<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, 1999

                                       OR

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

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

                        Commission file number 333-66221
                                               ---------
<TABLE>
<S>                                                                  <C>
                 R.A.B. HOLDINGS, INC.                                               R.A.B. ENTERPRISES, INC.
------------------------------------------------------               ------------------------------------------------------
(Exact name of registrant as specified in its charter)               (Exact name of registrant as 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)
</TABLE>

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

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                                                                                                            Page
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<S>            <C>                                                                                           <C>
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
</TABLE>



<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.

         (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, 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 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 improving 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 and
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, 1999 and 1998, specialty
food sales were approximately $141.1 million and $123.2 million and represented
30.3% and 26.2% of Millbrook's total revenues, respectively. Millbrook's
specialty food segment consists of approximately 9,000 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 views its specialty food segment as an opportunity for future
growth. Due to the higher margins associated with specialty foods, supermarkets
are expected to continue adding 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.
Management believes 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
growing 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, 1999 and 1998, health and beauty care sales were approximately
$234.2 million and $240.3 million and represented 50.4% and 51.1% of Millbrook's
total revenues, respectively. Millbrook currently carries approximately 15,000
health and beauty care items, including a full line of national brands and
private labels. Millbrook's private label health and beauty care products are
offered under its ValuStar(Registered) brand, which represents less than 2% 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 stores. In
response to this industry shift, Millbrook's strategy has been to expand its
customer base to include companies such as Ames, Super Kmart 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. Management believes that Millbrook's
capabilities and extensive product selection make it qualified to serve both the
growing mass merchandiser demand and meet the current expanding needs of the
supermarket retailers for health and beauty care items.

         General Merchandise. Millbrook currently carries approximately 11,000
general merchandise items. For the years ended March 31, 1999 and 1998, general
merchandise accounted for approximately $89.5 million and $106.7 million and
represented 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 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, 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 begun 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 has begun
to offer 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(Service Mark)
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. Manufacturers and retailers are beginning to realize that the
frequency of in-store merchandising is growing along with the associated costs.
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
growing third-party service industry. In particular, management believes 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 60% and 50% of its revenues during the years ended
March 31, 1999 and 1998, respectively, have been customers for an average of 14
years. For the year ended March 31, 1999, supermarkets represented approximately
85% of revenues and mass merchandisers represented approximately 15% of
revenues. From 1995 to 1999, revenues from mass merchandisers increased from
less than 1% to approximately 15%. 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.

         Suppliers. Millbrook purchases products from leading suppliers in each
of its categories. For the year ended March 31, 1999, 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 Christie Brown & Company;

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

         (3)  for general merchandise, Rubbermaid, Hartz Mountain Corp., Ecko
              Housewares, Mead, and General Electric Company.

         For the year ended March 31, 1999, the five largest suppliers
represented (i) for specialty foods, 6% of total purchases; (ii) for health and
beauty care products, 21% of total purchases; and (iii) for general
merchandise, 4% 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 $449.0 billion
in 1998 reflecting a compound annual growth rate of 3.0% for the five years
ended 1998. 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 period ended March 31, 1999, licensing represented
less than 2% of Manischewitz' total revenues.

         Baked Products. Baked products include daily matzo, Passover matzo,
which is produced at more exacting standards dictated by religious tenets for
Passover, and crackers. All 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 25.1% of Manischewitz' total revenues in fiscal 1999.
Manischewitz has a license agreement with Goodman's to use its name on matzo
products and matzo-related products through 2003. In fiscal 1999, 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
fish, soups, borscht and other processed foods. The principal product in this
category is gefilte fish, a blended combination of whitefish, pike and carp
manufactured at Manischewitz' Vineland, New Jersey facility. Gefilte fish
constitutes the second largest product line for Manischewitz and accounted for
approximately 13.5% of its total revenues in fiscal 1999.

         Co-Packed Products. Manischewitz markets a number of co-packed
products, including cookies, confectionery products, noodles, pasta and dry soup
mixes under the Manischewitz, Horowitz Margareten and Goodman's 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 1999, spending on
marketing and trade promotion represented approximately 7.4% of total revenues.
This is an increase over previous years. However, as a percentage of revenues,
management believes that marketing and trade promotion expenses have
historically remained substantially below other food manufacturers. As part of
its business strategy, management intends 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 is being
updated to better communicate good taste and high quality and enhance visibility
on store shelves. 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 34% of total revenues in
fiscal 1999. Among its customer base, supermarkets represented approximately 90%
of Manischewitz' fiscal 1999 total revenues and other customers represented
approximately 10%. Management believes that Manischewitz' five largest
supermarket customers are Kroger, Albertson's, Safeway, Shop Rite and Pathmark.
In addition, Manischewitz has recently developed a marketing arrangement with
Wal-Mart to carry Manischewitz' products in its supercenters and general
merchandise stores.

         Management estimates 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.
Management continues to seek to obtain shelf space sections from supermarkets
other than in the kosher aisle. The ability to display Manischewitz' products in
the non-kosher supermarket aisles for products such as cookies, crackers,
noodles and sauces will enhance awareness of Manischewitz products, particularly
among non-Jewish consumers. To support these efforts, management intends to
increase promotional and advertising expenditures to enhance product presence
and increase sales.

Raw Materials

         Manischewitz utilizes a variety of basic 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. 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, Hagemeyer 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.
Management believes 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(Service Mark). Management believes that its principal competitors in
this segment include PIA Merchandising, 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(Registered), Horowitz
Margareten(Registered), Onion Tams(Registered), Passover Pantry(Registered), Tam
Tam(Registered), Vege-Matzo(Registered), Wheat Tams(Registered), Design Star of
David(Registered), Star of David & Lion Design(Registered),
Fishlets(Registered), Design of Star, Lion & Scroll(Registered), Deborah Ross &
Design(Registered), Bakit(Registered), Garlic Tam(Registered) and Horowitz
Margareten & Design(Registered). Manischewitz has granted exclusive licenses to
others for the manufacture and sale of wine, vinegar and certain flavored juice
products, seltzer 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, 1999, Holdings and Enterprises had a total of 1,900
full-time employees, 220 part-time employees and the ability to draw upon 800
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 30 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 2% of Manischewitz' revenues
in fiscal 1999.

                                       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 five distribution centers:


<TABLE>
<CAPTION>
                                                                                                                    Lease
                                                                                                 Approximate     Expiration
Property                                                Location              Own or Lease     Square 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            220,000         08/31/02
Distribution Center.................................    Ozark, AL                  Own             210,000           --
Distribution Center.................................    Greenville, NC            Lease            110,000         03/31/04
</TABLE>

         In addition, Millbrook uses 117 transfer depots located in 33 states.

         Millbrook owns or leases its fleet of approximately 100 tractors, 250
trailers and 275 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>
                                                                                                                    Lease
                                                                                                 Approximate     Expiration
Property                                                Location              Own or Lease     Square 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, 1999 and 1998 and for each of the years in the
two year period ended March 31, 1999 were derived from the audited consolidated
financial statements of Holdings and Enterprises (the "Consolidated Financial
Statements") set forth herein and the audited statement of operations data for
the year ended March 31, 1997 was derived from the financial statement of
Millbrook set forth herein. In addition, the selected consolidated financial
data presented below as of March 31, 1996 and for each of the years in the two
year period 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>

                                                Predecessor                      Holdings                Enterprises
                                    ------------------------------------  ------------------------ ------------------------
For the years ended March 31,          1995        1996        1997          1998         1999        1998        1999
-----------------------------          ----        ----        ----          ----         ----        ----        ----
                                          (Dollars in Thousands)                       (Dollars in Thousands)

<S>                                   <C>        <C>         <C>           <C>          <C>         <C>         <C>
Statement of Operations Data:
Revenues............................  $648,149   $ 563,099   $  476,175    $  470,201   $ 510,563   $ 470,201   $  510,563
Gross profit........................   162,927     132,701      111,413       110,039     125,027     110,039      125,027
Operating expenses..................   139,528     119,090      104,038       102,664     115,103     102,656      115,103
Operating income....................    23,399      13,611        7,375         7,375       9,924       7,383        9,924
Interest expense, net...............     2,806       4,708        3,843         5,079      20,020       5,079       14,949
Non-operating income, other.........        19       1,600           69
Provision (benefit) for income taxes     8,327       4,334        1,660         1,122      (3,174)      1,122       (1,399)
Net income (loss)...................    12,285       6,169        1,941         1,174      (6,922)      1,182       (3,626)
Balance Sheet Data:
Working capital.....................  $ 41,092   $  46,540   $   36,535    $   30,798   $  51,288   $  30,796   $   46,382
Property, plant and equipment, net..    17,294      16,313       15,017        23,395      38,467      23,395       38,467
Total assets........................   132,147     113,026      102,731       108,772     296,943     108,875      278,789
Total debt..........................                                           38,110     184,049      38,110      136,049
</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. 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 from McKesson,
Holdings had no operations. Enterprises, which was formed in 1998 to acquire
Manischewitz, had no operations prior to that 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, 1999 Compared to the Year Ended March 31, 1998

         Revenues. Revenues for the year ended March 31, 1999 increased $40.4
million or 8.6% to $510.6 million as compared to $470.2 million for the year
ended March 31, 1998. Revenues include Manischewitz sales of $48.8 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 $48.8 million
since its acquisition on May 1, 1998 as compared to $50.9 million for the
comparable pre-acquisition period. This decrease is principally comprised of
sales related to Manischewitz's 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.

