for the year ended March 31, 1999 as compared to 23.4%
for the year ended March 31, 1998.

      The increase in gross profit dollars and its impact on gross profit margin
is primarily due to the following:

      (i)   the contribution of the gross profit on Manischewitz' sales since
            its acquisition ($17.0 million or 1.2%); and

      (ii)  the contribution of the gross profit on the growth in Millbrook's
            third-party service merchandising business ($2.1 million or 0.3%);
            offset by

      (iii) the lost margin on sales to a customer as a result of a threatened
            strike of its distribution operations, which sales were not replaced
            ($5.2 million or 0.0%); and

      (iv)  the lost margin resulting from the heightened competitive pressures
            within the health and beauty care and general merchandise segments
            of our distribution business and the shift in sales mix from higher
            margin general merchandise to lower margin health and beauty care
            products ($0.4 million or (0.8%)).

      Operating Expenses. Distribution and warehousing expenses for the year
ended March 31, 1999 were $38.1 million as compared to $37.3 million for the
year ended March 31, 1998.

      Selling, general and administrative expenses for the year ended March 31,
1999 were $72.0 million as compared to $65.3 million for the year ended March
31, 1998. The $6.7 million increase as compared to the prior year consisted of
the following:



                                       14
<PAGE>


      (i)   $6.0 million from Manischewitz' operations for the year ended March
            31, 1999; and

      (ii)  a $0.7 million or 1.1% increase from Millbrook's operations for the
            year ended March 31, 1999. The increase at Millbrook primarily
            relates to increased payroll and related costs associated with the
            growth in our third-party service merchandising business partially
            offset by reductions in various other selling, general and
            administrative costs.

      Amortization of intangibles was $2.8 million for the year ended March 31,
1999 as a result of the Manischewitz acquisition. There was no such amortization
for the comparable pre-acquisition period.

      Interest Expense. Interest expense for the year ended March 31, 1999 was
$20.0 million (consisting of $5.1 million for Holdings and $14.9 million for
Enterprises, respectively) as compared to $5.1 million for Holdings and
Enterprises for the year ended March 31, 1998. The increased interest expense is
primarily attributable to the $168 million of senior notes which were sold in
May 1998 to fund the acquisition of Manischewitz, resulting in higher average
debt outstanding at higher average interest rates. The average interest rate on
Holdings' and Enterprises' debt outstanding during the year ended March 31, 1999
was 11.7% and 11.1%, respectively.

      Taxes. The benefit for income taxes for the year ended March 31, 1999 was
$3.2 million and $1.4 million for Holdings and Enterprises, respectively, as
compared to a provision of $1.1 million for Holdings and Enterprises for the
year ended March 31, 1998. The change of $4.3 million and $2.5 million for
Holdings and Enterprises, respectively, principally relates to the results of
operations.

      Net Loss. As a result of the foregoing, the net loss for the year ended
March 31, 1999 was $6.9 million and $3.6 million for Holdings and Enterprises,
respectively, as compared to net income of $1.2 million for Holdings and
Enterprises for the year ended March 31, 1998.

Financial Condition, Liquidity and Capital Resources

      Operations for the year ended March 31, 2000, excluding the net gain on
early extinguishment of debt and non-cash charges for depreciation, amortization
and deferred income taxes, provided cash of $11.7 million for Holdings and $11.4
million for Enterprises as compared to providing cash of $0.5 million for
Holdings and $5.3 million for Enterprises, for the year ended March 31, 1999.
During the years ended March 31, 2000 and 1999, other changes in assets and
liabilities resulting from operating activities utilized cash of $13.0 million
for Holdings and $8.2 million for Enterprises and provided cash of $2.5 million
for Holdings and $0.9 million for Enterprises, respectively. This activity
resulted in net cash utilized by operating activities of $1.3 million for
Holdings and net cash provided by operating activities of $3.2 million for
Enterprises as compared to net cash provided by operations of $3.0 million for
Holdings and $6.2 million for Enterprises, respectively, in fiscal 1999.
Investing activities, which principally consisted of the acquisition of I.
Epstein & Sons, Inc. in fiscal 2000, the acquisition of Manischewitz in the
fiscal 1999 period and the acquisitions of plant and equipment, resulted in a
use of cash of $18.3 million and $129.3 million for Holdings and Enterprises for
the years ended March 31, 2000 and 1999, respectively. During the year ended
March 31, 2000, financing activities, which principally consisted of the
repurchase of $23.0 million of senior notes for $8.8 million by Holdings and
$20.9 million of senior notes for $12.2 million by Enterprises, offset by $10.2
million of payments from the interest escrow account by Holdings; additional
borrowings of $29.9 million under the credit agreement by Holdings and
Enterprises; and $3.0 million of proceeds from the issuance of preferred stock
by Holdings, provided cash of $22.2 million for Holdings and $17.6 million for
Enterprises. During the year ended March 31, 1999, financing activities, which
principally consisted of the sales of $168.0 million of senior notes, offset by
debt issuance costs of $6.5 million and $4.8 million by Holdings and
Enterprises, respectively, the funding of a $17.0 million interest escrow
account by Holdings, $3.1 million of payments from the interest escrow account
by Holdings; the repayment of borrowings under the credit agreement of $22.1
million by Holdings and Enterprises; and $0.2 million of proceeds from the
issuance of common stock by Holdings, provided cash of $125.8 million for
Holdings and $122.6 million for Enterprises.



                                       15
<PAGE>


      At March 31, 2000, outstanding borrowings under the credit agreement were
$45.9 million, consisting of $39.0 million of revolving credit loans and an
amortizing term loan of $6.9 million. Under the terms of the credit agreement,
substantially all of Millbrook's assets and the accounts receivable and
inventory of Manischewitz are pledged to provide collateral for borrowings and
Enterprises is restricted from making distributions to Holdings to pay
dividends. At March 31, 2000, Millbrook and Manischewitz had approximately $4.7
million of cash and approximately $49 million of available borrowing capacity
under the credit agreement. In addition, there were $3.3 million of cumulative
unpaid dividends on Holdings' series A and series B preferred stock.

      Following March 31, 2000, Enterprises repurchased approximately $18.8
million of its outstanding 10.5% senior notes. The resulting gain from the early
extinguishment of this debt will be recorded in Enterprises' condensed
consolidated financial statements for the fiscal quarter ending June 30, 2000.
Enterprises' senior notes are fully and unconditionally guaranteed on a joint
and several basis by Millbrook and Manischewitz.

      On April 17, 2000, Millbrook acquired substantially all of the assets and
operation of the Miller Buckeye Biscuit Company, Inc. for a purchase price of
approximately 17.1 million. The acquisition was funded through additional
borrowings under the credit agreement.

      Holdings and Enterprises expect capital expenditure spending for the year
ending March 31, 2001 to be approximately $5.0 million. Such expenditures
include, among other things, leasehold improvements and the acquisition of
computer equipment and software, manufacturing machinery and equipment. It is
anticipated that these capital commitments for 2001 will be financed through
working capital, operating leases and cash flow from operations.

      Interest payments on the senior notes and borrowings under the credit
agreement represent significant obligations of Holdings, Enterprises and their
subsidiaries. The primary source of liquidity of Holdings and Enterprises will
be cash flows from operations of Millbrook and Manischewitz and borrowings under
the credit agreement. Holdings and Enterprises believe that, based on current
and anticipated financial performance, cash flows from operations, borrowings
under the credit agreement and dividends and other distributions available from
their respective subsidiaries will be adequate to meet anticipated requirements
for capital expenditures, working capital and scheduled interest payments on the
senior notes. Holdings and Enterprises are currently in compliance with the
covenants contained in the credit agreement and the indentures relating to the
senior notes and expect to be able to continue to comply. However, the capital
requirements of Holdings and Enterprises may change. Each of Holdings and
Enterprises believes that it has sufficient borrowing capacity and access to
debt markets to pursue acquisition opportunities and fund extraordinary working
capital requirements, if necessary. At March 31, 2000, Holdings and Enterprises
had total outstanding indebtedness of $170.1 million and $145.1 million,
respectively. The ability of Holdings and Enterprises to satisfy capital
requirements, to borrow under the credit agreement and to repay or refinance the
senior notes will depend on future financial performance of Holdings and
Enterprises, which in turn will be subject to general economic conditions and to
financial, business and other factors, including factors beyond Holdings'
control.




                                       16
<PAGE>


Effects of Inflation and Other Matters

      For the year ended March 31, 2000, Holdings' and Enterprises' cost of
product remained relatively stable. To the extent possible, Holdings' and
Enterprises' objective is to offset the impact of inflation through productivity
enhancements, cost reductions and price increases.

      Holdings and Enterprises are not involved in any significant environmental
matters.

      Impact of New Accounting Pronouncements - SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" was issued in June, 1998 and, as
amended, is effective for fiscal years beginning after June 15, 2000. SFAS No.
133 requires the recognition of all derivatives in the consolidated balance
sheet as either assets or liabilities measured at fair value. We will adopt SFAS
No. 133 when it becomes effective. We have not yet determined the impact SFAS
No. 133 will have on our financial position or results of operations when such
statement is adopted.

Forward-Looking Statements

      The foregoing discussion in "Management's Discussion and Analysis of
Financial Condition and Result of Operations" contains "forward-looking"
statements. Additionally, written materials issued and oral statements made from
time to time by Holdings and Enterprises may contain forward-looking statements.
Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts and by their use of words such as
"goals", "expects", "plans", "believes", "estimates", "forecasts", "projects",
"intends" and other words of similar meaning. Execution of business and
acquisition strategies, expansion of product lines and increase of distribution
networks or product sales are areas, among others, whose future success may be
difficult to predict. They are based on management's then-current information,
assumptions, plans, expectations, estimates and projections regarding the food
and wholesale distribution industries. However, such statements are not
guarantees of future performance, and actual results and outcomes may differ
materially from what is expressed depending on a variety of factors, many of
which are outside of Holdings' and Enterprises' control.

      Among the factors that could cause actual outcomes or results to differ
materially from what is expressed in these forward-looking statements are
changes in the demand for, supply of, and market prices of Holdings' and
Enterprises' products, the action of current and potential new competitors,
changes in technology and economic conditions.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk

      Market risk represents the risk of loss that may impact the consolidated
financial position, results of operations or cash flows of Holdings and
Enterprises due principally to adverse conditions in commodity market prices and
interest rate risk related to debt obligations outstanding. Holdings and
Enterprises do not use financial instruments or derivatives for any trading or
other speculative purposes.

      Holdings and Enterprises secure future commitments for certain commodities
based upon historical and projected consumption such that reasonable possible
near term changes in commodity prices would not result in a material effect on
future earnings, fair values or cash flows of Holdings and Enterprises. Holdings
and Enterprises manage interest rate risk through the strategic use of fixed and
variable rate debt. The interest rate on up to $50 million of variable rate
borrowings is capped by an interest rate protection agreement through April
2000.

Item 8. Financial Statements and Supplementary Data

      Refer to the Index to Financial Statements on page F-1 for the required
information.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

      None.



                                       17
<PAGE>


                                    PART III

Item 10. Directors and Executive Officers of the Registrants

      The directors and executive officers of Holdings and Enterprises, and
where indicated, the senior executive officer of each of Millbrook and
Manischewitz is as set forth in the table below:

Name                                Age     Position
---------------------------------  -----    ------------------------------------

Richard A. Bernstein*               53      Chairman, President, Chief Executive
                                            Officer and Director
Lewis J. Korman*                    55      Vice Chairman and Director
Steven M. Grossman*                 39      Executive Vice President, Chief
                                            Financial Officer, Treasurer and
                                            Director
James A. Cohen, Esq.*               54      Senior Vice President - Legal
                                            Affairs and Secretary and Director
                                            of Enterprises
Ira A. Gomberg*                     56      Senior Vice President
Hal B. Weiss*                       43      Assistant Treasurer
Richard H. Hochman                  54      Director of Holdings
Jenny Morgenthau                    55      Director of Holdings
Michael A. Pietrangelo              58      Director of Holdings

Senior executive officer of Millbrook:

         Robert A. Sigel            46      President and Chief Executive
                                            Officer of Millbrook and Director of
                                            Holdings

Senior executive officer of Manischewitz:

         Dennis M. Newnham          59      President and Chief Executive
                                            Officer of Manischewitz and Director
                                            of Holdings

*     Titles of these individuals are the same for Holdings and Enterprises
      unless otherwise specified.

      Richard A. Bernstein has served as Chairman, President and Chief Executive
Officer of Holdings and Enterprises and as a director of Enterprises since its
inception in March, 1998 and of Holdings since its inception in May, 1996. In
addition to his positions with Holdings and Enterprises, Mr. Bernstein is a
member of the Board of Directors and Chairman of Millbrook and is the Chairman
and Manager of Manischewitz. Mr. Bernstein is Chairman and Manager of RABCO
Luxury Holdings LLC, a New York limited liability company ("RABCO"), a
diversified holding entity for luxury products, which has the exclusive right,
through its subsidiaries, to distribute Breguet(R) watches and timepieces and
several other watch brands in the United States, Canada, Mexico, Central and
South America, and throughout the Caribbean. Mr. Bernstein is also President of
P&E Properties, Inc., a private commercial real estate ownership/management
company of which Mr. Bernstein is the sole shareholder. Mr. Bernstein was the
Chairman and Chief Executive Officer and a director of Western Publishing Group,
Inc. from 1984 to May 1996. Mr. Bernstein also served as Chairman of the Board
and Chief Executive Officer of RABCO Health Services, Inc. and General Medical
Corporation, a medical and surgical supply distribution company, from April 1987
through August 1993, and Chairman and Chief Executive Officer of Harris
Wholesale Company, a pharmaceutical and health and beauty care distribution
company, from 1989 through May 1992. Mr. Bernstein devotes substantial time to
other business and charitable activities.



                                       18
<PAGE>


      Lewis J. Korman has been Vice Chairman of Holdings and Enterprises since
their inception and is a director of Holdings and Enterprises. Mr. Korman is
also an advisor to and an equity owner of a non-affiliated company engaged in
the marketing and distribution of products designed to enhance wellness and
beauty. Mr. Korman is also a member of the Board of Managers and an equity owner
of a non-affiliated company which provides, through on-line and traditional
publishing channels, preparation and testing for (i) occupations which require
certification, and (ii) students and schools where standardized examinations are
administered for assessment or advancement. He also serves as a consultant to
companies involved in the motion picture industry. Mr. Korman also is involved
in the structuring of entrepreneurial transactions in the entertainment
industry. Prior to joining Holdings in January 1997, Mr. Korman was President
and Chief Operating Officer of Savoy Pictures Entertainment, Inc. from its
founding in 1992 until its merger with Silver King Communications, Inc. in
December 1996. Prior thereto, Mr. Korman was Senior Vice President and Chief
Operating Officer of Columbia Pictures Entertainment, Inc. and Chairman of its
Motion Picture Group until its sale to Sony Corporation at the end of 1989.

