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

                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

                  For the Quarterly Period Ended March 31, 1996


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

                  For the transition period from _____ to _____

                           Commission File No. 1-7272

                                KERR GROUP, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                     95-0898810
    (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                     Identification No.)

1840 Century Park East, Los Angeles, CA                       90067
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code      (310) 556-2200

Former name, former address and former fiscal year, if changed since last year.

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 [ ]


The number of shares of Registrant's Common Stock, $.50 par value, outstanding
as of April 30, 1996 was 3,933,095.
<PAGE>   2
Item 1 of Part I of the Form 10-Q of Kerr Group, Inc. for the quarterly period
ended March 31, 1996 (the "Form 10-Q") is hereby amended and restated in its
entirety as stated below:

ITEM 1.     FINANCIAL STATEMENTS


                                       2
<PAGE>   3
                                KERR GROUP, INC.

                           Consolidated Balance Sheets
                   As of March 31, 1996 and December 31, 1995
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                                            (Unaudited)  (As Restated)
                                                             March 31,    December 31,
Assets                                                         1996          1995
------                                                      -----------  -------------
<S>                                                          <C>           <C>      
Current assets
   Cash and cash equivalents                                 $   5,044     $   3,904
   Receivables-primarily trade accounts,
      less allowance for doubtful accounts
      of $278 at March 31, 1996 and $212
      at December 31, 1995                                       7,906         7,154
   Inventories
      Raw materials and work in process                          6,634         7,815
      Finished goods                                             9,418         9,933
                                                             ---------     ---------
           Total inventories                                    16,052        17,748

   Prepaid expenses and other current assets                     2,566         3,106
   Current net assets related to discontinued operations        16,668        12,847

           Total current assets                                 48,236        44,759
                                                             ---------     ---------
Property, plant and equipment, at cost                         103,115       105,725
Accumulated depreciation and amortization                      (59,817)      (58,907)
                                                             ---------     ---------
   Net property, plant and equipment                            43,298        46,818
                                                             ---------     ---------
Deferred income taxes                                           11,222         8,057
Goodwill and other intangibles, net of amortization
   of $2,339 at March 31, 1996 and $2,247 at
   December 31, 1995                                             6,476         6,983
Other assets                                                     7,515         8,026
Non-current net assets related to discontinued operations            0         4,854
                                                             ---------     ---------
                                                             $ 116,747     $ 119,497
                                                             =========     =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4
                                KERR GROUP, INC.

                           Consolidated Balance Sheets
                   As of March 31, 1996 and December 31, 1995
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                               (Unaudited)  (as Restated)
                                                March 31,    December 31,
Liabilities and Stockholders' Equity              1996           1995
------------------------------------           -----------  -------------
<S>                                             <C>           <C>      
Current liabilities
   Short-term debt                              $   6,040     $   6,500
   Senior debt due 1997 through 2003
      classified as current                        46,460        50,000
   Accounts payable                                10,124         9,739
   Accrued expenses                                13,444         8,858
                                                ---------     ---------
           Total current liabilities               76,068        75,097
                                                ---------     ---------
Pension liability                                  17,182        18,318
Other long-term liabilities                         4,515         2,175

Stockholders' equity
   Preferred Stock, 487 shares authorized
      and issued, at liquidation value of
      $20 per share                                 9,748         9,748
   Common Stock, $ .50 par value per share,
      20,000 shares authorized, 4,226 shares
      issued                                        2,113         2,113
   Additional paid-in capital                      27,239        27,239
   Retained earnings (accumulated deficit)         (4,582)        1,860
   Treasury Stock, 293 shares at cost              (6,913)       (6,913)
   Excess of additional pension liability
      over unrecognized prior service
      cost, net of tax benefits                    (8,623)      (10,140)
                                                ---------     ---------
               Total stockholders' equity          18,982        23,907
                                                ---------     ---------
                                                $ 116,747     $ 119,497
                                                =========     =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5
                                KERR GROUP, INC.