                                       11

<PAGE>



         Gross Profit. Gross profit for the year ended March 31, 1999 was $125.0
million as compared to $110.0 million for the year ended March 31, 1998, an
increase of $15.0 million or 13.6%. As a percentage of revenues, the gross
profit margin was 24.5% 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 ($19.2 million or 1.5%); 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 $74.2 million as compared to $65.3 million for the year ended
March 31, 1998. The $8.9 million increase as compared to the prior year
consisted of the following:

         (i)    $8.2 million from Manischewitz' operations for the year ended
                March 31, 1999; and

         (ii)   a $0.7 million (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.

                                       12

<PAGE>


         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.

Predecessor Results of Operations

         As a wholly-owned subsidiary of McKesson, Millbrook was provided
certain corporate and general and administrative services, including, among
other things, treasury, certain financial reporting, data processing and legal
services. Accordingly, the historical operations of Millbrook included an
allocation of expenses for such services. Additionally, because McKesson managed
cash and financing requirements centrally, interest expense and borrowing
requirements were based on the then existing capital structure. Millbrook's
financial position and results of operations may differ from results that may
have been achieved had Millbrook operated as an independent entity. Furthermore,
the historical operations of Millbrook do not reflect purchase accounting
adjustments or interest associated with debt incurred to finance the acquisition
of Millbrook by Holdings on March 31, 1997. Therefore, the results of
Millbrook's operations subsequent to its acquisition by Holdings are not
comparable to those of Millbrook prior to its acquisition.

Year Ended March 31, 1998 Compared to the Year Ended March 31, 1997
(predecessor)

         Revenues. Revenues for the year ended March 31, 1998 decreased $6.0
million or 1.2% to $470.2 million as compared to $476.2 million for the year
ended March 31, 1997. The decrease resulted from certain customer losses. These
losses were offset partially by the addition of new customers.

         Gross Profit. Gross profit for the year ended March 31, 1998 was $110.0
million as compared to $111.4 million for the year ended March 31, 1997, a
decrease of 1.2%. As a percentage of revenues, the gross profit margin was 23.4%
for the years ended March 31, 1998 and 1997. The gross profit margin was
consistent with the prior year as the decline in general merchandise gross
profit dollars was offset by increased specialty food gross profit dollars.

         Operating Expenses. Distribution and warehousing expenses for the year
ended March 31, 1998 were $37.3 million as compared to $38.2 million for the
year ended March 31, 1997, a decrease of 2.2%. Selling expenses for the year
ended March 31, 1998 were $43.8 million as compared to $45.3 million for the
year ended March 31, 1997, a decrease of 3.3%. General and administrative
expenses for the year ended March 31, 1998 were $21.6 million. These decreases
principally resulted from operating efficiencies realized subsequent to the
Millbrook acquisition.

         General and administrative expenses for the year ended March 31, 1997
included the allocation of expenses from Millbrook's former parent, McKesson.
These expenses included, among other things, the cost of providing treasury,
certain financial reporting, data processing and legal services. The cost of
these services was comprised of the following: (i) the number of hours incurred
at the applicable pay rate; (ii) data processing time utilized at the applicable
rate; and (iii) out-of-pocket expenses, related to the services provided. In the
opinion of management, this methodology provided a reasonable basis for such
allocation.

                                       13

<PAGE>


         Interest Expense. The interest expense of $5.1 million for the year
ended March 31, 1998 principally relates to amounts borrowed under the credit
agreement for Millbrook's operating needs and to finance Holdings' acquisition
of Millbrook. The average interest rate on debt outstanding during the year
ended March 31, 1998 was 9.6%.

         General, Administrative and Interest Expenses. As a result of the
acquisition of Millbrook by Holdings, general and administrative expenses and
interest expense for the year ended March 31, 1998 are not comparable to such
expenses incurred for the year ended March 31, 1997.

         Taxes. The provision for income taxes was $1.1 million for the year
ended March 31, 1998, representing an effective rate of 48.8%. The effective
income tax rate was significantly higher than the Federal statutory rate due to
state income taxes and the impact of other items, principally the disallowance
of meals and entertainment expenses in relation to pre-tax income.

         Net Income. As a result of the revenues, expenses, and other items
described above, Holdings and Enterprises had net income of $1.2 million for the
year ended March 31, 1998.

Financial Condition, Liquidity and Capital Resources

         Operations for the year ended March 31, 1999, excluding non-cash
charges for depreciation, amortization and deferred income taxes, provided cash
of $0.5 million for Holdings and $5.3 million for Enterprises as compared to
providing cash of $5.5 million for each of Holdings and Enterprises, for the
year ended March 31, 1998. During the years ended March 31, 1999 and 1998, other
changes in assets and liabilities resulting from operating activities provided
cash of $2.5 million for Holdings and $0.9 million for Enterprises and $20.4
million for Holdings and $21.1 million for Enterprises, respectively, resulting
in net cash provided by operating activities of $3.0 million for Holdings and
$6.2 million for Enterprises and $25.9 million for Holdings and $26.6 million
for Enterprises, respectively. Investing activities, which principally consisted
of the acquisition of Manischewitz in the fiscal 1999 period and the
acquisitions of plant and equipment, resulted in a use of cash of $129.3 million
and $2.2 million for Holdings and Enterprises for the years ended March 31, 1999
and 1998, respectively. During the year ended March 31, 1999, financing
activities, which principally consisted of the sale of $168.0 million of senior
notes, offset by debt issuance costs of $6.5 million, the funding of Holdings'
$17.0 million interest escrow account and the repayment of borrowings under the
existing credit agreement of $22.0 million in fiscal 1999, provided cash of
$125.8 million for Holdings and $122.6 million for Enterprises. During the year
ended March 31, 1998, financing activities used cash of $23.7 million for
repayment of borrowings under the credit agreement.

         At March 31, 1999, outstanding borrowings under the credit agreement
were $16.0 million, consisting of $7.7 million of revolving credit loans and an
amortizing term loan of $8.3 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, 1999, Millbrook and Manischewitz had approximately $2.1
million of cash and approximately $81.0 million of available borrowing capacity
under the credit agreement. In addition, there were $2.0 million of cumulative
unpaid dividends on Holdings' series A preferred stock.

                                       14

<PAGE>



         Following March 31, 1999, the stockholders of Holdings purchased $3.0
million of additional preferred stock to partially fund Holdings' repurchase of
approximately $23.0 million of its outstanding 13% senior notes. The resulting
gains from the early extinguishment of this debt and the repurchase by
Enterprises of approximately $12.0 million of its outstanding 10.5% senior notes
will be recorded in Holdings' and Enterprises' condensed consolidated financial
statements for the fiscal quarter ending June 30, 1999. Enterprises' senior
notes are fully and unconditionally guaranteed on a joint and several basis by
Millbrook and Manischewitz.

         Holdings and Enterprises expect capital expenditure spending for the
year ending March 31, 2000 to be approximately $6.5 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 2000 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 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, 1999, Holdings and Enterprises had total outstanding indebtedness
of $184.0 million and $136.0 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.