      Steven M. Grossman has been Executive Vice President, Chief Financial
Officer and Treasurer and a director of Holdings and Enterprises since their
inception. In addition to his positions with Enterprises and Holdings, Mr.
Grossman is a member of the Board of Directors and Executive Vice President -
Finance and Administration of Millbrook and is a member of the Board of Managers
and the Executive Vice President, Chief Financial Officer and Treasurer of
Manischewitz. Mr. Grossman is also Executive Vice President and Chief Financial
Officer of RABCO and each of its subsidiaries and Chief Financial Officer of P&E
Properties, Inc. Mr. Grossman was Executive Vice President and Chief Financial
Officer of Western Publishing Group, Inc. from June 1994 to May 1996 and Vice
President - Financial Planning of Western Publishing Group, Inc. from July 1992
to June 1994 and of RABCO Health Services, Inc. from July 1992 to August 1993.
Mr. Grossman is a certified public accountant licensed in New York.

      James A. Cohen, Esq. has been Senior Vice President - Legal Affairs and
Secretary of Holdings and Enterprises since their inception and is a director of
Enterprises. In addition to his positions with Enterprises and Holdings, Mr.
Cohen is a member of the Board of Directors and the Senior Vice President -
Legal Affairs of Millbrook and Manischewitz and is a member of Manischewitz'
Board of Managers. Mr. Cohen is also Senior Vice President - Legal Affairs of
RABCO and each of its subsidiaries and a senior executive of P&E Properties,
Inc. Mr. Cohen was Senior Vice President - Legal Affairs and Secretary of
Western Publishing Group, Inc. from 1984 to May 1996 and Senior Vice President -
Legal Affairs and Secretary of RABCO Health Services, Inc. from April 1987
through August 1993.

      Ira A. Gomberg has been Senior Vice President of Holdings and Enterprises
since their inception. In addition to his position with Holdings and
Enterprises, Mr. Gomberg is a Senior Vice President of Millbrook and
Manischewitz. Mr. Gomberg is also Senior Vice President of RABCO and each of its
subsidiaries and a senior executive of P&E Properties, Inc. Mr. Gomberg was
Senior Vice President of Western Publishing Group, Inc. from 1986 to May 1996
and Senior Vice President of RABCO Health Services, Inc. from April 1987 through
August 1993.

      Hal B. Weiss has been Assistant Treasurer of Holdings and Enterprises
since their inception. In addition to his position with Holdings and
Enterprises, Mr. Weiss is a Vice President and Assistant Treasurer of Millbrook
and Manischewitz. Mr. Weiss is also the Assistant Treasurer of RABCO and each of
its subsidiaries and Controller of P&E Properties, Inc. Mr. Weiss served as
Assistant Treasurer of Western Publishing Group, Inc. from 1990 through May 1996
and Assistant Treasurer of RABCO Health Services, Inc. from April 1987 through
August 1993. Mr. Weiss is a certified public accountant licensed in New York.



                                       19
<PAGE>


      Richard H. Hochman is Chairman of Regent Capital Management Corp. a
private investment company, making equity and mezzanine investments in
companies, and has served in that capacity since April 1995. From 1990 through
April 1995, he was a Managing Director of the Corporate Finance Department of
Paine Webber Incorporated and served as a member of its Debt and Equity
Commitment Committees. Prior to joining PaineWebber, Mr. Hochman served as a
Managing Director of Drexel Burnham Lambert, Inc. from 1984 through 1990. Mr.
Hochman also serves on the Board of Directors of Cablevision Systems Corp. and
Evercom, Inc.

      Jenny Morgenthau has been Chief Executive Officer of The Fresh Air Fund,
one of New York's preeminent charitable corporations, since 1983. Prior to
joining The Fresh Air Fund, Ms. Morgenthau worked for New York City's Special
Services for Children, the Department of City Planning and the New York State
Urban Development Corporation. Ms. Morgenthau serves on the board of directors
of a number of charitable and cultural organizations.

      Michael A. Pietrangelo is of Counsel in the Memphis, Tennessee law firm of
Pietrangelo Cook PLC, which he joined in February 1998. Previously, Mr.
Pietrangelo was President of Johnson Products Co., a subsidiary of IVAX
Corporation that manufactured and sold cosmetic and health and beauty care
products, principally intended for the African-American consumer. Mr.
Pietrangelo also has held a number of executive positions in the consumer
products industry at Schering-Plough Corporation, including President of the
Personal Care Products Group, and has served as President and Chief Operating
Officer of Western Publishing Group, Inc. and President and Chief Executive
Officer of Cleo, Inc., a subsidiary of Gibson Greetings, Inc.

      Robert A. Sigel has been President, Chief Executive Officer and director
of Millbrook since it was acquired by Holdings from McKesson in March 1997. Mr.
Sigel became a director of Holdings in March 1999. Mr. Sigel has been associated
with Millbrook's business since 1977, having served as Vice President, Sales and
Merchandising, Executive Vice President, President and Chief Executive Officer
of Millbrook Distributors, Inc. and President and Chief Executive Officer of the
service merchandising division of McKesson, which became the current Millbrook.
From 1995 through March 1997, Mr. Sigel also served as a Corporate Vice
President of McKesson and on McKesson's Management Board.

      Dennis M. Newnham has been President and Chief Executive Officer of
Manischewitz since January 1999. Mr. Newnham became a director of Holdings in
March 1999. Previously, Mr. Newnham was the President and Chief Executive
Officer of Tsumura International, a manufacturer of personal care and fragrance
products and served in such capacities from March 1996 through December 1998. In
1995, Mr. Newnham served as Chairman, President and Chief Executive Officer of
Adirondack Beverages, Inc., one of the largest independent soft drink bottlers
in the Northeast. From April 1983 through March 1994, Mr. Newnham served as
Chairman, President and Chief Executive Officer of Lea & Perrins, Inc., a
specialty foods company. Mr. Newnham also serves as a member of the Board of
Directors of United Water Resources and NutraMax Products, Inc.

Item 11. Executive Compensation

      The following table sets forth the compensation earned or paid, including
deferred compensation of the Chief Executive Officer and the most highly
compensated executive officers of Holdings, Enterprises, Millbrook and
Manischewitz for services rendered for each of the fiscal years indicated.



                                       20
<PAGE>


      None of Holdings, Enterprises, Millbrook or Manischewitz pays a salary to
Mr. Bernstein. Enterprises reimburses P&E Properties, Inc. ("P&E Properties")
for personal services, including executive services rendered by certain of its
executive officers. Although Mr. Bernstein does not receive any salary from P&E
Properties, a portion of these amounts may be deemed indirect compensation to
Mr. Bernstein. See "Certain Relationships and Related Transactions - Related
Party Transactions" on page 24.

      None of Holdings, Enterprises, Millbrook or Manischewitz pays a salary to
Messrs. Grossman or Cohen. Messrs. Grossman and Cohen receive a salary from P&E
Properties for executive services rendered to Holdings and Enterprises.

<TABLE>
<CAPTION>
                                                                       Annual Compensation               Long-Term Compensation
                                                                       -------------------               ----------------------
                                                                                                     Other Annual
                                                                                                     Compensation       Options/SARs

Name and Principal Position                        Year            Salary ($)         Bonus ($)           ($)                (#)
---------------------------                        ----            ----------         ---------          -----              -----

<S>                                                <C>            <C>               <C>               <C>               <C>
Holdings and Enterprises

Richard A. Bernstein                               2000           $         --      $       --        $      --             --
      Chairman, President and Chief                1999           $         --      $       --        $      --             --
      Executive Officer                            1998           $         --      $       --        $      --             --

Steven M. Grossman                                 2000           $    243,750      $       --        $   5,460             --
      Executive Vice President,                    1999           $    225,000      $       --        $   5,040             --
      Chief Financial Officer and                  1998           $    178,750      $       --        $   5,060             --
      Treasurer

James A. Cohen                                     2000           $    192,000      $       --        $   5,040             --
      Senior Vice President - Legal                1999           $    160,000      $       --        $   4,200             --
      Affairs                                      1998           $    120,000      $       --        $   3,680             --

Millbrook

Robert A. Sigel                                    2000           $    391,619      $       --        $   9,771             --
      Chief Executive Officer                      1999           $    368,319      $       --        $   9,548             --
      and President of Millbrook                   1998           $    355,623      $   82,330 (1)    $   8,228 (2)         --

Manischewitz

Dennis M. Newnham                                  2000           $    426,146      $       --        $   4,044             --
      Chief Executive Officer                      1999           $     97,500(3)   $       --        $      --             --
      and President of Manischewitz
</TABLE>

(1)   During the year ended March 31, 1998, Mr. Sigel was paid a bonus of
      $82,330 which was earned during the year ended March 31, 1997.
(2)   Other Annual Compensation excludes any amounts paid to Mr. Sigel, in his
      capacity as a Corporate Vice President of McKesson Corporation.
(3)   Mr. Newnham became Chief Executive Officer and President of Manischewitz
      in January 1999.



                                       21
<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management

      The following table contains, as of March 31, 2000, information regarding
the beneficial ownership of the common stock and preferred stock of Holdings:

      (1)   by each person who is known by Holdings to own beneficially more
            than 5% of the outstanding shares of common stock or preferred stock
            of Holdings;

      (2)   by each of the directors and executive officers of Holdings; and

      (3)   by all directors and executive officers of Holdings as a group.

      Based on information furnished by those owners, we believe that the
beneficial owners of the securities listed below have investment and voting
power for all the shares of common stock and preferred stock of Holdings shown
as being beneficially owned by them. The securities are subject to the voting
agreement described under the heading "Certain Relationships and Related
Transactions--Voting Agreement" on page 23. Holdings owns 200 shares of the
common stock of Enterprises, which represents all of the issued and outstanding
capital stock of Enterprises.


<TABLE>
<CAPTION>
                                                                                                            Percentage of
                                                Number of Shares of   Percentage of   Number of Shares of  Total Shares of
                                                  Common Stock of    Total Shares of  Series A Preferred      Series A
Name of                                              Holdings        Common Stock of   Stock of Holdings   Preferred Stock
Beneficial Owner                                Beneficially Owned       Holdings     Beneficially Owned     of Holdings
----------------                                ------------------       --------     ------------------     -----------

<S>                                             <C>                  <C>              <C>                  <C>
Richard A. Bernstein...........................          42,500             40.4%               12,500           50.0%
Robert A. Sigel................................           6,600              6.3                   250            1.0
James A. Cohen, Esq............................           3,610              3.4                   150             .6
Steven M. Grossman.............................           3,490              3.3                   100             .4
Lewis J. Korman................................           3,450              3.3                   500            2.0
Dennis M. Newnham..............................           3,000              2.9                    --             --
Ira A. Gomberg.................................           2,850              2.7                   250            1.0
Hal B. Weiss...................................           1,460              1.4                   150             .6
Richard H. Hochman.............................           1,200              1.1                   500            2.0
Michael A. Pietrangelo.........................             360               .3                   150             .6
Jenny Morgenthau...............................             300               .3                   125             .5
All directors and executive
officers as a group (11 persons)...............          68,820             65.5%               14,675           58.7%


<CAPTION>
                                                 Number of Shares     Percentage of
                                                    of Series B      Total Shares of
                                                Preferred Stock of      Series B
Name of                                              Holdings        Preferred Stock
Beneficial Owner                                Beneficially Owned     of Holdings
----------------                                ------------------     -----------

<S>                                             <C>                  <C>
Richard A. Bernstein...........................           1,000          100.0%
Robert A. Sigel................................
James A. Cohen, Esq............................
Steven M. Grossman.............................
Lewis J. Korman................................
Dennis M. Newnham..............................
Ira A. Gomberg.................................
Hal B. Weiss...................................
Richard H. Hochman.............................
Michael A. Pietrangelo.........................
Jenny Morgenthau...............................
All directors and executive
officers as a group (11 persons)...............           1,000          100.0%
</TABLE>




                                       22
<PAGE>


Name of                               Address of
Beneficial Owner                      Beneficial Owner
----------------                      ----------------

Richard A. Bernstein
James A. Cohen, Esq.
Steven M. Grossman
Lewis J. Korman
Ira A. Gomberg
Hal B. Weiss........................  R.A.B. Holdings, Inc.
                                      444 Madison Avenue, Suite 601
                                      New York, New York 10022

Robert A. Sigel.....................  Millbrook Distribution Services Inc.
                                      Route 56
                                      88 Huntoon Memorial Highway
                                      Leicester, Massachusetts 01524

Dennis M. Newnham...................  The B. Manischewitz Company, LLC
                                      One Manischewitz Plaza
                                      Jersey City, New Jersey 07302

Richard H. Hochman..................  Regent Capital Management Corp.
                                      505 Park Avenue, 17th Floor
                                      New York, New York 10022

Michael A. Pietrangelo..............  Pietrangelo Cook PLC
                                      International Plaza
                                      6410 Poplar, Suite 190
                                      Memphis, Tennessee 38119

Jenny Morgenthau....................  The Fresh Air Fund
                                      1040 Avenue of the Americas
                                      New York, New York 10018

Item 13. Certain Relationships and Related Transactions

Voting Agreement

      Mr. Bernstein is a party to a voting agreement with each of the holders of
the series A preferred stock and common stock of Holdings. Under the voting
agreement these stockholders agreed to vote all of their shares of series A
preferred stock and common stock as Mr. Bernstein directs or, if Mr. Bernstein
does not give direction, in a manner consistent with the manner in which he
votes his shares of series A preferred stock and common stock. The voting
agreement also provides that the stockholders shall execute any written consent
of holders of series A preferred stock or common stock as Mr. Bernstein directs
or, if Mr. Bernstein does not give direction, in a manner which is consistent
with his vote or written consent on the matter. Pursuant to the voting
agreement, the stockholders have agreed not to execute any other consent of
holders of series A preferred stock or common stock.



                                       23
<PAGE>


      In the event that a stockholder fails to comply with the voting provisions
above, Mr. Bernstein holds a proxy to vote the stockholder's shares or execute a
written consent in any manner as he may determine in his discretion. Under the
voting agreement, Mr. Bernstein shall not be liable to any stockholder or anyone
making a claim under that stockholder as a result of any vote or the exercise of
any proxy by Mr. Bernstein. This is true even if that vote or exercise of proxy
adversely affects, or results in the decrease in the value of, such
stockholder's shares.