              Condensed Consolidated Statements of Earnings (Loss)
               for the Three Months Ended March 31, 1996 and 1995
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                                                        (Unaudited)
                                                                    Three Months Ended
                                                                          March 31,
                                                                          ---------
                                                                      1996         1995
                                                                    --------     --------
<S>                                                                 <C>          <C>     
Net sales                                                           $ 25,096     $ 27,362
Cost of sales                                                         22,729       21,029
                                                                    --------     --------
   Gross profit                                                        2,367        6,333

Selling, warehouse, general and
   administrative expenses                                             6,384        5,886
Loss on restructuring                                                  7,500            0
Interest expense                                                       1,359        1,129
Interest and other income                                               (100)         (46)
                                                                    --------     --------
   Loss from continuing operations before income taxes               (12,776)        (636)

Benefit for income taxes                                              (5,110)        (261)
                                                                    --------     --------
   Loss from continuing operations                                    (7,666)        (375)

Discontinued Operations:
   Gain on sale of discontinued operations                             1,564            0
   Loss from discontinued operations                                    (133)         (12)
                                                                    --------     --------
   Net earnings (loss) from discontinued operations                    1,431          (12)
                                                                    --------     --------
   Net loss                                                           (6,235)        (387)

Preferred stock dividends                                                207          207
                                                                    --------     --------
   Net loss applicable to common stockholders                       $ (6,442)    $   (594)
                                                                    ========     ========
Net earnings (loss) per common share, primary and fully diluted:
      From continuing operations                                    $  (2.00)    $  (0.16)
      From discontinued operations                                      0.36         0.00
                                                                    --------     --------
      Net loss                                                      $  (1.64)    $  (0.16)
                                                                    ========     ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6
                                KERR GROUP, INC.

                 Condensed Consolidated Statements of Cash Flow
               for the Three Months Ended March 31, 1996 and 1995
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                     (Unaudited)
                                                                  Three Months Ended
                                                                       March 31,
                                                                 --------------------
                                                                   1996        1995
                                                                 --------     -------
<S>                                                              <C>          <C>     
Cash flows provided (used) by operations
Continuing operations:
   Loss from continuing operations                               $ (7,666)    $  (375)
   Add (deduct) noncash items included in
   loss from continuing operations
     Loss on restructuring, net of tax                              4,500           0
     Depreciation and amortization                                  2,556       2,028
     Change in deferred income taxes                               (2,130)        308
     Reduction in total pension liability, net                         15         242
     Payments associated with restructuring                        (1,188)          0
     Other, net                                                       (92)       (181)
   Changes in other operating working capital
     Receivables                                                     (752)        (92)
     Inventories                                                      648         673
     Other current assets                                             150         (54)
     Accounts payable                                                 385      (4,146)
     Accrued expenses                                              (1,304)        135
                                                                 --------     -------
     Cash flow provided (used) by continuing operations            (4,878)     (1,462)
   Cash flow provided (used) by discontinued operations            (3,932)     (3,430)
     Total cash flow provided (used) by operations                 (8,810)     (4,892)

Cash flows provided (used) by investing activities
Continuing operations:
   Capital expenditures                                              (231)       (995)
   Other, net                                                         260         402
Discontinued operations:
   Capital expenditures                                              (234)       (116)
   Proceeds from sale of assets of Consumer Products Business      14,417           0
   Other, net                                                         (55)       (114)
        Cash flow provided (used) by investing activities          14,157        (823)

Cash flows provided (used) by financing activities
   Net borrowings (repayments) under lines of credit                 (460)      3,800
   Repayment of Senior Notes                                       (3,540)          0
   Dividends paid                                                    (207)       (207)
   Other, net                                                           0          32
                                                                 --------     -------
        Cash flow provided (used) by financing activities          (4,207)      3,625

Cash and cash equivalents
   Increase (decrease) during the period                            1,140      (2,090)
   Balance at beginning of the period                               3,904       2,261
                                                                 --------     -------
     Balance at end of the period                                $  5,044     $   171
                                                                 ========     =======
</TABLE>

See accompanying notes to condensed consolidated financial statements


                                       6
<PAGE>   7
                                KERR GROUP, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


1) General

   The condensed consolidated financial statements include the accounts of Kerr
   Group, Inc. and its wholly owned subsidiary (collectively referred to as the
   Company). In the opinion of management, the accompanying condensed
   consolidated financial statements contain all adjustments (consisting of only
   normal recurring accruals and certain non-recurring accruals for
   restructuring charges as described below) necessary to present fairly the
   financial position of the Company as of March 31, 1996, the results of
   operations for the three months ended March 31, 1996 and 1995, and changes in
   cash flows for the three months ended March 31, 1996 and 1995.