Year 2000 Issue

         We utilize computer technologies throughout our business to effectively
carry out day-to-day operations. Computer technologies include both information
technology in the form of hardware and software, as well as embedded technology
in our facilities and equipment. Similar to most companies, as the year 2000
approaches we must determine if our systems are capable of properly recognizing
and processing date sensitive information. We are using a multi-phased
concurrent approach to address the year 2000 project, which includes the
awareness, assessment, remediation, validation and implementation phases. We
have completed the awareness and assessment phases of the project and are
significantly involved in the remediation phase. We are actively correcting and
replacing those systems which are not year 2000 ready to ensure our ability to
continue to meet the internal needs of our organization and the needs of our
suppliers and customers. We currently intend to substantially complete the
remediation, validation and implementation phases of the year 2000 project
before July 31, 1999. This process includes the testing of critical systems to
ensure that year 2000 readiness has been accomplished. We currently believe we
will be able to modify, replace or mitigate the affected systems in time to
avoid any material detrimental impact on operations. If we determine that we may
be unable to remediate and properly test affected systems on a timely basis, we
intend to develop appropriate contingency plans that will sufficiently mitigate
the risk of a year 2000 readiness problem. An interruption of our ability to
conduct business due to a year 2000 readiness problem could have a material
adverse effect.

                                       15

<PAGE>



         We estimate that the aggregate costs of the year 2000 project will be
approximately $1.25 million, including costs already incurred of approximately
$0.7 million through March 31, 1999. The anticipated impact and costs of the
project, as well as the date on which we expect to complete the project, are
based on management's best estimates using information currently available and
numerous assumptions about future events. However, there can be no guarantee
that these estimates will be achieved and actual results may differ materially
from those plans. Based upon our current estimates and information currently
available, we do not anticipate that the costs associated with this project will
have a material adverse effect on our consolidated financial position, results
of operations or cash flows in future periods.

         We have contacted our significant suppliers, customers, and critical
business partners to determine the extent to which we may be vulnerable if these
third parties fail to remediate properly their own year 2000 issues. As the year
2000 approaches we have taken steps to monitor the progress made by these third
parties and intend to test critical system interfaces. We will develop
appropriate contingency plans if a significant exposure is identified relative
to dependencies on third parties systems. While we are not aware presently of
any such significant exposure, there can be no guarantee that the systems of
third parties will be converted in a timely manner. Since we rely on certain
other companies, a failure of these other companies to properly convert its
systems could have a material adverse effect on us.

Effects of Inflation and Other Matters

         For the year ended March 31, 1999, 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 is
effective for fiscal years beginning after June 15, 1999. SFAS No. 133 requires
the recognition of all derivatives in the consolidated balance sheet as either
assets or liabilities measured at fair value. Recently, an exposure draft was
issued which would delay the effective date one year. 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.


                                       16
<PAGE>

         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:

<TABLE>
<CAPTION>
Name                           Age     Position
---------------------        -------   ----------------------------------------------------------------
<S>                            <C>     <C>
Richard A. Bernstein*          52      Chairman, President, Chief Executive Officer and Director
Lewis J. Korman*               54      Vice Chairman and Director
Steven M. Grossman*            38      Executive Vice President, Chief Financial Officer, Treasurer and
                                       Director
James A. Cohen, Esq.*          53      Senior Vice President - Legal Affairs and Secretary and Director
                                       of Enterprises
Ira A. Gomberg*                55      Senior Vice President
Hal B. Weiss*                  42      Assistant Treasurer
Richard H. Hochman             53      Director of Holdings
Jenny Morgenthau               54      Director of Holdings
Michael A. Pietrangelo         57      Director of Holdings

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

Senior executive officer of Millbrook:
         Robert A. Sigel       45      President and Chief Executive Officer of Millbrook and Director
                                       of Holdings

Senior executive officer of Manischewitz:
         Dennis M. Newnham     58      President and Chief Executive Officer of Manischewitz and
                                       Director of Holdings
</TABLE>

         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
December, 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 subsidiary, Breguet LLC, to distribute Breguet(Registered) watches
and time pieces 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 a non-affiliated company engaged in the marketing and
distribution of products designed to enhance wellness and beauty. He also serves
as a consultant to companies 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 Breguet 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 Breguet 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 Breguet 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 Breguet
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
Lite-Flite, Ltd.

         Jenny Morgenthau has been Chief Executive Officer of The Fresh Air
Fund, one of New York's preeminent charitable corporations, for more than the
past five years. 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 a partner 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(1)       Salary($)      Bonus($)         ($)             (#)
---------------------------               -------       ---------      --------     ------------    ------------

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

Richard A. Bernstein                       1999         $     --       $    --         $   --            --
     Chairman, President and Chief         1998         $     --       $    --         $   --            --
     Executive Officer                     1997         $     --       $    --         $   --            --

Steven M. Grossman                         1999         $225,000       $    --         $5,040            --
     Executive Vice President,             1998         $178,750       $    --         $5,060            --
     Chief Financial Officer and           1997         $     --       $    --         $   --            --
     Treasurer

James A. Cohen                             1999         $160,000       $    --         $4,200            --
     Senior Vice President - Legal         1998         $120,000       $    --         $3,680            --
     Affairs                               1997         $     --       $    --         $   --            --

Millbrook

Robert A. Sigel                            1999         $368,319       $    --         $9,548            --
     Chief Executive Officer               1998         $355,623       $82,330(2)      $8,228(3)         --
     and President of Millbrook            1997         $220,000       $ 4,099         $9,000(3)         --

Manischewitz

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

(1) Holdings and Enterprises had no operations prior to April 1, 1997.
(2) 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.
(3) Other Annual Compensation excludes any amounts paid to Mr. Sigel, in his
    capacity as a Corporate Vice President of McKesson Corporation.
(4) 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, 1999, 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>
                                                                                       Number of
                                                      Number of                        Shares of
                                                      Shares of     Percentage of       Series A      Percentage of
                                                     Common Stock    Total Shares   Preferred Stock   Total Shares
                                                     of Holdings      of Common       of Holdings     of Preferred
Name of                                              Beneficially      Stock of       Beneficially      Stock of
Benefical Owner                                         Owned          Holdings          Owned          Holdings
---------------                                      ------------   -------------   ---------------   -------------

<S>                                                     <C>               <C>           <C>               <C>
Richard A. Bernstein...............................     42,500            40.8%         10,000            50.0%
Robert A. Sigel....................................      6,600             6.3             200             1.0
James A. Cohen, Esq................................      3,610             3.5             120              .6
Steven M. Grossman.................................      3,490             3.4              80              .4
Lewis J. Korman....................................      3,450             3.3             400             2.0
Dennis M. Newnham..................................      3,000             2.9              --              --
Ira A. Gomberg.....................................      2,850             2.7             200             1.0
Hal B. Weiss.......................................      1,460             1.4             120              .6
Richard H. Hochman.................................      1,200             1.2             400             2.0
Michael A. Pietrangelo.............................        360              .3             120              .6
Jenny Morgenthau...................................        300              .3             100              .5
All directors and executive officers as a group
(11 persons).......................................     68,820            66.1%         11,740            58.7%
</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, Suite 190
                                            International Plaza
                                            6410 Poplar
                                            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, 1999, P&E Properties was (i) paid
$400,000 in management fees by Millbrook; (ii) reimbursed $800,000 for
reasonable services provided to Millbrook; and (iii) reimbursed $150,000 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 1999, Millbrook and Manischewitz reimbursed P&E Properties
approximately $169,000 and $25,000, 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, 1999, Dennis M. Newnham, the Chief Executive Officer and
President of Manischewitz, had an outstanding loan with Holdings in the amount
of $75,300 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 1999.
                    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 Incorporation of
                              R.A.B. Holdings, Inc. (incorporated by reference
                              to Exhibit 3.2 to the Registration Statement).

               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).

               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).


                                       26
<PAGE>

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

               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.

               *10.1.2        Amendment dated as of February 19, 1999 to the
                              Amended and Restated Credit Agreement, dated as
                              of May 1, 1998.

               *10.1.3        Amendment dated as of March 24, 1999 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 25th day of June, 1999.

                                              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       June 25, 1999
---------------------------  and Director
Richard A. Bernstein              (principal executive officer)


/s/ Steven M. Grossman       Executive Vice President, Chief Financial          June 25, 1999
---------------------------  Officer, Treasurer and Director
Steven M. Grossman                (principal financial and accounting officer)


/s/ Lewis J. Korman          Vice Chairman and Director                         June 25, 1999
---------------------------
Lewis J. Korman


/s/ Robert A. Sigel          Director                                           June 25, 1999
---------------------------
Robert A. Sigel


/s/ Dennis M. Newnham        Director                                           June 25, 1999
---------------------------
Dennis M. Newnham


/s/ Richard H. Hochman       Director                                           June 25, 1999
---------------------------
Richard H. Hochman


/s/ Jenny Morgenthau         Director                                           June 25, 1999
---------------------------
Jenny Morgenthau


/s/ Michael A. Pietrangelo   Director                                           June 25, 1999
---------------------------
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 25th day of June, 1999.