      The voting agreement shall terminate on the earliest of (i) the date a
stockholder, and that stockholder's heirs, personal representatives, donees and
trustees of any trusts in which that stockholder has an interest, during the
stockholder's life or when he or she dies, ceases to own any of the shares of
Holdings; (ii) the date on which the common stock of Holdings is listed or
admitted to trade on any national securities exchange or is quoted on the NASDAQ
system or similar means; and (iii) 10 years from the date of the voting
agreement.

Related Party Transactions

      At the time of the acquisition of Millbrook by Holdings and the
acquisition of Manischewitz by Enterprises, Millbrook and Manischewitz entered
into separate arrangements with P&E Properties, an entity of which Mr. Bernstein
is the sole shareholder. In these arrangements, Millbrook agreed to pay a
quarterly management fee of $100,000 and Millbrook and Manischewitz agreed to
reimburse P&E Properties for reasonable services and out-of-pocket and other
expenses incurred on Millbrook's and Manischewitz' behalf. These services
include among other things, treasury, cash management, certain financial
reporting, legal, labor and lease negotiation and employee benefits
administration. For the year ended March 31, 2000, P&E Properties was (i) paid
$400,000 in management fees by Millbrook; (ii) reimbursed $875,000 for
reasonable services provided to Millbrook; and (iii) reimbursed approximately
$428,000 for reasonable services provided to Manischewitz.

      Enterprises reimburses P&E Properties for personal services, including
executive services, rendered by certain of its executive officers. Mr. Bernstein
does not receive a salary from P&E Properties. Messrs. Grossman and Cohen
receive a salary from P&E Properties for executive services rendered to
Holdings, Enterprises, Millbrook and Manischewitz. The reasonable services
provided are based upon (i) the number of hours incurred at the applicable pay
rate; and (ii) out-of-pocket expenses, related to the services provided. In
addition, in fiscal 2000, Millbrook and Manischewitz reimbursed P&E Properties
approximately $97,000 and $16,000, respectively for use of an airplane owned by
P&E Properties. When commercial flights were reasonably available to the
destination, the reimbursement was determined at the rate of the normal first
class fare. When commercial flights were not available, the reimbursement amount
was equal to the hourly variable costs of the airplane multiplied by the number
of hours of use.

      In the opinion of management, these methodologies provided a reasonable
basis for such allocations. In addition, each of Holdings, Enterprises,
Millbrook and Manischewitz believe that the terms of the arrangement with P&E
Properties were no less favorable than could have been obtained from
unaffiliated third parties on an arm's length basis.

      At March 31, 2000, Dennis M. Newnham, the Chief Executive Officer and
President of Manischewitz, had an outstanding loan with Holdings in the amount
of $76,300 related to his equity interest in Holdings.



                                       24
<PAGE>


Shareholders Agreements

      Each employee of Millbrook or Manischewitz who owns shares of the common
stock of Holdings is a party to a shareholders agreement with Holdings. These
agreements prohibit transfer of such shares other than to a member of the
employee shareholder's immediate family or a trustee of a trust for the benefit
of the employee shareholder or his immediate family. In the event of the
termination of such employee, Holdings has the option or obligation, under
certain circumstances, to purchase all the employee shareholder's shares at
prices not greater than their fair market value.




                                       25
<PAGE>


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

      (a)   1.    The financial statements listed in the accompanying Index to
                  Financial Statements and Schedules are filed as part of this
                  report.
            2.    The exhibits listed in the accompanying Index to Exhibits are
                  filed as part of this report.
      (b)   Reports on Form 8-K filed in Fourth Quarter of fiscal 2000.
                  None.
      (c)   Index to Exhibits.
            Exhibit No. Description of Document
            ----------- -----------------------

            2.1         Purchase Agreement dated as of March 3, 1998 among
                        R.A.B. Food Holdings, Inc., MANO Holdings I, LLC, KBMC
                        Acquisition Company, L.P., MANO Holdings Corporation and
                        the stockholders of MANO Holdings Corporation
                        (incorporated by reference to Exhibit 2.1 to the
                        Registrants' Registration Statement No. 333-66221 on
                        Form S-4, filed on October 28, 1998 (the "Registration
                        Statement")).

            3.1         Certificate of Incorporation of R.A.B. Holdings, Inc.
                        (incorporated by reference to Exhibit 3.1 to the
                        Registration Statement).

            3.2         Certificate of Amendment of Certificate of Incorporation
                        of R.A.B. Holdings, Inc. (incorporated by reference to
                        Exhibit 3.2 to the Registration Statement).

           *3.2.1       Certificate of Designation of R.A.B. Holdings, Inc. for
                        the Series A Preferred Stock.

           *3.2.2       Certificate of Designation of R.A.B. Holdings, Inc. for
                        the Series B Preferred Stock.

            3.3         Bylaws of R.A.B. Holdings, Inc. (incorporated by
                        reference to Exhibit 3.3 to the Registration Statement).

            3.4         Certificate of Incorporation of R.A.B. Enterprises, Inc.
                        (incorporated by reference to Exhibit 3.4 to the
                        Registration Statement).

            3.5         Amendment of Certificate of Incorporation of R.A.B.
                        Enterprises, Inc. (incorporated by reference to Exhibit
                        3.5 to the Registration Statement).

            3.6         Bylaws of R.A.B. Enterprises, Inc. (incorporated by
                        reference to Exhibit 3.6 to the Registration Statement).

            3.7         Certificate of Incorporation of Millbrook Distribution
                        Services Inc. (incorporated by reference to Exhibit 3.7
                        to the Registration Statement).

            3.8         Bylaws of Millbrook Distribution Services Inc.
                        (incorporated by reference to Exhibit 3.8 to the
                        Registration Statement).



                                       26
<PAGE>

            Exhibit No. Description of Document
            ----------- -----------------------

            3.9         Certificate of Formation of The B. Manischewitz Company,
                        LLC (incorporated by reference to Exhibit 3.9 to the
                        Registration Statement).

            3.10        Operating Agreement of The B. Manischewitz Company, LLC
                        (incorporated by reference to Exhibit 3.10 to the
                        Registration Statement).

            4.1         Indenture, dated as of May 1, 1998, among R.A.B.
                        Holdings, Inc. and PNC Bank, National Association, as
                        Trustee, relating to the Holdings Notes (incorporated by
                        reference to Exhibit 4.1 to the Registration Statement).

            4.2         Form of Old Holdings Note (included as Exhibit A to
                        Exhibit 4.1 to the Registration Statement) (incorporated
                        by reference to Exhibit 4.2 to the Registration
                        Statement).

            4.3         Form of New Holdings Note (included as Exhibit B to
                        Exhibit 4.1 to the Registration Statement) (incorporated
                        by reference to Exhibit 4.3 to the Registration
                        Statement).

            4.4         Indenture, dated as of May 1, 1998, among R.A.B.
                        Enterprises, Inc. and PNC Bank, National Association, as
                        Trustee, relating to the Old Enterprises Notes
                        (incorporated by reference to Exhibit 4.4 to the
                        Registration Statement).

            4.5         Form of Old Enterprises Note (included as Exhibit A to
                        Exhibit 4.4 hereto) (incorporated by reference to
                        Exhibit 4.5 to the Registration Statement).

            4.6         Form of New Enterprises Note (included as Exhibit B to
                        Exhibit 4.4 hereto) (incorporated by reference to
                        Exhibit 4.6 to the Registration Statement).

            4.7         Exchange and Registration Rights Agreement, dated as of
                        May 1, 1998 between Holdings and Chase Securities Inc.
                        relating to the Old Holdings Notes (incorporated by
                        reference to Exhibit 4.7 to the Registration Statement).

            4.8         Exchange and Registration Rights Agreement, dated as of
                        May 1, 1998 among Enterprises, the Guarantors named
                        therein and Chase Securities Inc. relating to the Old
                        Enterprises Notes (incorporated by reference to Exhibit
                        4.8 to the Registration Statement).

            4.9         Purchase Agreement, dated April 28, 1998 among Holdings,
                        Enterprises, Millbrook and Chase Securities, Inc.
                        (incorporated by reference to Exhibit 4.9 to the
                        Registration Statement).

            9.1         Form of Voting Agreement (incorporated by reference to
                        Exhibit 9.1 to Amendment No. 1 to the Registration
                        Statement, filed on December 29, 1998).



                                       27
<PAGE>


            Exhibit No. Description of Document
            ----------- -----------------------

            10.1        Credit Agreement, dated as of May 1, 1998 among
                        Millbrook, Manischewitz, the Lenders party thereto, The
                        Chase Manhattan Bank, as administrative and collateral
                        agent for the Lenders, and NationsBank, N.A., as
                        Co-Agent and Documentation Agent (the "Amended and
                        Restated Credit Agreement") (incorporated by reference
                        to Exhibit 10.1 to the Registration Statement).

            10.1.1      Amendment dated as of February 8, 1999 to the Amended
                        and Restated Credit Agreement, dated as of May 1, 1998.
                        (incorporated by reference to Exhibit 10.1.1 to the
                        Registrants' Annual Report on Form 10-K for the fiscal
                        year 1999 (the "1999 Form 10-K")).

            10.1.2      Amendment dated as of February 19, 1999 to the Amended
                        and Restated Credit Agreement, dated as of May 1, 1998.
                        (incorporated by reference to Exhibit 10.1.2 to the 1999
                        Form 10-K).

            10.1.3      Amendment dated as of March 24, 1999 to the Amended and
                        Restated Credit Agreement, dated as of May 1, 1998.
                        (incorporated by reference to Exhibit 10.1.3 to the 1999
                        Form 10-K).

           *10.1.4      Amendment dated as of April 5, 1999 to the Amended and
                        Restated Credit Agreement, dated as of May 1, 1998.

           *10.1.5      Amendment dated as of January 31, 2000 to the Amended
                        and Restated Credit Agreement, dated as of May 1, 1998.

            10.2        Stock Purchase Agreement dated as of February 21, 1997
                        between R.A.B. Holdings, Inc. and McKesson Corporation
                        (incorporated by reference to Exhibit 10.2 to Amendment
                        No. 1 to the Registration Statement, filed on December
                        29, 1998).

            21.1        List of subsidiaries of the Co-Registrants (incorporated
                        by reference to Exhibit 21.1 to the Registration
                        Statement).

           *27.1        Financial Data Schedule of R.A.B. Holdings, Inc.

           *27.2        Financial Data Schedule of R.A.B. Enterprises, Inc.

           *Filed herewith.

      (d)   Financial Statement Schedules.
            The financial statements schedules are listed in the accompanying
            Index to Financial Statements and Schedules.



                                       28
<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of New York, state of New York on the 6th day of July, 2000.

                                    R.A.B HOLDINGS, INC.


                                    /s/ Richard A. Bernstein
                                    ------------------------------------------
                                    Richard A. Bernstein, President
                                    and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

<TABLE>
<S>                           <C>                                               <C>
/s/ Richard A. Bernstein      Chairman, President, Chief Executive Officer      July 6, 2000
---------------------------   and Director
Richard A. Bernstein             (principal executive officer)

/s/ Steven M. Grossman        Executive Vice President, Chief Financial         July 6, 2000
---------------------------   Officer, Treasurer and Director
Steven M. Grossman               (principal financial and accounting officer)

/s/ Lewis J. Korman           Vice Chairman and Director                        July 6, 2000
---------------------------
Lewis J. Korman

/s/ Robert A. Sigel           Director                                          July 6, 2000
---------------------------
Robert A. Sigel

/s/ Dennis M. Newnham         Director                                          July 6, 2000
---------------------------
Dennis M. Newnham

/s/ Richard H. Hochman        Director                                          July 6, 2000
---------------------------
Richard H. Hochman

/s/ Jenny Morgenthau          Director                                          July 6, 2000
---------------------------
Jenny Morgenthau

/s/ Michael A. Pietrangelo    Director                                          July 6, 2000
---------------------------
Michael A. Pietrangelo
</TABLE>



Supplemental information to be furnished with reports filed pursuant to Section
15(d) of the Act by registrants which have not registered securities pursuant to
Section 12 of the Act.

No annual report or proxy material has been sent to security holders of each
registrant.



                                       29
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of New
York, state of New York on the 6th day of July, 2000.

                                    R.A.B ENTERPRISES, INC.


                                    /s/ Richard A. Bernstein
                                    ------------------------------------------
                                    Richard A. Bernstein, President
                                    and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

<TABLE>
<S>                           <C>                                               <C>
/s/ Richard A. Bernstein      Chairman, President, Chief Executive Officer      July 6, 2000
---------------------------   and Director
Richard A. Bernstein             (principal executive officer)

/s/ Steven M. Grossman        Executive Vice President, Chief Financial         July 6, 2000
---------------------------   Officer, Treasurer and Director
Steven M. Grossman               (principal financial and accounting officer)

/s/ Lewis J. Korman           Vice Chairman and Director                        July 6, 2000
---------------------------
Lewis J. Korman

/s/ James A. Cohen            Senior Vice President - Legal Affairs,            July 6, 2000
---------------------------   Secretary and Director
James A. Cohen
</TABLE>



Supplemental information to be furnished with reports filed pursuant to Section
15(d) of the Act by registrants which have not registered securities pursuant to
Section 12 of the Act.

No annual report or proxy material has been sent to security holders of each
registrant.



                                       30
<PAGE>



                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>
Financial Statements                                                                                                   Page
--------------------                                                                                                   ----

<S>                                                                                                                    <C>
Consolidated Financial Statements of R.A.B. Holdings, Inc. And Subsidiaries and
     R.A.B. Enterprises, Inc. And Subsidiaries
   Independent Auditors' Report...............................................................................          F-2
   Consolidated Balance Sheets as of March 31, 2000 and 1999..................................................          F-3
   Consolidated Statements of Operations for the Years Ended
      March 31, 2000, 1999 and 1998...........................................................................          F-4
   Consolidated Statements of Stockholders' Equity (Holdings) for the Years Ended
      March 31, 2000, 1999 and 1998...........................................................................          F-5
   Consolidated Statements of Stockholder's Equity (Enterprises) for the Years Ended
      March 31, 2000, 1999 and 1998...........................................................................          F-6
   Consolidated Statements of Cash Flows for the Years Ended
      March 31, 2000, 1999 and 1998...........................................................................          F-7
   Notes to Consolidated Financial Statements.................................................................          F-8

   Schedules
   ---------

     I - Condensed Financial Information of Registrants.......................................................          S-1
     II - Valuation and Qualifying Accounts...................................................................          S-5
</TABLE>


      Schedules which are not included have been omitted because either they are
not required or are not applicable or because the required information has been
included elsewhere in the consolidated financial statements or notes thereto.