   The results of operations for the first three months of 1996 are not
   necessarily indicative of the results to be expected for the full year.

   Fully diluted earnings per common share reflect when dilutive, 1) the
   incremental common shares issuable upon the assumed exercise of outstanding
   stock options, and 2) the assumed conversion of the Preferred Stock and the
   elimination of the related Preferred Stock dividends. The calculation of
   fully diluted net earnings (loss) per common share for the three months ended
   March 31, 1996 and 1995 was not dilutive.


2) Discontinued Operations

   On March 15, 1996, the Company sold the manufacturing assets of the Consumer
   Products Business for a purchase price of $14,417,000. These proceeds were
   utilized for working capital, to reduce debt, including $3,500,000 of debt
   secured by liens on certain machinery and equipment of the Company, and to
   fund costs of the restructuring (see Note 3). The Company also expects to
   receive approximately $16,500,000, primarily during the remainder of 1996,
   from the sale by the Company of the inventory of the Consumer Products
   Business and from the collection of the accounts receivable of the Consumer
   Products Business.

   In connection with such sale, the Company recorded $5,800,000 of reserves
   consisting of i) retiree health care and pension expenses of $3,800,000, ii)
   severance and related costs of $1,000,000, iii) professional fees of
   $500,000, iv) asset retirements of $300,000, and v) other costs of $200,000.
   After deductions for such reserves, the Company incurred in the first quarter
   of 1996 a one-time pre-tax gain of $2,607,000 ($1,564,000 after-tax or $0.40
   per common share) in connection with the sale of the manufacturing assets of
   the Consumer Products Business.

   The assets and liabilities of the discontinued Consumer Products Business
   have been reclassified on the Consolidated Balance Sheets from the previously
   reported classification to separately identify them as current net assets and
   non-current net assets related to discontinued operations. These net assets
   consist of net working capital, net property, plant and equipment, other
   assets and intangible assets, less related liabilities.

   The results of the Consumer Products Business have been reported separately
   as a component of discontinued operations in the Condensed Consolidated
   Statements of Earnings (Loss). The presentation of this business as
   discontinued had no effect on net loss, net loss applicable to common
   stockholders or net loss per common share from the amounts previously
   reported.


                                        7
<PAGE>   8
3) Restructuring

   During the first quarter of 1996, the Company recorded an unusual loss of
   $7,500,000 ($4,500,000 after-tax or $1.14 per common share) for the costs
   associated with the restructuring of the Company, which include moving the
   corporate headquarters from Los Angeles, California to Lancaster,
   Pennsylvania and relocating the wide-mouth jar operations from Santa Fe
   Springs, California to Bowling Green, Kentucky. The pre-tax loss consists
   primarily of reserves of $3,000,000 for severance and related costs,
   $2,200,000 for losses on the sublease of two facilities, and $1,900,000 for
   asset retirements.

   The restructuring is expected to result in annualized pre-tax cost savings of
   approximately $6,500,000. These cost savings are expected to be substantially
   realized in 1997.

   In addition to the presently recorded restructuring loss, the Company will
   also incur non-recurring pre-tax losses during 1996 and early 1997 associated
   with the restructuring of approximately $2,400,000 ($1,440,000 after-tax or
   $0.37 per common share) primarily related to equipment and personnel
   relocation costs, and inefficiencies related to the relocation of operations.
   Accounting rules require these costs to be expensed as incurred.