                                              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       June 25, 1999
---------------------------  and Director
Richard A. Bernstein              (principal executive officer)


/s/ Steven M. Grossman       Executive Vice President, Chief Financial          June 25, 1999
---------------------------  Officer, Treasurer and Director
Steven M. Grossman                (principal financial and accounting officer)


/s/ Lewis J. Korman          Vice Chairman and Director                         June 25, 1999
---------------------------
Lewis J. Korman


/s/ James A. Cohen           Senior Vice President - Legal Affairs,             June 25, 1999
---------------------------  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, 1999 and 1998....................................................         F-3
  Consolidated Statements of Operations for the Years Ended
     March 31, 1999 and 1998...................................................................................         F-4
  Consolidated Statements of Stockholders' Equity (Holdings) for the Years Ended
     March 31, 1999 and 1998 and for the period ended March 31, 1997...........................................         F-5
  Consolidated Statements of Stockholder's Equity (Enterprises) for the Years Ended
     March 31, 1999 and 1998 and for the period ended March 31, 1997...........................................         F-6
  Consolidated Statements of Cash Flows for the Years Ended
     March 31, 1999 and 1998 and for the period ended March 31, 1997...........................................         F-7
  Notes to Consolidated Financial Statements...................................................................         F-8

Financial Statement of Millbrook Distribution Services Inc.
  Independent Auditors' Report.................................................................................        F-23
  Statement of Operations for the Year Ended March 31, 1997....................................................        F-24
  Notes to Statement of Operations.............................................................................        F-25

  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 generally accepted auditing
standards. 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, 1999
and 1998, and the results of their operations for the years then ended and their
cash flows for the years then ended and for the period from May 6, 1996 (date of
inception) to March 31, 1997 in conformity with generally accepted accounting
principles. 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 22, 1999
New York, New York


                                      F-2

<PAGE>

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

<TABLE>
<CAPTION>

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

March 31,                                                                       1999                    1998
--------------------------------------------------------------------  -----------------------  -----------------------
                                                                       Holdings   Enterprises   Holdings   Enterprises
                                                                      ----------  -----------  ---------   -----------
<S>                                                                    <C>         <C>         <C>         <C>
                               ASSETS
Current assets:
  Cash                                                                 $   2,088   $   2,078   $   2,623   $   2,623
  Accounts receivable                                                     52,989      52,989      27,942      27,942
  Inventories                                                             62,061      62,061      41,814      41,814
  Restricted investments                                                   5,805           -           -           -
  Other current assets                                                    11,640       9,848       5,707       5,703
                                                                       ---------   ---------   ---------   ---------
     Total current assets                                                134,583     126,976      78,086      78,082
Noncurrent assets:
  Restricted investments                                                   8,880           -           -           -
  Other assets                                                            14,935      13,268       7,291       7,398
                                                                       ---------   ---------   ---------   ---------
     Total noncurrent assets                                              23,815      13,268       7,291       7,398
Property, plant and equipment, net                                        38,467      38,467      23,395      23,395
Intangibles, net                                                         100,078     100,078           -           -
                                                                       ---------   ---------   ---------   ---------

Total assets                                                           $ 296,943   $ 278,789   $ 108,772   $ 108,875
                                                                       =========   =========   =========   =========

               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current maturities of long-term debt                                 $   1,291     $ 1,291   $     815   $     815
  Accounts payable                                                        55,866      55,866      31,035      31,035
  Other current liabilities                                               26,138      23,437      15,438      15,436
                                                                       ---------   ---------   ---------   ---------
     Total current liabilities                                            83,295      80,594      47,288      47,286
Noncurrent liabilities:
  Long-term debt                                                         182,758     134,758      37,295      37,295
  Deferred compensation                                                    9,095       9,095       7,801       7,801
  Deferred income taxes                                                    8,860       8,860         795         795
  Other liabilities                                                        8,304       8,304       4,416       4,416
                                                                       ---------   ---------   ---------   ---------
     Total noncurrent liabilities                                        209,017     161,017      50,307      50,307

Commitments and contingencies

Stockholders' equity:
  Preferred stock, no par value, 100,000 shares authorized,
    issued 20,000 shares of Series A                                       9,906           -       9,906           -
  Common stock, $.01 and $1.00 par value, 1,000,000 shares
    and 200 shares authorized, issued 104,100 shares and
    200 shares at March 31, 1999 and 100,000 shares and
    200 shares at March 31, 1998, respectively                                 1           -           1           -
  Additional paid-in capital                                                 332      39,482          98      10,100
  Retained earnings (deficit)                                             (5,748)     (2,444)      1,174       1,182
  Accumulated other comprehensive income                                     140         140           -           -
                                                                       ---------   ---------   ---------   ---------
                                                                           4,631      37,178      11,179      11,282
  Less common stock in treasury - 1,600 shares                                 -           -           2           -
                                                                       ---------   ---------   ---------   ---------
     Total stockholders' equity                                            4,631      37,178      11,177      11,282
                                                                       ---------   ---------   ---------   ---------
Total liabilities and stockholders' equity                             $ 296,943   $ 278,789   $ 108,772   $ 108,875
                                                                       =========   =========   =========   =========
</TABLE>

          See notes to Consolidated Financial Statements


                                      F-3

<PAGE>

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

<TABLE>
<CAPTION>

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

For the years ended March 31,                                               1999                      1998
------------------------------------------------------------------  -----------------------  ------------------------
                                                                    Holdings    Enterprises    Holdings   Enterprises
                                                                   ----------   -----------  -----------  -----------
<S>                                                                 <C>          <C>          <C>          <C>
Revenues                                                            $510,563     $ 510,563    $ 470,201     $470,201

Costs and expenses:
  Cost of sales                                                      385,536       385,536      360,162      360,162
  Selling                                                             50,385        50,385       43,766       43,766
  Distribution and warehousing                                        38,067        38,067       37,339       37,339
  General and administrative                                          23,861        23,861       21,559       21,551
  Amortization of intangibles                                          2,790         2,790            -            -
                                                                    --------    ----------    ---------     --------
      Total costs and expenses                                       500,639       500,639      462,826      462,818
                                                                    --------    ----------    ---------     --------
Operating income                                                       9,924         9,924        7,375        7,383

Interest expense, net                                                 20,020        14,949        5,079        5,079
                                                                    --------    ----------    ---------     --------

(Loss) income before (benefit) provision for income taxes            (10,096)       (5,025)       2,296        2,304

(Benefit) provision for income taxes                                  (3,174)       (1,399)       1,122        1,122
                                                                    --------    ----------    ---------     --------

Net (loss) income                                                   $ (6,922)   $   (3,626)   $   1,174     $  1,182
                                                                    ========    ==========    =========     ========
</TABLE>


                 See notes to Consolidated Financial Statements



                                      F-4

<PAGE>

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

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands except for share data)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Period from May 6, 1996
                                                                                                           (date of inception) to
For the periods ended March 31,                                   1999                 1998                        1997
---------------------------------------------------------- -------------------     -------------------      ------------------
                                                            Shares    Amounts        Shares    Amounts       Shares    Amounts
                                                           --------  ---------      --------  ---------     --------  ---------
<S>                                                        <C>         <C>          <C>         <C>          <C>       <C>
Preferred stock, no par value, 100,000
   shares authorized:
     Balance at beginning of period                         20,000     $ 9,906       20,000     $ 9,906           -    $      -
     Issuance of stock                                           -           -            -           -      20,000       9,906
                                                           -------     -------      -------     -------      ------    --------
     Balance at end of period                               20,000       9,906       20,000       9,906      20,000       9,906
                                                           -------     -------      -------     -------      ------    --------
Common stock, $.01 par value, 1,000,000
   shares authorized:
     Balance at beginning of period                        100,000           1       99,000           1           -           -
     Issuance of stock                                       4,100           -        1,000           -      99,000           1
                                                           -------     -------      -------     -------      ------    --------
     Total                                                 104,100           1      100,000           1      99,000           1
                                                           -------     -------      -------     -------      ------    --------
     Treasury shares at beginning of period                 (1,600)         (2)           -           -           -           -
     Purchase of treasury shares                            (2,800)         (4)      (1,600)         (2)          -           -
     Issuance of stock                                       4,400           6            -           -           -           -
                                                           -------     -------      -------     -------      ------    --------
     Treasury shares at end of period                            -           -       (1,600)         (2)          -           -
                                                           -------     -------      -------     -------      ------    --------
     Balance at end of period                              104,100           1       98,400          (1)     99,000           1
                                                           -------     -------      -------     -------      ------    --------
 Additional paid-in capital:
     Balance at beginning of period                                         98                       97                       -
     Issuance of treasury shares and common stock                          234                        1                      97
                                                                       -------                  -------                --------
     Balance at end of period                                              332                       98                      97
                                                                       -------                  -------                --------
Retained earnings (deficit):
     Balance at beginning of period                                      1,174                        -                       -
     Net (loss) income                                                  (6,922)                   1,174                       -
                                                                       -------                  -------                --------
     Balance at end of period                                           (5,748)                   1,174                       -
                                                                       -------                  -------                --------