                                      F-1
<PAGE>



                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
R.A.B. Holdings, Inc.
New York, New York

To the Board of Directors and Stockholder of
R.A.B. Enterprises, Inc.
New York, New York

We have audited the accompanying consolidated financial statements and financial
statement schedules of R.A.B. Holdings, Inc. and subsidiaries and R.A.B.
Enterprises, Inc. (a wholly-owned subsidiary of R.A.B. Holdings, Inc.) and
subsidiaries listed in the foregoing index. These financial statements and
financial statement schedules are the responsibility of the companies'
management. Our responsibility is to express an opinion on the financial
statements and financial statement schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial positions of R.A.B. Holdings, Inc. and
subsidiaries and R.A.B. Enterprises, Inc. and subsidiaries as of March 31, 2000
and 1999, and the results of their operations and cash flows for each of the
three years in the period ended March 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.




DELOITTE & TOUCHE LLP

June 27, 2000
New York, New York



                                      F-2
<PAGE>


R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands except for share and per share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
March 31,                                                                                                      2000
-----------------------------------------------------------------------------------------------  -------------------------------
                                                                                                    Holdings       Enterprises
                                                                                                 --------------   --------------
                                            ASSETS
<S>                                                                                              <C>              <C>
Current assets:
        Cash                                                                                     $       4,637    $       4,618
        Accounts receivable                                                                             54,985           54,985
        Inventories                                                                                     65,286           65,286
        Restricted investments                                                                           3,145                -
        Other current assets                                                                             5,757            6,805
                                                                                                 --------------   --------------
                Total current assets                                                                   133,810          131,694
Noncurrent assets:
        Restricted investments                                                                           1,582                -
        Other assets                                                                                    13,158           12,178
                                                                                                 --------------   --------------
                Total noncurrent assets                                                                 14,740           12,178
Property, plant and equipment, net                                                                      37,199           37,199
Intangibles, net                                                                                       104,259          104,259
                                                                                                 --------------   --------------

Total assets                                                                                     $     290,008    $     285,330
                                                                                                 ==============   ==============
                             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
        Current maturities of long-term debt                                                     $       1,946    $       1,946
        Accounts payable                                                                                50,581           50,581
        Other current liabilities                                                                       26,734           24,101
                                                                                                 --------------   --------------
                Total current liabilities                                                               79,261           76,628
Noncurrent liabilities:
        Long-term debt                                                                                 168,143          143,143
        Deferred compensation                                                                            9,319            9,319
        Deferred income taxes                                                                            9,539            9,539
        Other liabilities                                                                                4,998            4,998
                                                                                                 --------------   --------------
Total noncurrent liabilities                                                                           191,999          166,999

Commitments and contingencies

Stockholders' equity:
        Preferred stock, $500 par value, 100,000 shares authorized,
                24,875 and 20,000 shares of Series A issued and
                outstanding at March 31, 2000 and March 31, 1999, respectively                          12,344                -
                1,000 shares of Series B issued and outstanding
                at March 31, 2000                                                                          500                -
        Common stock, $.01 and $1.00 par value, 1,000,000 shares
                and 200 shares authorized, issued 105,100 shares and
                200 shares at March 31, 2000 and 104,100 shares and
                200 shares at March 31, 1999, respectively                                                   1                -
        Additional paid-in capital                                                                         428           39,482
        Retained earnings (deficit)                                                                      5,317            2,062
        Accumulated other comprehensive income                                                             159              159
                                                                                                 --------------   --------------
                                                                                                        18,749           41,703
        Less common stock in treasury - 700 shares                                                           1                -
                                                                                                 --------------   --------------
                Total stockholders' equity                                                              18,748           41,703
                                                                                                 --------------   --------------

Total liabilities and stockholders' equity                                                       $     290,008    $     285,330
                                                                                                 ==============   ==============

<CAPTION>
March 31,                                                                                                      1999
-----------------------------------------------------------------------------------------------  ------------------------------
                                                                                                    Holdings      Enterprises
                                                                                                 --------------  --------------
                                            ASSETS
<S>                                                                                              <C>             <C>
Current assets:
        Cash                                                                                     $       2,088   $       2,078
        Accounts receivable                                                                             52,989          52,989
        Inventories                                                                                     62,061          62,061
        Restricted investments                                                                           5,805               -
        Other current assets                                                                            12,304          10,512
                                                                                                 --------------  --------------
                Total current assets                                                                   135,247         127,640
Noncurrent assets:
        Restricted investments                                                                           8,880               -
        Other assets                                                                                    14,935          13,268
                                                                                                 --------------  --------------
                Total noncurrent assets                                                                 23,815          13,268
Property, plant and equipment, net                                                                      38,467          38,467
Intangibles, net                                                                                       100,078         100,078
                                                                                                 --------------  --------------

Total assets                                                                                     $     297,607   $     279,453
                                                                                                 ==============  ==============
                             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
        Current maturities of long-term debt                                                     $       1,291   $       1,291
        Accounts payable                                                                                56,530          56,530
        Other current liabilities                                                                       26,138          23,437
                                                                                                 --------------  --------------
                Total current liabilities                                                               83,959          81,258
Noncurrent liabilities:
        Long-term debt                                                                                 182,758         134,758
        Deferred compensation                                                                            9,095           9,095
        Deferred income taxes                                                                            8,860           8,860
        Other liabilities                                                                                8,304           8,304
                                                                                                 --------------  --------------
Total noncurrent liabilities                                                                           209,017         161,017

Commitments and contingencies

Stockholders' equity:
        Preferred stock, $500 par value, 100,000 shares authorized,
                24,875 and 20,000 shares of Series A issued and
                outstanding at March 31, 2000 and March 31, 1999, respectively                           9,906               -
                1,000 shares of Series B issued and outstanding
                at March 31, 2000                                                                            -               -
        Common stock, $.01 and $1.00 par value, 1,000,000 shares
                and 200 shares authorized, issued 105,100 shares and
                200 shares at March 31, 2000 and 104,100 shares and
                200 shares at March 31, 1999, respectively                                                   1               -
        Additional paid-in capital                                                                         332          39,482
        Retained earnings (deficit)                                                                     (5,748)         (2,444)
        Accumulated other comprehensive income                                                             140             140
                                                                                                 --------------  --------------
                                                                                                         4,631          37,178
        Less common stock in treasury - 700 shares                                                           -               -
                                                                                                 --------------  --------------
                Total stockholders' equity                                                               4,631          37,178
                                                                                                 --------------  --------------

Total liabilities and stockholders' equity                                                       $     297,607   $     279,453
                                                                                                 ==============  ==============
</TABLE>

                 See notes to Consolidated Financial Statements


                                      F-3
<PAGE>


R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the years ended March 31,                                               2000                              1999
------------------------------------------------------------- --------------------------------   --------------------------------
                                                                  Holdings       Enterprises        Holdings        Enterprises
                                                              ---------------   --------------   --------------   ---------------


<S>                                                           <C>               <C>              <C>              <C>
Revenues                                                      $      580,616    $     580,570    $     508,293    $      508,293

Costs and expenses:
        Cost of sales                                                443,390          443,390          385,536           385,536
        Selling                                                       48,305           48,305           48,115            48,115
        Distribution and warehousing                                  45,224           45,224           38,067            38,067
        General and administrative                                    24,646           24,625           23,861            23,861
        Amortization of intangibles                                    3,086            3,086            2,790             2,790
                                                              ---------------   --------------   --------------   ---------------

                Total costs and expenses                             564,651          564,630          498,369           498,369
                                                              ---------------   --------------   --------------   ---------------



Operating income                                                      15,965           15,940            9,924             9,924


Interest expense, net                                                 18,960           15,888           20,020            14,949
                                                              ---------------   --------------   --------------   ---------------


(Loss) income before (benefit) provision for income taxes             (2,995)              52          (10,096)           (5,025)


(Benefit) provision for income taxes                                  (1,146)             288           (3,174)           (1,399)
                                                              ---------------   --------------   --------------   ---------------


(Loss) income before extraordinary item                               (1,849)            (236)          (6,922)           (3,626)


Extraordinary gain on early extinguishment of debt,
        net of income taxes of $8.5 million and
        $3.1 million, respectively                                    12,914            4,742                -                 -
                                                              ---------------   --------------   --------------   ---------------


Net income (loss)                                             $       11,065    $       4,506    $      (6,922)   $       (3,626)
                                                              ===============   ==============   ==============   ===============


<CAPTION>
For the years ended March 31,                                               1998
------------------------------------------------------------- --------------------------------
                                                                 Holdings        Enterprises
                                                              ---------------   --------------


<S>                                                           <C>               <C>
Revenues                                                      $      470,201    $     470,201

Costs and expenses:
        Cost of sales                                                360,162          360,162
        Selling                                                       43,766           43,766
        Distribution and warehousing                                  37,339           37,339
        General and administrative                                    21,559           21,551
        Amortization of intangibles                                        -                -
                                                              ---------------   --------------

                Total costs and expenses                             462,826          462,818
                                                              ---------------   --------------



Operating income                                                       7,375            7,383


Interest expense, net                                                  5,079            5,079
                                                              ---------------   --------------


(Loss) income before (benefit) provision for income taxes              2,296            2,304


(Benefit) provision for income taxes                                   1,122            1,122
                                                              ---------------   --------------


(Loss) income before extraordinary item                                1,174            1,182


Extraordinary gain on early extinguishment of debt,
        net of income taxes of $8.5 million and
        $3.1 million, respectively                                         -                -
                                                              ---------------   --------------


Net income (loss)                                             $        1,174    $       1,182
                                                              ===============   ==============
</TABLE>


                 See notes to Consolidated Financial Statements

                                      F-4
<PAGE>


R.A.B. HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands except for share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the years ended March 31,                                                   2000                              1999
----------------------------------------------------------------   -------------------------------   -------------------------------
                                                                       Shares          Amounts           Shares          Amounts
                                                                   --------------   --------------   --------------   --------------
<S>                                                                <C>              <C>              <C>              <C>
Preferred stock, $500 par value, 100,000
   shares authorized:
        Series A:
                Balance at beginning of period                            20,000    $       9,906           20,000    $       9,906
                Issuance of stock                                          4,875            2,438                -                -
                                                                   --------------   --------------   --------------   --------------
                Balance at end of period                                  24,875           12,344           20,000            9,906
                                                                   --------------   --------------   --------------   --------------
        Series B:
                Balance at beginning of period                                 -                -                -                -
                Issuance of stock                                          1,000              500                -                -
                                                                   --------------   --------------   --------------   --------------
                Balance at end of period                                   1,000              500                -                -
                                                                   --------------   --------------   --------------   --------------

Common stock, $.01 par value, 1,000,000
   shares authorized:
        Balance at beginning of period                                   104,100                1          100,000                1
        Issuance of stock                                                  1,000                -            4,100                -
                                                                   --------------   --------------   --------------   --------------
        Total                                                            105,100                1          104,100                1
                                                                   --------------   --------------   --------------   --------------
        Treasury shares at beginning of period                                 -                -           (1,600)              (2)
        Purchase of treasury shares                                         (900)              (1)          (2,800)              (4)
        Issuance of stock                                                    200                -            4,400                6
                                                                   --------------   --------------   --------------   --------------
        Treasury shares at end of period                                    (700)              (1)               -                -
                                                                   --------------   --------------   --------------   --------------
        Balance at end of period                                         104,400                -          104,100                1
                                                                   --------------   --------------   --------------   --------------

Additional paid-in capital:
        Balance at beginning of period                                                        332                                98
        Issuance of treasury shares and common stock                                           96                               234
                                                                                    --------------                    --------------
        Balance at end of period                                                              428                               332
                                                                                    --------------                    --------------

Retained earnings (deficit):
        Balance at beginning of period                                                     (5,748)                            1,174
        Net (loss) income                                                                  11,065                            (6,922)
                                                                                    --------------                    --------------
        Balance at end of period                                                            5,317                            (5,748)
                                                                                    --------------                    --------------

Other comprehensive income (loss):
        Unrealized gain on securities
              available-for-sale                                                              159                               214
        Minimum pension liability adjustment                                                    -                               (74)
                                                                                    --------------                    --------------
        Other comprehensive income                                                            159                               140
                                                                                    --------------                    --------------

Total stockholders' equity                                                          $      18,748                     $       4,631
                                                                                    ==============                    ==============

<CAPTION>
For the years ended March 31,                                                    1998
----------------------------------------------------------------   -------------------------------
                                                                       Shares           Amounts
                                                                   ---------------  --------------
<S>                                                                <C>              <C>
Preferred stock, $500 par value, 100,000
   shares authorized:

        Series A:
                Balance at beginning of period                             20,000          $9,906
                Issuance of stock                                               -               -
                                                                   ---------------  --------------
                Balance at end of period                                   20,000           9,906
                                                                   ---------------  --------------
        Series B:
                Balance at beginning of period                                  -               -
                Issuance of stock                                               -               -
                                                                   ---------------  --------------
                Balance at end of period                                        -               -
                                                                   ---------------  --------------

Common stock, $.01 par value, 1,000,000
   shares authorized:
        Balance at beginning of period                                     99,000               1
        Issuance of stock                                                   1,000               -
                                                                   ---------------  --------------
        Total                                                             100,000               1
                                                                   ---------------  --------------
        Treasury shares at beginning of period                                  -               -
        Purchase of treasury shares                                        (1,600)             (2)
        Issuance of stock                                                       -               -
                                                                   ---------------  --------------
        Treasury shares at end of period                                   (1,600)             (2)
                                                                   ---------------  --------------
        Balance at end of period                                           98,400              (1)
                                                                   ---------------  --------------
Additional paid-in capital:
        Balance at beginning of period                                                         97
        Issuance of treasury shares and common stock                                            1
                                                                                    --------------
        Balance at end of period                                                               98
                                                                                    --------------
Retained earnings (deficit):
        Balance at beginning of period                                                          -
        Net (loss) income                                                                   1,174
                                                                                    --------------
        Balance at end of period                                                            1,174
                                                                                    --------------
Other comprehensive income (loss):
        Unrealized gain on securities
              available-for-sale                                                                -
        Minimum pension liability adjustment                                                    -
                                                                                    --------------
        Other comprehensive income                                                              -
                                                                                    --------------

Total stockholders' equity                                                          $      11,177
                                                                                    ==============
</TABLE>


                 See notes to Consolidated Financial Statements

                                      F-5
<PAGE>



R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(In thousands except for share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the years ended March 31,                                                   2000                              1999
----------------------------------------------------------------   -------------------------------   -------------------------------
                                                                       Shares          Amounts           Shares          Amounts
                                                                   --------------   --------------   --------------   --------------
<S>                                                                <C>              <C>              <C>              <C>
Common stock, $1.00 par value, 200
   shares authorized:
     Balance at beginning of period                                          200    $           -              200    $           -
     Issuance of stock                                                         -                -                -                -
                                                                   --------------   --------------   --------------   --------------
     Balance at end of period                                                200                -              200                -
                                                                   --------------   --------------   --------------   --------------