4) Receivables

   Receivables as of March 31, 1996 and December 31, 1995, as shown on the
   accompanying Consolidated Balance Sheets, have been reduced by net proceeds
   of $5,904,000 and $7,357,000, respectively, from advances pursuant to the
   sale of receivables under the Company's Accounts Receivable Facility. In
   addition, receivables as of March 31, 1996 and December 31, 1995, related to
   discontinued operations, included in Current Net Assets Related to
   Discontinued Operations on the accompanying Consolidated Balance Sheets, have
   been reduced by net proceeds of $1,767,000 and $343,000, respectively, from
   advances pursuant to the sale of receivables under the Company's Accounts
   Receivable Facility.

5) Financing

   The Company has obtained waivers of certain financial covenants through May
   15, 1996 from the lenders under the Senior Notes, the lender under a
   $6,040,000 unsecured note and the purchaser under the Receivable Agreement
   (collectively referred to as "Lenders") and an extension of the maturity date
   of the unsecured note to May 15, 1996. The Company is in discussions with the
   Lenders regarding extension of these waivers and the extension of the due
   date of the unsecured note. All of the Company's outstanding indebtedness is
   unsecured. Although the Company has obtained waivers or amendments from the
   Lenders on previous occasions, there can be no assurance that the Lenders
   will agree to further waivers.

   If additional waivers of financial covenants or the extension of the maturity
   date of the unsecured note are not obtained, the Lenders would be entitled to
   exercise certain remedies, including the acceleration of the due date for
   payment of the Senior Notes and the unsecured note, and the termination of
   the Receivable Agreement.

   Based upon the past experience of the Company in obtaining waivers or
   amendments from its Lenders and because the Company expects to use a portion
   of the proceeds from the sale of inventory and collection of accounts
   receivables of the Consumer Products Business to further reduce debt, the
   Company believes that the Lenders will extend the due date of the unsecured
   note, will not accelerate the due date for payment of the Senior Notes and
   will not terminate the Receivable Agreement. The accompanying consolidated
   financial statements have been prepared on the basis of such belief of the
   Company.


                                       8
<PAGE>   9
                                KERR GROUP, INC.
               Computation of Net Earnings (Loss) Per Common Share
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                                           (Unaudited)
                                                       Three Months Ended
                                                             March 31,
                                                       -------------------
                                                         1996        1995
                                                       -------     -------
<S>                                                    <C>         <C>     
Primary Net Earnings (Loss) Per Common Share
   Net loss                                            $(6,235)    $  (387)

   Less Preferred Stock dividends                         (207)       (207)
                                                       -------     -------
   Net loss applicable to primary earnings per
      common share                                     $(6,442)    $  (594)
                                                       =======     =======
   Weighted average number of common
      shares outstanding                                 3,933       3,678
                                                       =======     =======
   Primary net loss per common share                   $ (1.64)    $  (.16)
                                                       =======     =======
Fully Diluted Net Earnings (Loss) Per Common Share
   Net loss applicable to primary earnings
      per common share                                 $(6,442)    $  (594)

   Add Preferred Stock dividends                           207         207
                                                       -------     -------
   Net loss applicable to fully
      diluted earnings per common share                $(6,235)    $  (387)
                                                       =======     =======
   Weighted average number of common
      shares outstanding                                 3,933       3,678

   Common shares issuable from assumed
      conversion of Preferred Stock                        709         709

   Incremental common shares issuable upon
      assumed exercise of outstanding stock options         19          17
                                                       -------     -------
   Adjusted weighted average number of common
      shares outstanding                                 4,661       4,404
                                                       =======     =======
   Fully diluted net loss per common share:
      As computed                                      $ (1.34)    $  (.09)
                                                       =======     =======
      As reported (a)                                  $ (1.64)    $  (.16)
                                                       =======     =======
</TABLE>

(a)The calculation of fully diluted net loss per common share for the three
   months ended March 31, 1996 and 1995 was not dilutive.


                                       9
<PAGE>   10
Item 2 of Part I of the Form 10-Q is hereby amended and restated in its entirety
as stated below:

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


                                       10
<PAGE>   11
                                KERR GROUP, INC.

                Management's Discussion and Analysis of Financial
                   Condition and Results of Operations for the
                   Three Months Ended March 31, 1996 and 1995


Results of Operations
Continuing Operations

Net sales for the three months ended March 31, 1996 were $25,096,000 as compared
to $27,362,000 for the three months ended March 31, 1995, a decrease of
$2,266,000 or 8%. The decrease in net sales for the three months ended March 31,
1996 over the comparable period in 1995 was due primarily to lower sales of
prescription packaging products.