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

Total stockholders' equity                                             $ 4,631                  $11,177                $ 10,004
                                                                       =======                  =======                ========

</TABLE>

                 See notes to Consolidated Financial Statements



                                      F-5

<PAGE>

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

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(In thousands except for share data)
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Period from May 6, 1996
                                                                                                           (date of inception) to
For the periods ended March 31,                             1999                          1998                      1997
------------------------------------------------  ------------------------      -----------------------   -----------------------
                                                    Shares        Amounts        Shares        Amounts     Shares        Amounts
                                                  ---------      ---------      --------      ---------   --------      ---------
<S>                                                <C>            <C>            <C>          <C>          <C>           <C>
Common stock, $1.00 par value, 200
   shares authorized:
     Balance at beginning of period                    200        $      -           200      $      -            -      $     -
     Issuance of stock                                   -               -             -             -          200            -
                                                   -------        --------       -------      --------     --------      -------
     Balance at end of period                          200               -           200             -          200            -
                                                   -------        --------       -------      --------     --------      -------

Additional paid-in capital:
     Balance at beginning of period                                 10,100                      10,100                         -
     Equity investment from Holdings                                29,382                           -                    10,100
                                                                  --------                    --------                   -------
     Balance at end of period                                       39,482                      10,100                    10,100
                                                                  --------                    --------                   -------
 Retained earnings (deficit):
     Balance at beginning of period                                  1,182                           -                         -
     Net (loss) income                                              (3,626)                      1,182                         -
                                                                  --------                    --------                   -------
     Balance at end of period                                       (2,444)                      1,182                         -
                                                                  --------                    --------                   -------

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

Total stockholder's equity                                        $ 37,178                    $ 11,282                   $10,100
                                                                  ========                    ========                   =======
</TABLE>


                 See notes to Consolidated Financial Statements


                                      F-6

<PAGE>
<TABLE>
<CAPTION>
R.A.B. HOLDINGS, INC. AND SUBSIDIARIES
R.A.B. ENTERPRISES, INC. AND SUBSIDIARIES

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

                                                                                                          Period from May 6, 1996
                                                                                                           (date of inception) to
For the periods ended March 31,                                   1999                   1998                       1997
----------------------------------------------------     ----------------------  ----------------------   -----------------------
                                                         Holdings   Enterprises  Holdings   Enterprises   Holdings   Enterprises
                                                         --------   -----------  --------   -----------   --------   ------------

<S>                                                      <C>         <C>         <C>          <C>         <C>          <C>
Cash flows from operating activities:
  Net (loss) income                                      $ (6,922)   $  (3,626)  $  1,174     $  1,182
  Adjustments to reconcile net (loss) income to net
    cash provided by (used in) operating activities:
      Depreciation and amortization                         7,027        6,758      4,471        4,471
      Amortization of intangibles                           2,790        2,790          -            -
      Gain on disposition of equipment                        (82)         (82)       (20)         (20)
      Deferred income taxes                                (2,388)        (613)      (106)        (106)
  Changes in assets and liabilities:
      Accounts receivable                                  (8,461)      (8,461)     1,950        1,950
      Inventories                                         (13,750)     (13,750)    10,457       10,457
      Other current assets                                 (1,942)      (1,822)     3,773        3,545
      Accounts payable                                     22,331       22,331      1,952        1,952
      Other current liabilities                             6,786        4,087      3,729        4,789
      Other assets and liabilities                         (2,398)      (1,378)    (1,477)      (1,584)
                                                         --------    ---------   --------     --------    --------     --------

Net cash provided by operating activities                   2,991        6,234     25,903       26,636
                                                         --------    ---------   --------     --------    --------     --------

Cash flows from investing activities:
  Purchase of Millbrook Distribution Services Inc.              -            -          -            -     (69,167)     (69,167)
  Purchase of The B. Manischewitz Company, LLC,
    net of cash acquired                                 (126,155)    (126,155)         -            -
  Acquisitions of plant and equipment                      (3,419)      (3,419)    (2,309)      (2,309)
  Proceeds from disposition of equipment                      233          233         83           83
                                                         --------    ---------   --------     --------    --------     --------

Net cash used in investing activities                    (129,341)    (129,341)    (2,226)      (2,226)    (69,167)     (69,167)
                                                         --------    ---------   --------     --------    --------     --------

Cash flows from financing activities:
  Proceeds from issuance of long-term debt                168,000      120,000          -            -
  Payment of debt issuance costs                           (6,489)      (4,759)         -            -
  Funding of interest escrow account                      (16,991)           -          -            -
  Payment from interest escrow account                      3,120            -          -            -
  (Repayments) borrowings under Credit Agreement          (22,061)     (22,061)   (23,690)     (23,690)     61,800       61,800
  Proceeds from the issuance of preferred stock                 -            -          -            -       9,906
  Proceeds from issuance and repurchase of
    common stock                                              236            -         (1)           -          98
  Equity investment from Holdings                               -       29,382          -            -                   10,100
  Other                                                         -            -          -            -                     (830)
                                                         --------    ---------   --------     --------    --------     --------

Net cash provided by (used in) financing activities       125,815      122,562    (23,691)     (23,690)     71,804       71,070
                                                         --------    ---------   --------     --------    --------     --------

Net (decrease) increase  in cash                             (535)        (545)       (14)         720       2,637        1,903

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

Cash, end of year                                        $  2,088    $   2,078   $  2,623     $  2,623    $  2,637     $  1,903
                                                         ========    =========   ========     ========    ========     ========

Supplemental disclosures of cash flow information:
  Cash paid during the year for:
    Interest                                             $ 11,229    $   8,109   $  4,054      $ 4,054    $      -     $      -
    Income taxes                                         $    828    $     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 prior year items have been
         reclassified to conform to 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, 1999 and 1998, the replacement cost of inventories valued
         using the LIFO method exceeded the net carrying amount of such
         inventories by approximately $322,000 and $255,000, respectively.

                  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 certain 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,
         1999 and 1998, Holdings' and Enterprises' comprehensive (loss) income
         was ($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, 1999. SFAS No. 133 requires the
         recognition of all derivatives in the consolidated balance sheet as
         either assets or liabilities measured at fair value. Recently, an
         exposure draft was issued which would delay the effective date one
         year. 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>

3.       Accounts Receivable

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

                  March 31,                                  1999       1998
                  --------------------------------------   --------   -------

                  Accounts receivable...................   $56,292    $30,383
                  Allowance for doubtful accounts.......    (3,303)    (2,441)
                                                           -------    -------
                                                           $52,989    $27,942
                                                           =======    =======
4.       Inventories

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

                  March 31,                                  1999       1998
                  --------------------------------------   --------   -------

                  Raw materials.........................   $ 1,219    $     -
                  Finished goods........................    60,842     41,814
                                                           -------    -------
                                                           $62,061    $41,814
                                                           =======    =======


                                      F-11

<PAGE>

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

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


5.       Property, Plant & Equipment

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

<TABLE>
<CAPTION>
                  March 31,                                           1999        1998
                  -------------------------------------------------  -------    -------

                  <S>                                                <C>        <C>
                  Land.............................................  $ 2,936    $ 1,561
                  Buildings and improvements.......................   16,679      9,393
                  Machinery and equipment..........................   24,630     12,902
                  Rolling stock....................................    3,277      3,398
                  Work in progress.................................       54        201
                                                                     -------    -------
                                                                      47,576     27,455
                  Less accumulated depreciation and amortization...    9,109      4,060
                                                                     -------    -------
                                                                     $38,467    $23,395
                                                                     =======    =======
</TABLE>