Additional paid-in capital:
     Balance at beginning of period                                                        39,482                            10,100
     Equity investment from Holdings                                                            -                            29,382
                                                                                    --------------                    --------------
     Balance at end of period                                                              39,482                            39,482
                                                                                    --------------                    --------------

Retained earnings (deficit):
     Balance at beginning of period                                                        (2,444)                            1,182
     Net income (loss)                                                                      4,506                            (3,626)
                                                                                    --------------                    --------------
     Balance at end of period                                                               2,062                            (2,444)
                                                                                    --------------                    --------------

Other comprehensive income (loss):
     Unrealized gain on securities
     available-for-sale                                                                       159                               214
     Minimum pension liability adjustment                                                       -                               (74)
                                                                                    --------------                    --------------
     Other comprehensive income                                                               159                               140
                                                                                    --------------                    --------------

Total stockholder's equity                                                          $      41,703                     $      37,178
                                                                                    ==============                    ==============


<CAPTION>
For the years ended March 31,                                                    1998
----------------------------------------------------------------   -------------------------------
                                                                       Shares          Amounts
                                                                   --------------   --------------
<S>                                                                <C>              <C>
Common stock, $1.00 par value, 200
   shares authorized:
     Balance at beginning of period                                          200    $           -
     Issuance of stock                                                         -                -
                                                                   --------------   --------------
     Balance at end of period                                                200                -
                                                                   --------------   --------------

Additional paid-in capital:
     Balance at beginning of period                                                        10,100
     Equity investment from Holdings                                                            -
                                                                                    --------------
     Balance at end of period                                                              10,100
                                                                                    --------------

Retained earnings (deficit):
     Balance at beginning of period                                                             -
     Net income (loss)                                                                      1,182
                                                                                    --------------
     Balance at end of period                                                               1,182
                                                                                    --------------

Other comprehensive income (loss):
     Unrealized gain on securities
     available-for-sale                                                                         -
     Minimum pension liability adjustment                                                       -
                                                                                    --------------
     Other comprehensive income                                                                 -
                                                                                    --------------

Total stockholder's equity                                                          $      11,282
                                                                                    ==============
</TABLE>


                 See notes to Consolidated Financial Statements

                                      F-6
<PAGE>

R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the years ended March 31,                                                   2000                          1999
------------------------------------------------------------   -------------------------------------    -----------------
                                                                   Holdings           Enterprises           Holdings
                                                               -----------------   -----------------    -----------------
<S>                                                            <C>                 <C>                  <C>
Cash flows from operating activities:
   Net income (loss)                                           $         11,065    $          4,506     $         (6,922)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                                      6,651               6,522                7,027
       Amortization of intangibles                                        3,086               3,086                2,790
       Extraordinary gain on early extinguishment of debt,
         net of income taxes                                            (12,914)             (4,742)                   -
       Loss (gain) on disposition of equipment                               57                  57                  (82)
       Deferred income taxes                                              3,810               2,035               (2,388)
   Changes in assets and liabilities:
       Accounts receivable                                               (1,996)             (1,996)              (8,461)
       Inventories                                                        3,779               3,779              (13,750)
       Other current assets                                               2,824               1,759               (2,606)
       Accounts payable                                                  (5,949)             (5,949)              22,995
       Other current liabilities                                         (1,098)             (1,030)               6,786
       Other assets and liabilities                                     (10,599)             (4,790)              (2,398)
                                                               -----------------   -----------------    -----------------

Net cash provided by (used in) operating activities                      (1,284)              3,237                2,991
                                                               -----------------   -----------------    -----------------

Cash flows from investing activities:
   Purchase of I. Epstein & Sons, Inc.                                  (14,986)            (14,986)                   -
   Purchase of The B. Manischewitz Company, LLC,
     net of cash acquired                                                     -                   -             (126,155)
   Acquisitions of plant and equipment                                   (3,373)             (3,373)              (3,419)
   Proceeds from disposition of equipment                                    38                  38                  233
                                                               -----------------   -----------------    -----------------

Net cash used in investing activities                                   (18,321)            (18,321)            (129,341)
                                                               -----------------   -----------------    -----------------

Cash flows from financing activities:
   Proceeds from issuance and (repurchase of)
     long-term debt                                                     (21,016)            (12,266)             168,000
   Payment of debt issuance costs                                             -                   -               (6,489)
   Funding of interest escrow account                                         -                   -              (16,991)
   Payment from interest escrow account                                  10,247                   -                3,120
   Borrowings (repayments) under Credit Agreement                        29,890              29,890              (22,061)
   Proceeds from the issuance of preferred stock                          3,000                   -                    -
   Proceeds from issuance and
     repurchase of common stock                                              33                   -                  236
   Equity investment from Holdings                                            -                   -                    -
                                                               -----------------   -----------------    -----------------

Net cash provided by (used in) financing activities                      22,154              17,624              125,815
                                                               -----------------   -----------------    -----------------

Net increase (decrease) in cash                                           2,549               2,540                 (535)

Cash, beginning of year                                                   2,088               2,078                2,623
                                                               -----------------   -----------------    -----------------

Cash, end of year                                              $          4,637    $          4,618     $          2,088
                                                               =================   =================    =================
Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                  $         19,504    $         14,950     $         11,229
     Income taxes                                              $          1,073    $            196     $            828
</TABLE>

<TABLE>
<CAPTION>
For the years ended March 31,                                        1999                           1998
------------------------------------------------------------   -----------------   --------------------------------------
                                                                  Enterprises           Holdings           Enterprises
                                                               -----------------   -----------------    -----------------
<S>                                                            <C>                 <C>                  <C>
Cash flows from operating activities:
   Net income (loss)                                           $         (3,626)   $          1,174     $          1,182
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                                      6,758               4,471                4,471
       Amortization of intangibles                                        2,790                   -                    -
       Extraordinary gain on early extinguishment of debt,
         net of income taxes                                                  -                   -                    -
       Loss (gain) on disposition of equipment                              (82)                (20)                 (20)
       Deferred income taxes                                               (613)               (106)                (106)
   Changes in assets and liabilities:
       Accounts receivable                                               (8,461)              1,950                1,950
       Inventories                                                      (13,750)             10,457               10,457
       Other current assets                                              (2,486)              3,773                3,545
       Accounts payable                                                  22,995               1,952                1,952
       Other current liabilities                                          4,087               3,729                4,789
       Other assets and liabilities                                      (1,378)             (1,477)              (1,584)
                                                               -----------------   -----------------    -----------------

Net cash provided by (used in) operating activities                       6,234              25,903               26,636
                                                               -----------------   -----------------    -----------------
Cash flows from investing activities:
   Purchase of I. Epstein & Sons, Inc.                                        -                   -                    -
   Purchase of The B. Manischewitz Company, LLC,
     net of cash acquired                                              (126,155)                  -                    -
   Acquisitions of plant and equipment                                   (3,419)             (2,309)              (2,309)
   Proceeds from disposition of equipment                                   233                  83                   83
                                                               -----------------   -----------------    -----------------

Net cash used in investing activities                                  (129,341)             (2,226)              (2,226)
                                                               -----------------   -----------------    -----------------
Cash flows from financing activities:
   Proceeds from issuance and (repurchase of)
     long-term debt                                                     120,000                   -                    -
   Payment of debt issuance costs                                        (4,759)                  -                    -
   Funding of interest escrow account                                         -                   -                    -
   Payment from interest escrow account                                       -                   -                    -
   Borrowings (repayments) under Credit Agreement                       (22,061)            (23,690)             (23,690)
   Proceeds from the issuance of preferred stock                              -                   -                    -
   Proceeds from issuance and
     repurchase of common stock                                               -                  (1)                   -
   Equity investment from Holdings                                       29,382                   -                    -
                                                               -----------------   -----------------    -----------------

Net cash provided by (used in) financing activities                     122,562             (23,691)             (23,690)
                                                               -----------------   -----------------    -----------------

Net increase (decrease) in cash                                            (545)                (14)                 720

Cash, beginning of year                                                   2,623               2,637                1,903
                                                               -----------------   -----------------    -----------------

Cash, end of year                                              $          2,078    $          2,623     $          2,623
                                                               =================   =================    =================
Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                  $          8,109    $          4,054     $          4,054
     Income taxes                                              $            828    $          1,392     $          1,392
</TABLE>


                 See notes to Consolidated Financial Statements

                                      F-7
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    Summary Of Significant Accounting Policies

            The Summary of Significant Accounting Policies below and the other
      notes to the consolidated financial statements on the following pages are
      integral parts of the accompanying consolidated financial statements of
      R.A.B. Holdings, Inc. ("Holdings") and R.A.B. Enterprises, Inc.
      ("Enterprises"), its direct wholly-owned subsidiary (the "Consolidated
      Financial Statements"). Holdings is a holding company with no substantial
      assets or operations other than its investment in Enterprises. Enterprises
      is a holding company with no substantial assets or operations other than
      its investments in Millbrook Distribution Services Inc. ("Millbrook") and
      The B. Manischewitz Company, LLC ("Manischewitz").

            Millbrook is one of the nation's largest independent value-added
      distributors of health and beauty care, general merchandise and specialty
      food products. Manischewitz manufactures processed kosher and other ethnic
      foods including, among others, matzos, cake mixes, cookies, soups, noodles
      and processed fish products and also licenses its name to third parties
      for which it receives royalties. Holdings and Enterprises are referred to
      collectively as the "Companies".

            Principles of Consolidation - The Consolidated Financial Statements
      include the accounts of the Companies and their subsidiaries. All
      significant intercompany transactions and balances are eliminated in
      consolidation. Certain reclassifications have been made in the prior year
      financial statements to conform with the current year presentation.

            Use of Estimates - The preparation of financial statements, in
      conformity with generally accepted accounting principles, requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities, the disclosure of contingent assets and
      liabilities at the date of the financial statements, and the reported
      amounts of revenues and expenses during the reporting period. Actual
      results could differ from these estimates.

            Concentration of Credit Risk - Trade accounts receivable potentially
      subject the Companies to credit risk. The Companies extend credit to their
      customers, principally in the U.S. supermarket industry, based upon an
      evaluation of the customer's financial condition and credit history and
      generally do not require collateral. The Companies' allowances for
      doubtful accounts are based upon the expected collectability of trade
      accounts receivable.

            Fiscal Year - The Companies' fiscal years end on March 31.

            Inventories - Inventories are stated at the lower of cost or market.
      Cost is determined by the last-in, first-out ("LIFO") method. At March 31,
      2000 and 1999, the replacement cost of inventories valued using the LIFO
      method exceeded the net carrying amount of such inventories by
      approximately $999,000 and $322,000, respectively. For the year ended
      March 31, 2000, the liquidation of certain LIFO layers decreased costs of
      products sold by approximately $250,000.

            Marketable Securities - Marketable securities held by the Companies
      are classified as available-for-sale. The aggregate excess of fair value
      over cost, net of related income taxes is included as a separate component
      of stockholders' equity.



                                      F-8
<PAGE>


                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


1.    Summary Of Significant Accounting Policies (Continued)

            Property, Plant and Equipment - Property, plant and equipment are
      recorded at cost. For financial reporting purposes, depreciation is
      provided on the straight-line method over the following estimated useful
      lives:

                  Buildings and improvements.......  5-35 years
                  Machinery and equipment..........  2-15 years
                  Rolling stock....................  3-8  years

            Expenditures which significantly increase value or extend useful
      lives are capitalized, while ordinary maintenance and repairs are expensed
      as incurred. The cost and related accumulated depreciation of assets
      replaced, retired or disposed of are removed from the accounts and any
      related gains or losses are reflected in operations.

            Intangibles - Intangibles, which include trademarks, trade names,
      distributorship and trademark license agreements and the excess of cost
      over net assets acquired, are amortized on a straight-line basis over
      their estimated useful lives ranging from 4 to 40 years.

            Long-Lived Assets - The Companies review their long-lived assets and
      related intangibles for impairment whenever changes in circumstances
      indicate that the carrying amount of an asset may not be fully
      recoverable. Such changes in circumstances may include, among other
      factors, a significant change in technology that may render an asset
      obsolete or noncompetitive or a significant change in the extent or manner
      in which an asset is used. The assessment for potential impairment is
      based upon the Companies' abilities to recover the unamortized balance of
      their long-lived assets from expected future cash flows on an undiscounted
      basis (without interest charges). If such expected future cash flows are
      less than the carrying amount of the asset, an impairment loss would be
      recorded.

            Revenue Recognition - Revenue is recognized when products are
      shipped or services are provided to customers. Provisions for returns and
      allowances and bad debts are based upon historical experience and known
      events.

            Royalty Income - The Companies have licensing agreements under which
      they receive royalty payments. Royalty payments due under licensing
      agreements are recognized as income either based upon shipment reports
      from manufacturers, where available, or estimated shipments by such
      manufacturers.

            Income Taxes - Deferred income taxes result primarily from temporary
      differences between financial and tax reporting and acquisition basis
      differences.

            Comprehensive (Loss) Income - For the years ended March 31, 2000,
      1999 and 1998, Holdings' and Enterprises' comprehensive (loss) income was
      $11,084,000 and $4,525,000, respectively, ($6,782,000) and ($3,486,000),
      respectively, and $1,174,000 and $1,182,000, respectively.



                                      F-9
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


1.    Summary Of Significant Accounting Policies (Continued)

            Accounting Pronouncements - Statement of Financial Accounting
      Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and
      Hedging Activities" was issued in June 1998 and is effective for fiscal
      years beginning after June 15, 2000. SFAS No. 133 requires the recognition
      of all derivatives in the consolidated balance sheet as either assets or
      liabilities measured at fair value. The Companies will adopt SFAS No. 133
      when it becomes effective. The Companies have not yet determined the
      impact SFAS No. 133 will have on their financial positions or results of
      operations when such statement is adopted.

2.    Formation And Acquisition

            On May 6, 1996, Holdings, a Delaware corporation, was formed. On
      March 31, 1997, Holdings acquired Millbrook for a purchase price of
      approximately $67 million, including transaction costs. Holdings had no
      operations prior to April 1, 1997. The acquisition was accounted for as a
      purchase and, accordingly, the purchase price was allocated to the assets
      and liabilities of Millbrook based upon their fair values at the date of
      acquisition. The fair values of assets acquired (approximately $129
      million) and liabilities assumed (approximately $53 million) were based
      upon third party appraisals and other valuation analyses. The fair value
      of the net assets acquired exceeded the purchase price by approximately $9
      million. The resulting negative goodwill reduced the fair value assigned
      to Millbrook's property, plant and equipment.