Cost of sales for the three months ended March 31, 1996 were $22,729,000 as
compared to $21,029,000 for the three months ended March 31, 1995, an increase
of $1,700,000 or 8%. The increase in cost of sales for the three months ended
March 31, 1996 over the comparable period in 1995 was due primarily to higher
manufacturing costs and inefficiencies due to reduced production.

Gross profit as a percent of net sales for the three months ended March 31, 1996
decreased to 9% as compared to 23% for the three months ended March 31, 1995.
The decrease in gross profit as a percent of net sales for the three months
ended March 31, 1996 over the comparable period in 1995 was primarily due to
1995 cost increases which have not been offset by price increases, increased
reserves for customer rebates and inventory obsolescence, and inefficiencies due
to reduced production. Management will endeavor to implement price increases
during the remainder of 1996 to offset a portion of the cost increases
experienced during 1995. In addition, management does not expect to further
increase the level of reserves for customer rebates and inventory obsolescence
during 1996.

The increase in reserves for customer rebates is due to the completion of a
detailed analysis by the Company in the first quarter of 1996 of the historical
amount and timing of customer deductions, and credit memos and other payments
issued by the Company, by customer category, which indicated an increase in the
required accrual. The increase in reserves for inventory obsolescence is the
result of including certain additional types of closures in the calculation of
the reserve beginning in 1996, because the Company felt that it represented a
more accurate measure of such contingency.

Selling, warehouse, general and administrative expenses increased $498,000 or 8%
during the three months ended March 31, 1996, as compared to the same period in
1995, due primarily to the start up of operations at the Company's new Bowling
Green, Kentucky facility and higher warehousing costs.

Net interest expense increased $176,000 during the three months ended March 31,
1996, as compared to the same period in 1995, primarily as a result of higher
levels of short-term debt.

Loss from continuing operations before income taxes and unusual items increased
$4,640,000 during the three months ended March 31, 1996 as compared to the same
period in 1995 due primarily to 1995 cost increases which have not been offset
by price increases, increased reserves for customer rebates and inventory
obsolescence, inefficiencies due to reduced production and lower sales.

During the first quarter of 1996, the Company recorded an unusual loss of
$7,500,000 ($4,500,000 after-tax or $1.14 per common share) for the costs
associated with the restructuring of the Company, which include moving the
corporate headquarters from Los Angeles, California to Lancaster, Pennsylvania
and relocating the wide-mouth jar operations from Santa Fe Springs, California
to Bowling Green, Kentucky. The pre-tax loss consists primarily of reserves of
$3,000,000 for severance and related costs, $2,200,000 for losses on the
sublease of two facilities, and $1,900,000 for asset retirements.


                                       11
<PAGE>   12
The restructuring is expected to result in annualized pre-tax cost savings of
approximately $6,500,000. These cost savings are expected to be substantially
realized in 1997.

In addition to the presently recorded restructuring loss, the Company will also
incur non-recurring pre-tax losses during 1996 and early 1997 associated with
the restructuring of approximately $2,400,000 ($1,440,000 after-tax or $0.37 per
common share) primarily related to equipment and personnel relocation costs, and
inefficiencies related to the relocation of operations. Accounting rules require
these costs to be expensed as incurred.

The benefit for income taxes increased $4,849,000 during the three months ended
March 31, 1996 as compared to the same period in 1995 due to higher pretax
losses.

Discontinued Operations

The Company reported a net gain from discontinued operations of $1,431,000 or
$0.36 per share for the first quarter of 1996 as compared to a net loss from
discontinued operations of $12,000 for the first quarter of 1995. The net gain
in 1996 includes a pre-tax gain of $2,607,000 ($1,564,000 after-tax or $0.40 per
common share) in connection with the sale of the manufacturing assets of the
Consumer Products Business. This pre-tax gain has been reduced by $5,800,000 of
reserves, primarily consisting of $3,800,000 for retiree health care and pension
expense, $1,000,000 for severance and related costs, $500,000 for professional
fees and $300,000 for asset retirements.