6.       Intangibles

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

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

                  Trademarks and trade names.........................  $ 42,000
                  Distributorship and trademark license agreements...     4,400
                  Excess of cost over net assets acquired............    56,468
                                                                       --------
                                                                        102,868
                  Less accumulated amortization......................    (2,790)
                                                                       --------
                                                                       $100,078
                                                                       ========

7.       Other Current Liabilities

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

<TABLE>
<CAPTION>
                  March 31,                                          1999                     1998
                  --------------------------------------   ------------------------   -----------------------
                                                            Holdings    Enterprises   Holdings    Enterprises
                                                            --------    -----------   --------    -----------

                  <S>                                       <C>           <C>         <C>            <C>
                  Accrued compensation and
                       fringe benefits..................    $ 9,306       $ 9,306     $ 8,015        $ 8,015
                  Accrued interest......................      8,098         5,491         127            127
                  Accrued liabilities...................      8,734         8,640       7,296          7,294
                                                            -------       -------     -------        -------
                                                            $26,138       $23,437     $15,438        $15,436
                                                            =======       =======     =======        =======
</TABLE>


                                      F-12
<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

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

<TABLE>
<CAPTION>
                  March 31,                                       1999                   1998
                  ---------------------------------------  ----------------------    ------------
                                                                                     Holdings and
                                                           Holdings   Enterprises     Enterprises
                                                           --------   -----------    ------------

                  <S>                                      <C>          <C>            <C>
                  10.5% Notes due 2005...................  $120,000     $120,000       $     -
                  13% Notes due 2008.....................    48,000            -             -
                  Revolving credit facility..............     7,673        7,673        28,800
                  Term loan..............................     8,376        8,376         9,310
                                                           --------     --------       -------
                                                            184,049      136,049        38,110
                  Less current maturities................     1,291        1,291           815
                                                           --------     --------       -------
                                                           $182,758     $134,758       $37,295
                                                           ========     ========       =======
</TABLE>


                  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. Borrowings under this long-term facility, which
         principally expires March 31, 2002, 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, 1999, substantially all of
         the assets of Enterprises' subsidiaries are unavailable for dividends.
         At March 31, 1999, Millbrook and Manischewitz had available, under the
         Credit Agreement, unused borrowing capacity of approximately $81
         million, net of outstanding letters of credit of approximately $1.1
         million.


                                      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)

                  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, 1999, is based upon
         availability pursuant to the borrowing base calculation. At March 31,
         1999 and 1998, borrowings under the LIBO and alternate base rate
         options were $15,376,000 and $673,000, and $36,310,000 and $1,800,000,
         respectively. At March 31, 1999, the interest rate on the outstanding
         LIBO and alternate base rate loans ranged from 6.47% to 6.75%. 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,
         1999 and 1998, 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, 1999, the fair value of Holdings' 13% Notes and
         Enterprises' 10.5% Notes was $19.2 million and $72 million,
         respectively.

                  Following March 31, 1999, the stockholders of Holdings
         purchased $3 million of additional preferred stock to partially fund
         Holdings' repurchase of approximately $23 million of its outstanding
         13% Notes. The resulting gains from the early extinguishment of this
         debt and the repurchase by Enterprises of approximately $12 million of
         its outstanding 10.5% Notes will be recorded in the Companies condensed
         consolidated financial statements for the fiscal quarter ending June
         30, 1999.

                  Future maturities of long-term debt at March 31, 1999 were as
         follows (in thousands):

                                                           Holdings  Enterprises
                                                           --------  -----------
                  2000..................................   $  1,291   $  1,291
                  2001..................................      1,946      1,946
                  2002..................................      9,619      9,619
                  2003..................................      3,193      3,193
                  2004..................................          -          -
                  Thereafter............................    168,000    120,000
                                                           --------   --------
                                                           $184,049   $136,049
                                                           ========   ========


                                      F-14
<PAGE>

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

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


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.

                  The holders of the Series A Preferred Stock are entitled to
         cumulative preferential cash dividends of $50 per year (10%), per
         share. At March 31, 1999, the amount of accumulated unpaid dividends on
         the Series A Preferred Stock was $100.00 per share. Unless all
         accumulated and unpaid dividends on the Series A Preferred Stock are
         paid, no dividends shall be declared or paid on Holdings' Common Stock.
         The Preferred Stock is 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.

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, 1999 were as follows
         (in thousands):

                  2000..............................................   $ 3,202
                  2001..............................................     2,887
                  2002..............................................     2,711
                  2003..............................................     2,002
                  2004..............................................     1,444
                  Thereafter........................................     2,997
                                                                       -------
                                                                       $15,243
                                                                       =======

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

         Commitments

                  At March 31, 1999, Manischewitz had approximately $1.5 million
         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-15
<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,                                         1999                   1998
                  --------------------------------------   -----------------------    -------------
                                                                                       Holdings and
                                                            Holdings   Enterprises      Enterprises
                                                            --------   -----------    -------------

                  <S>                                       <C>          <C>              <C>
                  Currently (receivable) payable:
                     Federal............................    $  (671)     $  (671)         $1,075
                     State..............................       (115)        (115)            153
                                                            -------      -------          ------
                                                               (786)        (786)          1,228
                                                            -------      -------          ------
                  Deferred (benefit) liability:
                     Federal............................     (2,582)        (807)            (93)
                     State..............................        194          194             (13)
                                                            -------      -------          ------
                                                             (2,388)        (613)           (106)
                                                            -------      -------          ------
                                                            $(3,174)     $(1,399)         $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,                                1999                          1998
         -----------------------------------------------   ---------------------------     -------------------------
                                                            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..........................        .5             1.0            4.6             4.6
         Nondeductible amortization of
               intangibles..............................       4.5             9.0            -               -
         Other, principally meals and
               entertainment disallowance in 1998.......      (1.4)           (2.8)           9.2             9.1
                                                             -----           -----           ----            ----
                                                             (31.4%)         (27.8%)         48.8%           48.7%
                                                             =====           =====           ====            ====
</TABLE>


                                      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 (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>

         March 31,                                                   1999                      1998
         -----------------------------------------------   ------------------------        ------------
                                                                                           Holdings and
                                                            Holdings   Enterprises          Enterprises
                                                            --------   -----------         ------------

         <S>                                                <C>          <C>                 <C>
         Deferred Tax Assets:
             Accounts receivable, principally due to
              allowances for doubtful accounts..........    $ 1,883      $ 1,883             $   993
             Deferred compensation......................      3,800        3,800               3,279
             Net operating loss carryforwards...........      5,164        3,034                  -
             Liability accruals.........................      6,123        6,123               3,771
             Other, net.................................        623          623                 359

         Deferred Tax Liabilities:
             Inventories, principally due to
              acquisition basis differences and
              financial statement allowances............     (5,651)      (5,651)             (5,612)
             Property, plant & equipment, principally
              due to basis differences..................     (6,846)      (6,846)             (4,567)
             Identified intangibles, due to
              basis differences.........................     (9,456)      (9,456)                 -
                                                            -------      -------             -------
             Net deferred tax liabilities before
              valuation allowances......................     (4,360)      (6,490)             (1,777)
             Valuation allowances.......................       (697)        (342)                 -
                                                            -------      -------             -------
             Net deferred tax liabilities...............    $(5,057)     $(6,832)            $(1,777)
                                                            =======      =======             =======
</TABLE>

                  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 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 expire at
         various dates through 2019. The valuation allowance represents state
         net operating loss carryforwards, which management believes that it is
         more likely than not that the carryforward benefits will not be
         realized, as Holdings and Enterprises file separate state income tax
         returns which do not have income from operations.


                                      F-17
<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
         the years ended March 31, 1999 and 1998, the Companies' provided
         approximately $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, 1999, future payment obligations under the
         deferred compensation arrangement were approximately $406,000,
         $406,000, $403,000, $401,000 and $401,000 for the years ended March 31,
         2000, 2001, 2002, 2003 and 2004, respectively.