            On January 26, 1998, Holdings formed Enterprises, a wholly-owned
      subsidiary and Delaware corporation. Effective March 3, 1998, Enterprises
      entered into a purchase agreement with MANO Holdings I, LLC, KBMC
      Acquisition Company, L.P., MANO Holdings Corporation ("MANO") and the
      stockholders of MANO to acquire all of the outstanding membership
      interests of Manischewitz. On May 1, 1998, Enterprises acquired all of the
      outstanding interests of Manischewitz for approximately $126.2 million
      through the issuance of $120 million Senior Notes due 2005 bearing
      interest at 10.5% ("10.5% Notes") and the issuance by Holdings of $48
      million Senior Notes due 2008 bearing interest at 13% ("13% Notes"). The
      10.5% Notes are fully and unconditionally guaranteed on a joint and
      several basis by Millbrook and Manischewitz. Accordingly, as the combined
      financial statements of the subsidiaries guaranteeing the 10.5% Notes (the
      Companies' only consequential subsidiaries) are substantially equivalent
      to the consolidated financial statements of Enterprises, no separate
      financial statements of Millbrook and Manischewitz are presented since
      management has determined that such information is not material to
      investors.

            The 13% Notes pay interest for the first three years, semi-annually,
      from an interest escrow account which was established upon their issuance.
      The interest escrow account consists of treasury securities which have
      been accounted for as held-to-maturity and are classified on the
      consolidated balance sheets as Restricted investments. These Restricted
      investments, which mature November 1 and May 1 during each of the first
      three years the 13% Notes are outstanding, may only be used to pay the
      semi-annual interest due.



                                      F-10
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


2.    Formation And Acquisition (Continued)

            The acquisition of Manischewitz was accounted for as a purchase and,
      accordingly, the purchase price was allocated to the assets and
      liabilities of Manischewitz based upon their fair values at the date of
      acquisition. The fair values of assets acquired, including identified
      intangibles (approximately $126 million), and liabilities assumed
      (approximately $70 million) were based upon third party appraisals and
      other valuation analyses. The purchase price exceeded the fair value of
      the net assets acquired by approximately $56 million. The consolidated
      statements of operations include the operating results of Manischewitz
      since its date of acquisition. Concurrent with the Manischewitz
      acquisition, Holdings contributed its wholly-owned subsidiary Millbrook to
      Enterprises. This contribution was accounted for as an "as if" pooling of
      interests.

            The pro forma consolidated historical results, as if the
      Manischewitz business had been acquired at the beginning of each of the
      periods presented, are as follows (in thousands):

<TABLE>
<CAPTION>
            For the years ended March 31,                      1999                                        1998
            -----------------------------     --------------------------------------      --------------------------------------
                                                  Holdings             Enterprises            Holdings            Enterprises
                                              ----------------      ----------------      ----------------      ----------------
<S>                                           <C>                   <C>                   <C>                   <C>
            Revenues                          $       512,730       $       512,730       $       524,575       $       524,575

            Net loss                          $        (7,772)      $        (4,176)      $        (4,585)      $          (989)
</TABLE>

            On January 31, 2000, Millbrook acquired certain of the assets and
      operation of I. Epstein & Sons, Inc. ("Epstein") for a purchase price of
      approximately $15.4 million, including transaction costs. Epstein was a
      full service distributor of kosher and specialty food products, including
      its Season brand of canned fish, vegetables and other specialty food
      products. Concurrent with the acquisition, the management and ownership of
      the Season brand was assumed by the Companies' Manischewitz subsidiary.

            The acquisition of Epstein was accounted for as a purchase and,
      accordingly, the purchase price was allocated to the assets and
      liabilities of Epstein based upon their fair values at the date of
      acquisition. The fair value of the assets acquired (approximately $17
      million) and liabilities assumed (approximately $2 million) were based
      upon third party appraisals and other valuation analyses. The purchase
      price exceeded the fair value of the net assets acquired by approximately
      $7 million which is being amortized over 25 years. The liabilities assumed
      include a $900,000 provision for a minor restructuring of the Epstein
      operations as a result of the acquisition. This liability is primarily
      comprised of a portion of future lease payments. As of March 31, 2000,
      this provision has been included as a component of Other Current
      Liabilities and Other Liabilities on the Companies' balance sheets. The
      consolidated statements of operations include the operating results of
      Epstein since its date of acquisition. Pro forma historical operating
      results have not been included as the impact of the acquisition was not
      considered significant on a consolidated basis.



                                      F-11
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


3.    Accounts Receivable

            Accounts receivable for Holdings and Enterprises consisted of the
      following (in thousands):

            March 31,                                     2000        1999
            ------------------------------------------  ---------   ---------
            Accounts receivable.......................  $  59,236   $  56,292
            Allowance for doubtful accounts...........     (4,251)     (3,303)
                                                        ---------   ---------
                                                        $  54,985   $  52,989
                                                        =========   =========
4.    Inventories

            Inventories for Holdings and Enterprises consisted of the following
      (in thousands):

            March 31,                                     2000        1999
            ------------------------------------------  ---------   ---------

            Raw materials.............................  $   1,815   $   1,219
            Finished goods............................     63,471      60,842
                                                        ---------   ---------
                                                        $  65,286   $  62,061
                                                        =========   =========

5.    Property, Plant & Equipment

            Property, plant and equipment for Holdings and Enterprises consisted
      of the following (in thousands):

            March 31,                                     2000        1999
            ------------------------------------------  ---------   ---------

            Land......................................  $   2,929   $   2,936
            Buildings and improvements................     17,364      16,679
            Machinery and equipment...................     28,803      24,630
            Rolling stock.............................      3,296       3,277
            Work in progress..........................          -          54
                                                        ---------   ---------
                                                           52,392      47,576
            Less accumulated depreciation and
                 amortization.........................     15,193       9,109
                                                        ---------   ---------
                                                        $  37,199   $  38,467
                                                        =========   =========



                                      F-12
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



6.    Intangibles

            Intangibles for Holdings and Enterprises consisted of the following
      (in thousands):

            March 31,                                     2000        1999
            ------------------------------------------  ---------   ---------

            Trademarks and trade names................  $  42,000   $  42,000
            Distributorship and trademark license
                 agreements...........................      4,400       4,400
            Excess of cost over net assets acquired...     63,735      56,468
                                                        ---------   ---------
                                                          110,135     102,868
            Less accumulated amortization.............      5,876       2,790
                                                        ---------   ---------
                                                        $ 104,259   $ 100,078
                                                        =========   =========

7.    Other Current Liabilities

            Other current liabilities for Holdings and Enterprises consisted of
      the following (in thousands):

<TABLE>
<CAPTION>
            March 31,                                                  2000                                    1999
            ----------------------------------------   ----------------------------------      -----------------------------------
                                                           Holdings         Enterprises            Holdings           Enterprises
                                                       ---------------    ---------------      ---------------     ---------------
<S>                                                    <C>                <C>                  <C>                 <C>
            Accrued compensation and
                 fringe benefits....................   $        11,358    $        11,358      $         9,306     $         9,306
            Accrued interest........................             6,116              4,747                8,098               5,491
            Accrued liabilities.....................             9,260              7,996                8,734               8,640
                                                       ---------------    ---------------      ---------------     ---------------
                                                       $        26,734    $        24,101      $        26,138     $        23,437
                                                       ===============    ===============      ===============     ===============
</TABLE>

8.    Long-term Debt

            Long-term debt for Holdings and Enterprises consisted of the
      following (in thousands):

<TABLE>
<CAPTION>
            March 31,                                                  2000                                    1999
            ----------------------------------------   ----------------------------------      -----------------------------------
                                                           Holdings         Enterprises            Holdings           Enterprises
                                                       ---------------    ---------------      ---------------     ---------------

<S>                                                    <C>                <C>                  <C>                 <C>
            10.5% Notes due 2005....................   $        99,150    $        99,150      $       120,000     $       120,000
            13% Notes due 2008......................            25,000                  -               48,000                   -
            Revolving credit facility...............            39,000             39,000                7,673               7,673
            Term loan...............................             6,939              6,939                8,376               8,376
                                                       ---------------    ---------------      ---------------     ---------------
                                                               170,089            145,089              184,049             136,049
            Less current maturities.................             1,946              1,946                1,291               1,291
                                                       ---------------    ---------------      ---------------     ---------------
                                                       $       168,143    $       143,143      $       182,758     $       134,758
                                                       ===============    ===============      ===============     ===============
</TABLE>



                                      F-13
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


8.    Long-term Debt (Continued)

            On March 31, 1997, Millbrook entered into a credit agreement, as
      subsequently amended, with a group of commercial lending institutions
      providing for a credit facility in the aggregate amount of $100 million
      consisting of revolving credit loans up to $90.2 million and an amortizing
      term loan of $9.8 million (the "Credit Agreement"). Effective May 1, 1998,
      the Credit Agreement was amended and restated to include Manischewitz. On
      April 24, 2000, the Credit Agreement was amended to provide for revolving
      credit loans up to $115 million. Borrowings under this long-term facility,
      which expires March 31, 2003, are supported by specified assets in
      accordance with a borrowing base formula, as defined in the Credit
      Agreement. Enterprises pledged Millbrook's stock and Manischewitz'
      interests under the terms of the Credit Agreement. Additionally, the
      Credit Agreement requires the maintenance of a minimum level of cash flow,
      as defined and imposes restrictions on investments, capital expenditures,
      cash dividends, management fees and advances to the parent and other
      indebtedness. At March 31, 2000, substantially all of the assets of
      Enterprises' subsidiaries are unavailable for dividends. At March 31,
      2000, Millbrook and Manischewitz had available, under the Credit
      Agreement, unused borrowing capacity of approximately $49 million, net of
      outstanding letters of credit of approximately $1.9 million.

            Borrowings under the Credit Agreement bear interest at either the
      London interbank offered ("LIBO") rate plus a margin or the bank's
      alternate base rate plus a margin (up to 2.50%). The margin, which ranged
      from 1.50% to 1.75% at March 31, 2000, is based upon availability pursuant
      to the borrowing base calculation. At March 31, 2000, borrowings under the
      LIBO option were $45,939,000. At March 31, 1999, borrowings under the LIBO
      and alternate base rate options were $15,376,000 and $673,000,
      respectively. At March 31, 2000, the interest rate on the outstanding LIBO
      and alternate base rate loans ranged from 7.50% to 7.99%. In addition, on
      May 1, 1997, Millbrook entered into a three-year interest rate protection
      agreement that effectively caps rates on a notional principal amount up to
      $50 million of borrowings at a LIBO rate of 7.625%, as required by the
      Credit Agreement to manage interest rate exposure to market fluctuations.
      The Companies (i) do not engage in derivative activity for trading or
      speculative purposes; (ii) periodically evaluate the financial position of
      the counterparty; and (iii) do not expect non-performance by the
      counterparty. At March 31, 2000 and 1999, Millbrook's and Manischewitz'
      outstanding debt under the Credit Agreement and the interest rate
      protection agreement approximate fair value. The recognition of the fair
      value of the interest rate protection agreement is not required since it
      is accounted for as a hedge. At March 31, 2000, the fair value of
      Holdings' 13% Notes and Enterprises' 10.5% Notes was $12.5 million and
      $67.4 million, respectively.



                                      F-14
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


8.    Long-term Debt (Continued)

            During the year ended March 31, 2000, Enterprises repurchased
      approximately $20.9 million of its outstanding 10.5% Notes resulting in a
      gain of approximately $4.7 million, net of income taxes of approximately
      $3.1 million. In addition, the stockholders of Holdings purchased $3.0
      million of additional preferred stock to partially fund Holdings'
      repurchase of $23.0 million of its outstanding 13% Notes resulting in a
      gain of approximately $8.2 million, net of income taxes of approximately
      $5.4 million. These transactions were recorded as extraordinary items.

            Following March 31, 2000, Enterprises repurchased approximately
      $18.8 million of its outstanding 10.5% Notes. The resulting gain from
      early extinguishment of this debt will be recorded in the Companies
      consolidated financial statements for the fiscal quarter ending June 30,
      2000.

            Future maturities of long-term debt at March 31, 2000 were as
      follows (in thousands):

                                                  Holdings         Enterprises
                                              ---------------    ---------------
            2001.......................        $     1,946       $      1,946
            2002.......................              1,946              1,946
            2003.......................             42,047             42,047
            2004.......................                  -                  -
            2005.......................                  -                  -
            Thereafter.................            124,150             99,150
                                                -------------     --------------
                                                $  170,089        $   145,089
                                                =============     ==============

9.    Stockholders' Equity

            In conjunction with its acquisition of Millbrook in 1997, Holdings
      sold 20,000 shares of Series A Preferred Stock at $500 per share and
      100,000 shares of Common Stock at $1.00 per share. During the year ended
      March 31, 2000, Holdings sold an additional 5,000 shares of Series A
      Preferred Stock at $500 per share and 1,000 shares of Series B Preferred
      Stock at $500 per share.

            The holders of the Series A and B Preferred Stock are entitled to
      cumulative preferential cash dividends of $50 per year (10%), per share.
      At March 31, 2000, the amount of accumulated unpaid dividends per share on
      the Series A Preferred Stock was $150 for shares issued in 1997 and $50
      for each of the Series A and B Preferred Stock issued in 1999. Unless all
      accumulated and unpaid dividends on the Series A and B Preferred Stock are
      paid, no dividends shall be declared or paid on Holdings' Common Stock.
      The Series A and B Preferred Stock are each subject to an optional
      redemption by Holdings at any time, in whole or in part, at the redemption
      price per share of $500 plus an amount equal to all accumulated and unpaid
      dividends.



                                      F-15
<PAGE>




                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


10.   Commitments And Contingencies

      Leases

            The Companies lease certain facilities, machinery and vehicles under
      various non-cancelable operating lease agreements. The Companies are
      required to pay property taxes, insurance and normal maintenance costs for
      certain of their facilities. Future minimum lease payments required under
      such leases in effect at March 31, 2000 were as follows (in thousands):

            2001..................................................   $ 4,366
            2002..................................................     4,115
            2003..................................................     3,184
            2004..................................................     2,218
            2005..................................................     1,908
            Thereafter............................................     4,546
                                                                     -------
                                                                     $20,337
                                                                     =======

            Total rent expense for all operating leases was $5.7 million, $4.9
      million and $4.3 million for the years ended March 31, 2000, 1999, and
      1998, respectively.

      Commitments

            At March 31, 2000 and 1999, Manischewitz had approximately $1.2
      million and $1.5 million, respectively, of purchase commitments with
      certain vendors.

      Contingencies

            The Companies are subject to pending claims and legal proceedings in
      the normal course of their business. While it is not feasible to predict
      or determine the outcome of these claims and proceedings, it is the
      opinion of management that their outcome, to the extent not provided for
      through insurance or otherwise, will not have a materially adverse effect
      on the Companies' financial position or future results of operations.