Financial Condition

During the first quarter of 1996, the principal source of cash flow was
$14,417,000 received from the sale of the manufacturing assets of the Consumer
Products Business. The principal use of cash flow was to fund pretax losses, net
debt retirements of $4,000,000 and increased operating working capital
requirements of $3,821,000 related to the seasonal increase in inventories and
receivables of the Consumer Products Business, which is presented as
discontinued operations in the accompanying consolidated financial statements.

During the first quarter of 1995, the principal use of cash flow was to fund
increased operating working capital requirements for continuing operations of
$3,484,000, primarily as a result of the lower levels of payables, and for
discontinued operations of $3,488,000, primarily due to the seasonal increase in
inventories and receivables. Cash flow was provided from financing activities
consisting of an increase in short-term debt of $3,800,000. Cash flow was also
provided through the reduction of the Company's cash balances of $2,090,000.

Since the third quarter of 1990, the Company has not declared any dividends on
its Common Stock. The Company's Senior Note Agreement limits the payment of
dividends on Common Stock. Under the most restrictive covenant, the payment of
Common Stock dividends is not permitted at March 31, 1996.

The ratio of current assets to current liabilities at both March 31, 1996 and
December 31, 1995 was 0.6. The ratio of current assets to current liabilities is
less than 1.0 due to the classification of the Company's outstanding Senior
Notes as a current liability because the Company was in default of certain
financial covenants for which the Company had received waivers only through May
15, 1996. The ratio of total debt to total capitalization increased to 73% at
March 31, 1996 from 70% at December 31, 1995 due to lower stockholders' equity.

The Company has obtained waivers of certain financial covenants through May 15,
1996 from the lenders under the Senior Notes, the lender under a $6,040,000
unsecured note and the purchaser under the Receivable Agreement (collectively
referred to as "Lenders") and an extension of the maturity date of the unsecured
note to May 15, 1996. The Company is in discussions with the Lenders regarding
extension of


                                       12
<PAGE>   13
these waivers and the extension of the due date of the unsecured note. All of
the Company's outstanding indebtedness is unsecured. Although the Company has
obtained waivers or amendments from the Lenders on previous occasions, there can
be no assurance that the Lenders will agree to further waivers.

If additional waivers of financial covenants or the extension of the maturity
date of the unsecured note are not obtained, the Lenders would be entitled to
exercise certain remedies, including the acceleration of the due date for
payment of the Senior Notes and the unsecured note, and the termination of the
Receivable Agreement.

Based upon the past experience of the Company in obtaining waivers or amendments
from its Lenders and because the Company expects to use a portion of the
proceeds from the sale of inventory and collection of accounts receivables of
the Consumer Products Business to further reduce debt, the Company believes that
the Lenders will extend the due date of the unsecured note, will not accelerate
the due date for payment of the Senior Notes and will not terminate the
Receivable Agreement. The accompanying consolidated financial statements have
been prepared on the basis of such belief of the Company.

At March 31, 1996 the Company had unused sources of liquidity consisting of cash
and cash equivalents of $5,044,000, additional advances available under the
Receivable Agreement of approximately $1,300,000, a tax net operating loss
carryforward of $17,209,000, a minimum tax credit carryforward of $1,083,000 and
other tax credit carryforwards of $75,000. The Company believes that its
financial resources, including proceeds from the sale of certain assets of the
Consumer Products Business and other internally generated funds, are adequate to
meet its foreseeable needs, subject to the satisfactory resolution of current
discussions with the Lenders.

Disclosure Regarding Forward Looking Statements

Portions of this Quarterly Report on Form 10-Q include forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Although the Company believes that the expectations reflected in such forward
looking statements are based upon reasonable assumptions, it can give no
assurance that its expectations will be achieved.


                                       13
<PAGE>   14
                   ------------------------------------------

      Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.



                                KERR GROUP, INC.


Date:  January 10, 1997


                            By:   /s/ Geoffrey A. Whynot
                                  --------------------------------
                                  Name:  Geoffrey A. Whynot
                                  Title: Vice President, Chief Financial Officer


                                       14