                                      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 (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,                                           1999
                  --------------------------------------------------------------  ------------------------
                                                                                                Other
                                                                                  Pension   Postretirement
                                                                                  Benefits     Benefits
                                                                                  --------  --------------

                  <S>                                                             <C>           <C>
                  Change in benefit obligation
                  Benefit obligation at beginning of period.....................  $13,138       $ 1,622
                  Service cost..................................................      223            24
                  Interest cost.................................................      818           101
                  Actuarial gain................................................      522            35
                  Amendments....................................................     (381)           -
                  Benefits paid.................................................     (839)          (85)
                                                                                  -------       -------
                  Benefit obligation at end of period...........................   13,481         1,697
                                                                                  -------       -------

                  Change in plan assets
                  Fair value of plan assets at beginning of period..............   10,442            -
                  Actual return on plan assets..................................      873            -
                  Employer contributions........................................      915            85
                  Benefits paid.................................................     (839)          (85)
                                                                                  -------       -------
                  Fair value of plan assets at end of period....................   11,391            -
                                                                                  -------       -------

                  Funded status.................................................   (2,090)       (1,697)
                  Unrecognized actuarial loss...................................      175            35
                                                                                  -------       -------
                  Net amount recognized.........................................  $(1,915)      $(1,662)
                                                                                  =======       =======

                  Amount recognized in the statement
                    of financial position consists of:
                  Accrued benefit liability.....................................  $(1,915)      $(1,662)
                  Accumulated other comprehensive income........................     (122)           -
                                                                                  -------       -------
                  Net amount recognized.........................................  $(2,037)      $(1,662)
                                                                                  =======       =======

                  Weighted-average assumptions:
                  Discount rate.................................................     6.75%         6.75%
                  Expected return on assets.....................................     7.50%           -
                  Rate of compensation increase.................................     4.00%           -
</TABLE>

                  For measurement purposes, an 8.5% annual rate of increase in
         the per capita cost of covered health care benefits was assumed for
         1999. The rate was assumed to decrease by one quarter of 1% per year to
         5% in 2010 and remain at that level thereafter.


                                      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)

<TABLE>
<CAPTION>
                  For the period ended March 31,                                 1999
                  ---------------------------------------------------   ------------------------
                                                                                      Other
                                                                        Pension   Postretirement
                                                                        Benefits      Benefits
                                                                        --------  --------------
                                                                           (In thousands)

                  <S>                                                    <C>            <C>
                  Components of net periodic benefit cost
                  Service cost.......................................    $ 223          $ 24
                  Interest cost......................................      818           101
                  Expected return on assets..........................     (725)           -
                                                                         -----          ----
                  Net periodic pension cost..........................    $ 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
         $13,481,000, $13,428,000 and $11,391,000, respectively, as of the end
         of the period, and $13,138,000, $12,509,000 and $10,442,000,
         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......   $15       $(13)
                  Effect on postretirement benefit obligation..................   $49       $(44)
</TABLE>


                                      F-20
<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, 1999 and 1998, Millbrook paid $400,000 for management
         fees and $800,000 for reasonable services provided by this entity
         pursuant to its aforementioned arrangement. For the period ended March
         31, 1999, Manischewitz paid $150,000 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, in fiscal 1999, Millbrook and Manischewitz
         reimbursed the aforementioned entity approximately $169,000 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-21
<PAGE>

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

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Concluded)


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,                       1999                       1998
         -----------------------------------     --------------------------------   -----------
                                                 Holdings  Enterprises   Holdings   Enterprises
                                                 --------  -----------   --------   -----------

         <S>                                    <C>         <C>          <C>         <C>
         Revenues
           Millbrook .......................     $464,785     $464,785   $470,201      $470,201
           Manischewitz.....................       48,819       48,819          -             -
                                                 --------     --------   --------      --------
             Total segment revenues.........      513,604      513,604    470,201       470,201
           Corporate items, principally
              the elimination of
              intercompany sales............       (3,041)      (3,041)         -             -
                                                 --------     --------   --------      --------
                                                 $510,563     $510,563   $470,201      $470,201
                                                 ========     ========   ========      ========

         Operating income
           Millbrook .......................     $  7,985     $  7,985   $ 12,914      $ 12,914
           Manischewitz.....................       12,520       12,520          -             -
                                                 --------     --------   --------      --------
             Total segment operating
               income.......................       20,505       20,505     12,914        12,914
           Corporate items and
               eliminations.................      (10,581)     (10,581)    (5,539)       (5,531)
                                                 --------     --------   --------      --------
                                                 $  9,924     $  9,924   $  7,375      $  7,383
                                                 ========     ========   ========      ========

         Identifiable assets
           Millbrook .......................     $125,670     $125,670   $108,768      $108,875
           Manischewitz.....................       47,324       47,324          -             -
                                                 --------     --------   --------      --------
             Total segment assets...........      172,994      172,994    108,768       108,875
           Corporate assets, principally
              intangibles not allocated
              to segments...................      123,949      105,795          4             -
                                                 --------     --------   --------      --------
                                                 $296,943     $278,789   $108,772      $108,875
                                                 ========     ========   ========      ========
</TABLE>


                                      F-22
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying statement of operations of Millbrook
Distribution Services Inc., (a then wholly-owned subsidiary of McKesson
Corporation), for the year ended March 31, 1997. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.

In our opinion, such statement of operations presents fairly, in all material
respects, the results of operations of Millbrook Distribution Services Inc. for
the year ended March 31, 1997 in conformity with generally accepted accounting
principles.



DELOITTE & TOUCHE LLP

April 30, 1998
New York, New York


                                      F-23

<PAGE>

                      MILLBROOK DISTRIBUTION SERVICES INC.

                             STATEMENT OF OPERATIONS
                            YEAR ENDED MARCH 31, 1997
                                 (In thousands)





Revenues                                                            $ 476,175


Costs and expenses
       Cost of sales                                                  364,762
       Selling                                                         45,280
       Distribution and warehousing                                    38,170
       General and administrative                                      20,588
                                                                    ---------

                   Total costs and expenses                           468,800
                                                                    ---------

Operating income                                                        7,375

Interest expense, net                                                   3,843
Non-operating income, other                                               (69)
                                                                    ---------

Income before provision for income taxes                                3,601

Provision for income taxes                                              1,660
                                                                    ---------

Net income                                                          $   1,941
                                                                    =========











               See notes to Statement of Operations.



                                      F-24

<PAGE>

                      MILLBROOK DISTRIBUTION SERVICES INC.

                        NOTES TO STATEMENT OF OPERATIONS


1.       Summary Of Significant Accounting Policies

                  Basis of Presentation - On March 31, 1997, R.A.B. Holdings,
         Inc. acquired Millbrook Distribution Services Inc. (the "Company") from
         McKesson Corporation (the "Former Parent"). The statement of operations
         of the Company are based on historical results and, accordingly, do not
         reflect purchase accounting adjustments or interest associated with
         debt incurred to finance the acquisition. Additionally, the Company's
         Former Parent managed cash and financing requirements centrally; as
         such the interest expense and related intercompany borrowings were
         based on the then existing capital structure. Additionally, the Former
         Parent provided certain corporate and general and administrative
         services, including, among other things, treasury, certain financial
         reporting, data processing and legal services. Accordingly, the
         operations of the Company include an allocation of expenses for such
         services. The results of operations of the Company may differ from
         results that may have been achieved had the Company operated as an
         independent entity.

                  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.

                  Fiscal Year - The Company's fiscal year ends 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, 1997, the replacement cost of inventories valued using the
         LIFO method exceeded the net carrying amount of such inventories by
         approximately $8.0 million.

                  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.....................   7-35  years
            Machinery and equipment........................   2-15  years
            Rolling stock..................................   3- 8  years


                                      F-25


<PAGE>



                      MILLBROOK DISTRIBUTION SERVICES INC.
                  NOTES TO STATEMENT OF OPERATIONS (CONTINUED)


1.       Summary Of Significant Accounting Policies (Continued)

                  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.
         Total depreciation expense was $ 3.0 million for the year ended March
         31, 1997.

                  Long-Lived Assets - The Company reviews its long-lived assets
         and certain 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 Company's ability to recover the
         unamortized balance of its 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.

                  Income Taxes - The results of operations of the Company were
         included in the consolidated Federal income tax return of its Former
         Parent. The provision for income taxes was determined as though the
         Company filed a separate Federal income tax return without regard to
         any tax attributes of other taxable years.

                  Business - The Company is one of the nation's largest
         independent value-added distributors of health and beauty care, general
         merchandise and specialty and natural food products.