                                      F-16
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


11.   Income Taxes

            The provision (benefit) for income taxes consisted of the following
      (in thousands):

<TABLE>
<CAPTION>
            March 31,                                                         2000                                1999
            -----------------------------------------------   ---------------------------------   ---------------------------------
                                                                Holdings          Enterprises       Holdings          Enterprises
                                                              ------------      ---------------   ------------      ---------------
<S>                                                           <C>               <C>               <C>               <C>
            Currently (receivable) payable:
                  Federal..................................   $     (4,329)     $        (1,564)  $       (671)     $          (671)
                  State....................................           (627)                (183)          (115)                (115)
                                                              ------------      ---------------   ------------      ---------------
                                                                    (4,956)              (1,747)          (786)                (786)
                                                              ------------      ---------------   ------------      ---------------
            Deferred (benefit) liability:
                  Federal..................................   $      3,759      $         1,984         (2,582)     $          (807)
                  State....................................             51                   51            194                  194
                                                              ------------      ---------------   ------------      ---------------
                                                                     3,810                2,035         (2,388)                (613)
                                                              ------------      ---------------   ------------      ---------------
                                                              $     (1,146)     $           288   $     (3,174)     $        (1,399)
                                                              ============      ===============   ============      ===============


<CAPTION>
            March 31,                                                1998
            -----------------------------------------------   ---------------
                                                                Holdings and
                                                                 Enterprises
                                                              ---------------
<S>                                                           <C>
            Currently (receivable) payable:
                  Federal..................................   $         1,075
                  State....................................               153
                                                              ---------------
                                                                        1,228
                                                              ---------------
            Deferred (benefit) liability:
                  Federal..................................   $           (93)
                  State....................................               (13)
                                                              ---------------
                                                                         (106)
                                                              ---------------
                                                              $         1,122
                                                              ===============
</TABLE>

            A reconciliation of the statutory United States Federal income tax
      rate to the Companies effective income tax (benefit) rates follows:


<TABLE>
<CAPTION>
      For the years ended
      March 31,                                                      2000                                  1999
      --------------------------------------------    -----------------------------------    -----------------------------------
                                                         Holdings          Enterprises          Holdings          Enterprises
                                                      ---------------   -----------------    ---------------   -----------------
<S>                                                   <C>               <C>                  <C>               <C>
      Statutory rate...............................        (35.0%)             35.0%              (35.0%)           (35.0%)
      State income taxes, net of
            Federal benefit........................         (2.6)             116.6                  .5               1.0
      Nondeductible amortization of
            intangibles............................         16.4              945.0                 4.5               9.0
      Change in valuation
            allowances.............................        (23.3)            (657.7)                -                 -
      Other, principally meals and
            disallowances in 1998..................          6.2              115.3                (1.4)             (2.8)
                                                      ---------------   -----------------    ---------------   -----------------

                                                           (38.3%)            554.2%              (31.4%)           (27.8%)
                                                      ===============   =================    ===============   =================


<CAPTION>
      For the years ended
      March 31,                                                     1998
      --------------------------------------------    ---------------------------------
                                                         Holdings         Enterprises
                                                      ---------------   ---------------
<S>                                                   <C>               <C>
      Statutory rate...............................         35.0%             35.0%
      State income taxes, net of
            Federal benefit........................          4.6               4.6
      Nondeductible amortization of
            intangibles............................          -                 -
      Change in valuation
            allowances.............................          -                 -
      Other, principally meals and
            disallowances in 1998..................          9.2               9.1
                                                      ---------------   ---------------

                                                            48.8%             48.7%
                                                      ===============   ===============
</TABLE>




                                      F-17
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


11.   Income Taxes (Continued)

            The income tax effects of temporary differences that give rise to
      significant portions of the deferred tax assets and liabilities were as
      follows (in thousands):

<TABLE>
<CAPTION>
                                                                                2000
                                                                      ----------------------                  1999
                                                                            Holdings and       ------------------------------------
      March 31,                                                              Enterprises            Holdings          Enterprises
      -----------------------------------------------------------     ----------------------   ----------------  ------------------
<S>                                                                   <C>                      <C>               <C>
      Deferred Tax Assets:
           Accounts receivable, principally due to
             allowances for doubtful accounts...................         $         1,701        $      1,883     $         1,883
           Deferred compensation................................                   3,982               3,800               3,800
           Net operating loss carryforwards.....................                       -               5,164               3,034
           Liability accruals...................................                   4,049               6,123               6,123
           Other, net...........................................                     682                 623                 623

      Deferred Tax Liabilities:
           Inventories, principally due to
             acquisition basis differences and
             financial statement allowances.....................                  (4,886)             (5,651)             (5,651)
           Property, plant & equipment, principally
             due to basis differences...........................                  (5,979)             (6,846)             (6,846)
           Identified intangibles, due to
             basis differences..................................                  (9,135)             (9,456)             (9,456)
                                                                         ----------------       -------------    ----------------
           Net deferred tax liabilities before
             valuation allowances...............................                  (9,586)             (4,360)             (6,490)
           Valuation allowances.................................                       -                (697)               (342)
                                                                         ----------------       -------------    ----------------
           Net deferred tax liabilities.........................         $        (9,586)       $     (5,057)    $        (6,832)
                                                                         ================       =============    ================
</TABLE>

            At March 31, 2000, Holdings and Enterprises had no consolidated net
      operating loss carryforwards for Federal or state income tax purposes as
      these carryforwards were utilized to partially offset the gain on early
      extinguishment of debt. In addition, the valuation allowances established
      during the year ended March 31, 1999 were reversed due to the gain on
      early extinguishment of debt at Holdings and Enterprises.

            At March 31, 1999, Holdings and Enterprises had consolidated net
      operating loss carryforwards for Federal income tax purposes of $12.2
      million and $7.1 million, respectively. The Federal net operating loss
      carryforwards were to expire March 31, 2019. At March 31, 1999, Holdings
      and Enterprises had consolidated net operating loss carryforwards for
      state income tax purposes of $12.4 million and $7.3 million, respectively.
      The state net operating loss carryforwards were to expire at various dates
      through 2019. The valuation allowances represented state net operating
      loss carryforwards, which management believed that it was more likely than
      not that the carryforward benefits would not be realized, as Holdings and
      Enterprises file separate state income tax returns which do not have
      income from operations.



                                      F-18
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


12.   Employee Benefit Plans

      Retirement and Savings Plan

            The Companies have a retirement and savings plan ("401(k) Plan")
      covering substantially all of their employees. The 401(k) Plan provides
      for matching contributions by the Companies. In addition, the Companies
      may make annual discretionary contributions to employee accounts based, in
      part, on the Companies' financial performance. For each of the years ended
      March 31, 2000, 1999 and 1998, the Companies' provided approximately $1.8
      million, $1.8 million and $2.3 million, respectively, for matching and
      discretionary contributions.

      Deferred Compensation

            Deferred compensation principally relates to a compensation
      arrangement implemented in 1984 by a predecessor of Millbrook in the form
      of a non-qualified defined benefit plan and a supplemental retirement plan
      which permitted former officers and certain management employees, at the
      time, to defer portions of their compensation and to earn specified
      maximum benefits upon retirement. The future benefit obligations, which
      are fixed in accordance with the plan, have been recorded at a discount
      rate of 8%. These plans do not allow new participants.

            In an effort to provide for the benefits associated with these
      plans, Millbrook's predecessor purchased whole-life insurance contracts on
      the plan participants. The value of these policies is included in Other
      assets. At March 31, 2000, future payment obligations under the deferred
      compensation arrangement were approximately $406,000, $403,000, $401,000,
      $401,000 and $401,000 for the years ending March 31, 2001, 2002, 2003,
      2004 and 2005, respectively.



                                      F-19
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


12.   Employee Benefit Plans (Continued)

      Pension Plan and Other Postretirement Benefits

            An analysis of Manischewitz' pension plan and accumulated benefit
      obligation for its postretirement health plan follows (in thousands):

<TABLE>
<CAPTION>
      For the period ended March 31,                                      2000                                  1999
      ----------------------------------------------------                ----                                  ----
                                                                                Other Post-                            Other Post-
                                                                Pension         Retirement            Pension          Retirement
                                                               Benefits          Benefits            Benefits           Benefits
                                                               --------          --------            --------           --------
<S>                                                           <C>               <C>                <C>                 <C>
      Change in benefit obligation
      Benefit obligation at beginning of period...........    $     13,481      $      1,697       $     13,138        $      1,622
      Service cost........................................             157                21                223                  24
      Interest cost.......................................             876               112                818                 101
      Actuarial (gain) loss...............................          (1,224)             (134)               522                  35
      Amendments..........................................               -                 -               (381)                  -
      Benefits paid.......................................          (1,138)              (88)              (839)                (85)
                                                              ------------      ------------       ------------        ------------
      Benefit obligation at end of period.................          12,152             1,608             13,481               1,697
                                                              ------------      ------------       ------------        ------------
      Change in plan assets
      Fair value of plan assets at beginning
        of period.........................................          11,391                 -             10,442                   -
      Actual return on plan assets........................           1,893                 -                873                   -
      Employer contributions..............................           1,000                88                915                  85
      Benefits paid.......................................          (1,138)              (88)              (839)                (85)
                                                              ------------      ------------       ------------        ------------
      Fair value of plan assets at end of period..........          13,145                 -             11,391                   -
                                                              ------------      ------------       ------------        ------------

      Funded status.......................................             993            (1,608)            (2,090)             (1,697)
      Unrecognized actuarial (gain) loss..................          (2,097)              (99)               175                  35
                                                              ------------      ------------       ------------        ------------
      Net amount recognized...............................    $     (1,104)     $     (1,707)      $     (1,915)       $     (1,662)
                                                              ============      ============       ============        ============
      Amount recognized in the statement
        of financial position consists of:
      Accrued benefit liability...........................    $     (1,104)     $     (1,707)      $     (1,915)       $     (1,662)
      Accumulated other comprehensive income..............               -                 -               (122)                  -
                                                              ------------      ------------       ------------        ------------
      Net amount recognized...............................    $     (1,104)     $     (1,707)      $     (2,037)       $     (1,662)
                                                              ============      ============       ============        ============
      Weighted-average assumptions:
      Discount rate.......................................           7.75%             7.75%              6.75%               6.75%
      Expected return on assets...........................           7.50%                -               7.50%                  -
      Rate of compensation increase.......................           4.00%                -               4.00%                  -
</TABLE>

            For measurement purposes, an 8% annual rate of increase in the per
      capita cost of covered health care benefits was assumed for 2000. The rate
      was assumed to decrease by one quarter of 1% per year to 5% in 2010 and
      remain at that level thereafter.



                                      F-20
<PAGE>




                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


12.   Employee Benefit Plans (Continued)

<TABLE>
<CAPTION>
         For the period ended March 31,                                    2000                                 1999
         -----------------------------------------------                   ----                                 ----
                                                                                 Other Post-                           Other Post-
                                                                 Pension         Retirement           Pension          Retirement
                                                                Benefits          Benefits           Benefits           Benefits
                                                                --------          --------           --------           --------
<S>                                                            <C>               <C>               <C>                 <C>
         Components of net periodic benefit cost
         Service cost......................................    $        157      $         21      $        223        $         24
         Interest cost.....................................             876               112               818                 101
         Expected return on assets.........................            (845)                -              (725)                  -
                                                               ------------      ------------      ------------        ------------
         Net periodic pension cost.........................    $        188      $        133      $        316        $        125
                                                               ============      ============      ============        ============
</TABLE>

            The projected benefit obligation, accumulated benefit obligation and
      fair value of plan assets for the pension plan with accumulated benefit
      obligations in excess of plan assets were $12,152,000, $12,139,000 and
      $13,145,000, respectively, as of the end of the period, and $13,481,000,
      $13,428,000 and $11,391,000, respectively, as of the beginning of the
      period.

            Manischewitz provides health benefits to eligible retired employees
      under its postretirement health care plan. Assumed health care cost trend
      rates have a significant effect on the amounts reported for the health
      care plan. A one-percentage-point change in assumed health care cost trend
      rates would have the following effect:

<TABLE>
<CAPTION>
                                                                                             1-Percentage-Point
                                                                                             ------------------
                                                                                      Increase               Decrease
                                                                                      --------               --------
                                                                                               (In thousands)

<S>                                                                                 <C>                  <C>
            Effect on total of service and interest cost components...........        $    3             $      (3)
            Effect on postretirement benefit obligation.......................        $   46             $     (42)
</TABLE>



                                      F-21
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


13.   Related Party Transactions

            Concurrent with Millbrook's acquisition by Holdings, Millbrook
      entered into an arrangement with an entity owned by the controlling
      shareholder of Holdings whereby Millbrook agreed (i) to pay a quarterly
      management fee of $100,000; and (ii) to reimburse the entity for
      reasonable services provided and out-of-pocket and other expenses incurred
      on its behalf. Concurrent with Manischewitz' acquisition by Enterprises,
      Manischewitz entered into an arrangement with the entity owned by the
      controlling shareholder of Holdings whereby Manischewitz agreed to
      reimburse the entity for reasonable services provided and out-of-pocket
      and other expenses incurred on its behalf. The services provided under
      both arrangements include, among other things, treasury, cash management,
      certain financial reporting, legal, labor and lease negotiation and
      employee benefits administration. For each of the years ended March 31,
      2000, 1999 and 1998, Millbrook paid $400,000 for management fees and
      $875,000, $800,000 and $800,000, respectively, for reasonable services
      provided by this entity pursuant to its aforementioned arrangement. For
      the year ended March 31, 2000 and the period ended March 31, 1999,
      Manischewitz paid approximately $428,000 and $150,000, respectively, for
      reasonable services provided by this entity pursuant to its aforementioned
      arrangement. The reasonable services provided under each of these
      arrangements are based upon (i) the number of hours incurred at the
      applicable pay rate; and (ii) out-of-pocket expenses, related to the
      services provided.

            In addition, during the years ended March 31, 2000 and 1999,
      Millbrook reimbursed the aforementioned entity approximately $97,000 and
      $169,000, respectively, and Manischewitz reimbursed the aforementioned
      entity approximately $16,000 and $25,000, respectively, for use of its
      airplane. When commercial flights were available to the destination, the
      reimbursement was determined at the rate of the normal first class fare.
      When commercial flights were not available, the reimbursement amount was
      equal to the hourly variable costs of the airplane multiplied by the
      number of hours of use.

            In the opinion of management, these methodologies provided a
      reasonable basis for such allocations. In addition, the Companies believe
      that the terms of the arrangement with this entity were no less favorable
      than could have been obtained from unaffiliated third parties on an arm's
      length basis.