2.       Leases

                  The Company leases certain facilities, machinery and vehicles
         under various non-cancelable operating lease agreements. The Company is
         required to pay property taxes, insurance and normal maintenance costs
         for certain of its facilities. Total rent expense for all operating
         leases was $5.3 million for the year ended March 31, 1997.

3.       Non-Operating Income, Other

                  During the year ended March 31, 1997, the Company sold a
         distribution center facility in Lincoln, Nebraska resulting in a gain
         of approximately $1.5 million.


                                      F-26

<PAGE>



                      MILLBROOK DISTRIBUTION SERVICES INC.
                  NOTES TO STATEMENT OF OPERATIONS (CONCLUDED)


4.       Income Taxes

                  The provision for income taxes for the year ended March 31,
         1997 is based on income recognized for financial statement purposes. A
         reconciliation of the statutory United States Federal income tax rate
         to the Company's effective income tax rate for the year ended March 31,
         1997 follows:


           Statutory rate...............................................   35.0%
           State income taxes, net of Federal benefit...................    4.6
           Other, principally meals and entertainment disallowance......    6.5
                                                                           ----
                                                                           46.1%
                                                                           ====

5.       Employee Benefit Plans

                  Retirement and Savings Plan - The Company's Former Parent had
         a retirement and savings plan ("401(k) Plan") covering substantially
         all of its employees. The 401(k) Plan provided for matching
         contributions by the Company which amounted to approximately $1.4
         million for the year ended March 31, 1997.

                  Other Benefit Plans - In 1984, a predecessor of the Company
         implemented a deferred compensation plan 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 benefits upon
         retirement. These plans do not allow new participants.

6.       Related Party Transactions

                  As described in Note 1, the Company's Former Parent provided
         certain corporate and general and administrative services to the
         Company which totaled approximately $2.5 million for the year ended
         March 31, 1997.



                                      F-27

<PAGE>

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

<TABLE>
<CAPTION>

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

March 31,                                                                            1999                            1998
----------------------------------------------------------------------    -------------------------       ------------------------
                                                                          Holdings      Enterprises       Holdings     Enterprises
                                                                          --------      -----------       --------     -----------
<S>                                                                       <C>             <C>              <C>          <C>
                               ASSETS
Current assets:
  Cash                                                                    $     10        $       -        $      -     $      -
  Restricted investments                                                     5,805                -               -            -
  Other current assets                                                       1,792            1,714               4            -
                                                                          --------        ---------        --------     --------
       Total current assets                                                  7,607            1,714               4            -
Noncurrent assets:
  Restricted investments                                                     8,880                -               -            -
  Intercompany notes receivable                                                  -           67,366               -            -
  Other assets                                                               1,807            4,197               -            -
                                                                          --------        ---------        --------     --------
       Total noncurrent assets                                              10,687           71,563               -            -
Investments in subsidiaries                                                 37,178           90,488          11,282       11,282
                                                                          --------        ---------        --------     --------
Total assets                                                              $ 55,472        $ 163,765        $ 11,286     $ 11,282
                                                                          ========        =========        ========     ========

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accrued interest                                                        $  2,613        $   5,277        $      -     $      -
  Other current liabilities                                                    228              691             109            -
                                                                          --------        ---------        --------     --------
       Total current liabilities                                             2,841            5,968             109            -
Noncurrent liabilities:
  Long-term debt                                                            48,000          120,000               -            -
  Other liabilities                                                              -              619               -            -
                                                                          --------        ---------        --------     --------
       Total noncurrent liabilities                                         48,000          120,619               -            -
Stockholders' equity:
  Preferred stock, no par value, 100,000 shares authorized,
      issued 20,000 shares of Series A                                       9,906                -           9,906            -
  Common stock, $.01 and $1.00 par value, 1,000,000 shares
      and 200 shares authorized, issued 104,100 shares and
      200 shares at March 31, 1999 and 100,000 shares and
      200 shares at March 31, 1998, respectively                                 1                -               1            -
  Additional paid-in capital                                                   332           39,482              98       10,100
  Retained earnings (deficit)                                               (5,748)          (2,444)          1,174        1,182
  Accumulated other comprehensive income                                       140              140               -            -
                                                                          --------        ---------        --------     --------
                                                                             4,631           37,178          11,179       11,282
Less common stock in treasury - 1,600 shares                                     -                -              (2)           -
                                                                          --------        ---------        --------     --------
          Total stockholders' equity                                         4,631           37,178          11,177       11,282
                                                                          --------        ---------        --------     --------
Total liabilities and stockholders' equity                                $ 55,472        $ 163,765        $ 11,286     $ 11,282
                                                                          ========        =========        ========     ========
</TABLE>


                 See notes to parent only financial statements.


                                      S-1


<PAGE>

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

<TABLE>
<CAPTION>

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

For the years ended March 31,                                                     1999                            1998
---------------------------------------------------------------------  ---------------------------     ---------------------------
                                                                         Holdings      Enterprises      Holdings       Enterprises
                                                                       -----------     -----------     ----------      -----------
<S>                                                                    <C>              <C>             <C>              <C>
Net (loss) income from subsidiary operations                           $ (3,626)        $   (449)       $ 1,182          $ 1,182

General and administrative expenses                                           -                -              8                -
                                                                       --------         ---------       -------          -------

Operating (loss) income                                                  (3,626)            (449)         1,174            1,182

Interest expense, net of Holdings' interest
     income of $931 and Enterprises'
     intercompany interest income of $7,266                              (5,071)          (4,887)             -                -
                                                                       --------         ---------       -------          -------

(Loss) income before benefit for income taxes                            (8,697)          (5,336)         1,174            1,182

Benefit for income taxes                                                 (1,775)          (1,710)             -                -
                                                                       --------         ---------       -------          -------

Net (loss) income                                                      $ (6,922)        $ (3,626)       $ 1,174          $ 1,182
                                                                       ========         =========       =======          =======

</TABLE>















                 See notes to parent only financial statements.



                                       S-2

<PAGE>

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

<TABLE>
<CAPTION>

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

For the years ended March 31,                                                       1999                            1998
---------------------------------------------------------------------    --------------------------        ------------------------
                                                                         Holdings       Enterprises        Holdings     Enterprises
                                                                         --------       -----------        --------     -----------
<S>                                                                     <C>               <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net (loss) income                                                  $ (6,922)         $ (3,626)        $ 1,174       $ 1,182
     Adjustments to reconcile net (loss) income to net cash
         used in operating activities:
           Equity in net loss (income) of subsidiaries                     3,626               449          (1,182)       (1,182)
           Amortization                                                      269               576               -             -
           Deferred income taxes                                          (1,775)           (1,710)              -             -
     Changes in assets and liabilities:
           Intercompany notes receivable                                       -              (966)              -             -
           Accrued interest                                                2,613             5,277               -             -
                                                                        ---------          -------         -------       -------
Net cash used in operating activities                                     (2,189)                -              (8)            -
                                                                        ---------         --------         -------       -------

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               -             -
     Payment of debt issuance costs                                       (1,730)           (4,759)              -             -
     Funding of interest escrow account                                  (16,991)                -               -             -
     Payment from interest escrow account                                  3,120                 -               -             -
     Funding of intercompany note receivable                                   -           (21,300)              -             -
     Proceeds from issuance and repurchase
          of common stock                                                    236                 -              (1)            -
     Equity investment from Holdings                                           -            29,382               -             -
     Other                                                                (1,054)              932            (725)            -
                                                                        ---------         --------         -------       -------
Net cash provided by (used in) financing activities                       31,581           124,255            (726)            -
                                                                        ---------         --------         -------       -------

Net increase (decrease) in cash                                               10                 -            (734)            -
Cash, beginning of year                                                        -                 -             734             -
                                                                        ---------         --------         -------       -------

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

Supplemental disclosures of cash flow information:
   Cash paid during the year for:
          Interest                                                      $  3,120          $  6,300         $     -       $    -
          Income taxes                                                  $      1          $      4         $     -       $    -

</TABLE>

                 See notes to parent only financial statements.


                                      S-3


<PAGE>

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

                    NOTES TO PARENT ONLY FINANCIAL STATEMENTS


Basis of Presentation

         The accompanying financial statements are presented on the basis of
recording investments in subsidiaries on the equity method of accounting.

         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

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 1999 AND 1998
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  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>               <C>
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                (255)             $2,441

</TABLE>










(1) For the year ended March 31, 1999, the amount principally relates to the
    acquisition of The B. Manischewitz Company, LLC.
(2) Amounts written off.


                                      S-5