14.   Segment Reporting

            SFAS No. 131, "Disclosures about Segments of an Enterprise and
      Related Information", established standards for reporting information
      about operating segments in financial statements. Operating segments are
      defined as components of an enterprise about which separate financial
      information is available that is evaluated regularly by the chief
      operating decision maker, or decision-making group, in deciding how to
      allocate resources and in assessing performance. The Companies' chief
      decision-maker is its Chairman and Chief Executive Officer.



                                      F-22
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


14.   Segment Reporting (Continued)

            The Companies' reportable operating segments are Millbrook and
      Manischewitz. The operating segments are managed separately as each
      operating segment represents a strategic business entity. The accounting
      policies of these operating segments are the same as those described in
      the Summary Of Significant Accounting Policies except that the
      disaggregated financial results have been prepared using a management
      approach, which is consistent with the basis and manner in which each
      company's management internally disaggregates financial information for
      the purposes of assisting in making internal operating decisions. The
      Companies evaluate performance based on each business entity's stand-alone
      operating income before depreciation of property, plant and equipment and
      amortization of intangibles, non-recurring items, corporate charges,
      including certain bad debt and profit sharing costs, management fees and
      services provided to the operating segments by an entity owned by
      Holdings' majority stockholder. Intersegment sales are generally accounted
      for as sales to third parties.


<TABLE>
<CAPTION>
For the years ended March 31,                            2000                         1999                          1998
-----------------------------                  -------------------------    -------------------------    -------------------------
                                                Holdings     Enterprises     Holdings     Enterprises     Holdings     Enterprises
                                               -----------   -----------    -----------   -----------    -----------   -----------
<S>                                            <C>           <C>            <C>           <C>            <C>           <C>
Revenues
    Millbrook .............................    $   537,872   $   537,872    $   464,785   $   464,785    $   470,201   $   470,201
    Manischewitz ..........................         50,321        50,321         46,549        46,549              -             -
                                               -----------   -----------    -----------   -----------    -----------   -----------
      Total segment revenues ..............        588,193       588,193        511,334       511,334        470,201       470,201
    Corporate items, principally
      the elimination of of
      intercompany sales ..................         (7,577)       (7,623)        (3,041)       (3,041)             -             -
                                               -----------   -----------    -----------   -----------    -----------   -----------
                                               $   580,616   $   580,570    $   508,293   $   508,293    $   470,201   $   470,201
                                               ===========   ===========    ===========   ===========    ===========   ===========

Operating income
    Millbrook .............................    $    15,009   $    15,009    $     7,985   $     7,985    $    12,914   $    12,914
    Manischewitz ..........................         11,666        11,666         12,520        12,520              -             -
                                               -----------   -----------    -----------   -----------    -----------   -----------
      Total segment operating income ......         26,675        26,675         20,505        20,505         12,914        12,914
    Corporate items and eliminations ......        (10,710)      (10,735)       (10,581)      (10,581)        (5,539)       (5,531)
                                               -----------   -----------    -----------   -----------    -----------   -----------
                                               $    15,965   $    15,940    $     9,924   $     9,924    $     7,375   $     7,383
                                               ===========   ===========    ===========   ===========    ===========   ===========

Identifiable assets
    Millbrook .............................    $   132,687   $   132,687    $   126,334   $   126,334    $   108,768   $   108,875
    Manischewitz ..........................         49,199        49,199         47,324        47,324              -             -
                                               -----------   -----------    -----------   -----------    -----------   -----------
      Total segment assets ................        181,886       181,886        173,658       173,658        108,768       108,875
    Corporate items, principally
      intangibles not allocated
      to segments .........................        108,122       103,444        123,949       105,975              4             -
                                               -----------   -----------    -----------   -----------    -----------   -----------
                                               $   290,008   $   285,330    $   297,607   $   279,453    $   108,772   $   108,875
                                               ===========   ===========    ===========   ===========    ===========   ===========
</TABLE>



                                      F-23
<PAGE>



                     R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
                    R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Concluded)


15.   Significant Customers

      For the years ended March 31, 2000 and 1999, revenues from the Companies'
      two largest customers, Shaw's Supermarket/Star Markets and Ames Department
      Stores represented approximately 28.9% and 24.4% of total revenues,
      respectively.

16.   Subsequent Event

      On April 17, 2000, Millbrook acquired substantially all of the assets and
      operation of the Miller Buckeye Biscuit Company, Inc. for a purchase price
      of approximately $17.5 million, including transaction costs. The
      acquisition, which was funded through additional borrowings under the
      Company's Credit Agreement, was accounted for as a purchase. Accordingly,
      the purchase price was allocated to the assets purchased and liabilities
      assumed based upon their estimated fair values at the date of acquisition,
      utilizing preliminary allocations of purchase price which are subject to
      further refinement and adjustment, including appraisals and other
      valuation analyses. The excess of cost over the fair value of net assets
      acquired represents goodwill which, when finalized, will be amortized on a
      straight-line basis over its estimated useful life.




                                      F-24
<PAGE>


R.A.B. HOLDINGS, INC. - PARENT ONLY
R.A.B. ENTERPRISES, INC. - PARENT ONLY

BALANCE SHEETS
(In thousands except for share and per share data)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
March 31,                                                                        2000                          1999
------------------------------------------------------------------       -----------------------      -------------------------
                                                                         Holdings    Enterprises      Holdings      Enterprises
                                                                         --------    -----------      --------      -----------
<S>                                                                      <C>         <C>              <C>           <C>
                             ASSETS
Current assets:
     Cash                                                                $     19      $       -      $     10       $       -
     Restricted investments                                                 3,145              -         5,805               -
     Other current assets                                                       8             41         1,801           1,722
                                                                         --------      ---------      --------       ---------
          Total current assets                                              3,172             41         7,616           1,722
Noncurrent assets:
     Restricted investments                                                 1,582              -         8,880               -
     Intercompany notes receivable                                              -         64,502             -          64,322
     Other assets                                                             980          2,853         1,798           4,189
                                                                         --------      ---------      --------       ---------
          Total noncurrent assets                                           2,562         67,355        10,678          68,511
     Investments in subsidiaries                                           41,703         77,822        37,178          92,912
                                                                         --------      ---------      --------       ---------

Total assets                                                             $ 47,437      $ 145,218      $ 55,472       $ 163,145
                                                                         ========      =========      ========       =========

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accrued interest                                                    $  1,369      $   4,348      $  2,613       $   5,277
     Other current liabilities                                              2,320             17           228             690
                                                                         --------      ---------      --------       ---------
          Total current liabilities                                         3,689          4,365         2,841           5,967
Noncurrent liabilities:
     Long-term debt                                                        25,000         99,150        48,000         120,000
                                                                         --------      ---------      --------       ---------
          Total noncurrent liabilities                                     25,000         99,150        48,000         120,000

Stockholders' equity:
     Preferred stock, $500 par value, 100,000 shares
        authorized, 24,875 and 20,000 shares of Series A
        issued and outstanding at March 31, 2000 and
        March 31, 1999, respectively                                       12,344              -         9,906               -
        1,000 shares of Series B issued and outstanding
        at March 31, 2000                                                     500              -             -               -
     Common stock, $.01 and $1.00 par value, 1,000,000
        shares and 200 shares authorized, issued 105,100
        shares and 200 shares at March 31, 2000 and 104,100
        shares and 200 shares at March 31, 1999, respectively                  1              -             1               -
     Additional paid-in capital                                               428         39,482           332          39,482
     Retained earnings (deficit)                                            5,317          2,062        (5,748)         (2,444)
     Accumulated other comprehensive income                                   159            159           140             140
                                                                         --------      ---------      --------       ---------
                                                                           18,749         41,703         4,631          37,178
     Less common stock in treasury - 700 shares                                 1              -             -               -
                                                                         --------      ---------      --------       ---------
          Total stockholders' equity                                       18,748         41,703         4,631          37,178
                                                                         --------      ---------      --------       ---------

Total liabilities and stockholders' equity                               $ 47,437      $ 145,218      $ 55,472       $ 163,145
                                                                         ========      =========      ========       =========
</TABLE>


              See notes to parent only financial statement schedules


                                      S-1
<PAGE>

R.A.B. HOLDINGS, INC. - PARENT ONLY
R.A.B. ENTERPRISES, INC. - PARENT ONLY

STATEMENTS OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
For the years ended March 31,                                                     2000                         1999
-------------------------------------------------------------------   --------------------------------------------------------
                                                                         Holdings    Enterprises     Holdings     Enterprises
                                                                      ------------  -------------  ------------   ------------
<S>                                                                   <C>           <C>            <C>            <C>
Equity in net income (loss) of subsidiaries                              $  4,506        $ 1,386      $ (3,626)      $   (449)

Revenues                                                                       46              -             -              -
                                                                         --------        -------      --------       --------
                                                                            4,552          1,386        (3,626)          (449)

General and administrative expenses                                            20             17             -              -
                                                                         --------        -------      --------       --------
Operating income (loss)                                                     4,532          1,369        (3,626)          (449)

Interest expense, net of Holdings' interest
     income of $368 and $931 and Enterprises'
     intercompany interest income of $8,502 and $7,266                      3,073          3,032         5,071          4,887
                                                                         --------        -------      --------       --------
Income (loss) before benefit for income taxes                               1,459         (1,663)       (8,697)        (5,336)

Benefit for income taxes                                                   (1,434)        (1,427)       (1,775)        (1,710)
                                                                         --------        -------      --------       --------
Income (loss) before extraordinary item                                     2,893           (236)       (6,922)        (3,626)

Extraordinary gain on early extinguishment of debt,
     net of income taxes of $5.4 million and
     $3.1 million, respectively                                             8,172          4,742             -              -
                                                                         --------        -------      --------       --------
Net income (loss)                                                        $ 11,065        $ 4,506      $ (6,922)      $ (3,626)
                                                                         ========        =======      ========       ========
</TABLE>



              See notes to parent only financial statement schedules


                                      S-2
<PAGE>

R.A.B. HOLDINGS, INC. - PARENT ONLY
R.A.B. ENTERPRISES, INC. - PARENT ONLY

STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
For the years ended March 31,                                                      2000                            1999
--------------------------------------------------------------------       ------------------------     ---------      -----------
                                                                           Holdings     Enterprises      Holdings      Enterprises
                                                                           ---------    -----------     ---------      -----------
<S>                                                                        <C>          <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                       $ 11,065      $  4,506        $(6,922)       $ (3,626)
   Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
       Equity in net (income) loss of subsidiaries                           (4,506)       (1,386)         3,626             449
       Amortization                                                             129           628            269             576
       Extraordinary gain on early extiguishment of debt,
         net of income taxes                                                 (8,172)       (4,742)             -               -
       Deferred income taxes                                                  1,775         1,710         (1,775)         (1,710)
   Changes in assets and liabilities:
       Intercompany notes receivable                                              -             -              -               -
       Accrued interest                                                      (1,244)         (929)         2,613           5,277
                                                                           --------      --------       --------        --------

Net cash provided by (used in) operating activities                            (953)         (213)        (2,189)            966
                                                                           --------      --------       --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of The B. Manischewitz Company, LLC,
       net of cash acquired                                                       -             -              -        (124,255)
   Equity investment in Enterprises                                               -             -        (29,382)              -
                                                                           --------      --------       --------        --------

Net cash used in investing activities                                             -             -        (29,382)       (124,255)
                                                                           --------      --------       --------        --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of long-term debt                                      -             -         48,000         120,000
    Repurchase of long-term debt                                             (8,750)      (12,266)             -               -
    Payment of debt issuance costs                                                -             -         (1,730)         (4,759)
    Funding of interest escrow account                                            -             -        (16,991)              -
    Payment from interest escrow account                                     10,247             -          3,120               -
    Funding of intercompany note receivable                                       -             -              -         (21,300)
    Proceeds from issuance of purchased stock                                 3,000             -              -               -
    Proceeds from issuance and repurchase
       of common stock                                                           33             -            236               -
    Equity investment from Holdings                                               -             -              -          29,382
    Distributions from subsidiaries                                               -        16,495              -           3,875
    Other                                                                    (3,568)       (4,016)        (1,054)         (3,909)
                                                                           --------      --------       --------        --------

Net cash provided by (used in) financing activities                             962           213         31,581         123,289
                                                                           --------      --------       --------        --------
Net increase (decrease) in cash                                                   9             -             10               -

Cash, beginning of year                                                          10             -              -               -
                                                                           --------      --------       --------        --------

Cash, end of year                                                          $     19      $      -       $     10        $      -
                                                                           ========      ========       ========        ========

Supplemental disclosures of cash flow information:
    Cash paid during the year for:
       Interest                                                            $  4,554      $ 11,946       $  3,120        $  6,300
       Income taxes                                                        $    876      $      -       $      1        $      4
</TABLE>

              See notes to parent only financial statement schedules


                                      S-3
<PAGE>


                       R.A.B. HOLDINGS, INC. - PARENT ONLY
                     R.A.B. ENTERPRISES, INC. - PARENT ONLY

               NOTES TO PARENT ONLY FINANCIAL STATEMENT SCHEDULES


Basis of Presentation

         The accompanying financial statements are presented on the basis of
recording investments in subsidiaries on the equity method of accounting.
Certain reclassifications have been made in the prior year financial statements
to conform with the current year presentation.

         R.A.B. Enterprises, Inc. ("Enterprises") is a wholly owned-subsidiary
of R.A.B. Holdings, Inc. ("Holdings"). On January 26, 1998, Holdings formed
Enterprises and on May 1, 1998 contributed its wholly-owned subsidiary Millbrook
Distribution Services Inc. to Enterprises. This contribution was accounted for
as an "as if" pooling of interests.








                                      S-4

<PAGE>


R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 2000, 1999 AND 1998
(In thousands)
----------------------------------------------------------------------------------------------------------------------------------

                                                                             Additions
                                                                      ------------------------
                                                        Balance at    Charged to    Charged to                        Balance at
                                                        beginning     costs and       other                             end
                      Description                       of period     expenses      accounts(1)      Deductions(2)    of period
---------------------------------------------------    -----------    --------      -----------      -------------    ---------
<S>                                                     <C>             <C>                                 <C>       <C>
Year ended March 31, 2000
        Allowance for doubtful accounts                 $ 3,303         1,032               -               (84)      $  4,251

Year ended March 31, 1999
        Allowance for doubtful accounts                 $ 2,441           152             879              (169)      $  3,303

Year ended March 31, 1998
        Allowance for doubtful accounts                 $ 2,251           415              30              (225)      $  2,441

</TABLE>







(1)  For the year ended March 31, 1999, the amount principally relates to the
     acquisition of The B. Manishewitz Company, LLC.

(2)  Amounts written off.




                                      S-5