<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

                For the quarterly period ended December 30, 2000
OR

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

                 For the transition period from ______ to ______

                         Commission file number: 1-06725

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

          DELAWARE
(State or other jurisdiction of                          51-0305205
incorporation or organization)               (I.R.S.Employer Identification No.)


                            C/O U.S. INDUSTRIES, INC.
                              101 WOOD AVENUE SOUTH
                                ISELIN, NJ 08830
                    (Address of principal executive offices)
                                 (732) 767-0700
              (Registrant's telephone number, including area code)

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
   ---    ---

<PAGE>

                                 LCA GROUP INC.

                                      INDEX

                                                                            Page
                                                                             NO.


PART I.    FINANCIAL INFORMATION

           Item 1.Financial Statements

                  Combined Condensed Statements of Operations
                  for the Three Months Ended December 31, 2000 and 1999...   1

                  Combined Condensed Balance Sheets, December 31, 2000
                  and September 30, 2000..................................   2

                  Combined Condensed Statements of Cash Flows
                  for the Three Months Ended December 31, 2000 and 1999...   3

                  Notes to Combined Condensed Financial Statements........   4

           Item 2.Management's Discussion and Analysis of Financial
                  Condition and Results of Operations ....................   8

           Item 3.Quantitative and Qualitative Disclosures About
                  Market Risk. ...........................................  11


PART II.        OTHER INFORMATION

           Item 6.Exhibits ...............................................  13


SIGNATURES ...............................................................  14

<PAGE>

PART 1.    FINANCIAL INFORMATION.

ITEM 1.    FINANCIAL STATEMENTS.


                                 LCA GROUP INC.
                  COMBINED CONDENSED STATEMENTS OF OPERATIONS
                       (IN MILLIONS EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED
                                                                  DECEMBER 31,
                                                               ----------------
                                                               2000        1999
                                                               ----        ----

<S>                                                         <C>          <C>
Net Sales                                                   $   215.6    $  225.2
Operating costs and expenses:
Cost of products sold                                           146.0       151.2
Selling, general and administrative expenses                     61.6        62.3
Management fee and divisional overhead                            1.9         2.1
                                                            ---------    --------
Operating income                                                  6.1         9.6
Interest expense to Affiliates                                   (3.3)       (3.3)
Interest expense                                                 (0.2)       (0.2)
Interest income                                                   0.2         0.2
Other expense, net                                               (0.2)     --
                                                            ---------    --------
Income before income taxes                                        2.6         6.3
Provision for income taxes                                       (1.0)       (2.5)
                                                            ---------    --------

Net income                                                  $     1.6    $    3.8
                                                            =========    ========



Pro-forma basic and diluted earnings per share:             $     0.20
                                                            ==========
</TABLE>


       SEE NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS.

                                       1
<PAGE>

                                 LCA GROUP INC.
                       COMBINED CONDENSED BALANCE SHEETS
                                  (IN MILLIONS)

<TABLE>
<CAPTION>

                                                         DECEMBER 31,    SEPTEMBER 30,
                                                             2000            2000
                                                             ----            ----
                                                         (UNAUDITED)
                                     ASSETS
<S>                                                        <C>            <C>
Current assets:
Cash and cash equivalents                                  $   14.7       $    7.8
Trade receivables, net                                        161.1          171.7
Inventories                                                   167.6          165.8
Deferred income taxes                                           9.2            9.3
Other current assets                                            9.1           10.7
                                                           --------       --------

Total current assets                                          361.7          365.3

Property, plant and equipment, net                            163.5          158.0
Pension assets                                                  7.7            6.7
Other assets                                                    1.7            2.1
Goodwill, net                                                  69.7           70.1
                                                           --------       --------
                                                           $  604.3       $  602.2
                                                           ========       ========


                        LIABILITIES AND INVESTED CAPITAL

Current liabilities:
Notes payable                                               $    2.3      $    3.9
Current maturities of long-term debt                             0.2        --
Trade accounts payable                                          48.5          59.5
Accrued expenses and other liabilities                          55.9          57.1
Income taxes payable                                             4.3           4.8
                                                           --------       --------

Total current liabilities                                      111.2         125.3

Long-term debt                                                   0.4        --
Deferred income taxes                                            5.9           5.3
Other liabilities                                               46.3          43.5
Notes payable to Affiliates                                    201.6         201.6
Interest payable to Affiliates                                  27.0          23.7
                                                           --------       --------

Total liabilities                                              392.4         399.4
Commitments and contingencies
Invested capital                                               211.9         202.8
                                                           --------       --------
                                                            $  604.3      $  602.2
                                                            ========      ========
</TABLE>



        SEE NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS.

                                       2
<PAGE>

                                 LCA GROUP INC.
                   COMBINED CONDENSED STATEMENTS OF CASH FLOWS
                             (IN MILLIONS-UNAUDITED)

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED
                                                                    DECEMBER 31,
                                                                   -------------
                                                                   2000     1999
                                                                   ----     ----
<S>                                                              <C>      <C>
OPERATING ACTIVITIES:
Net income                                                       $   1.6  $   3.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                                        6.8      6.7
Provision for doubtful accounts                                      0.3      0.1
Provision for deferred income taxes                                  0.5      0.1
Loss on sale of property, plant and equipment                        0.2   --
Changes in operating assets and liabilities,
excluding the effects of acquisitions and dispositions               0.1     (5.8)
                                                                 -------  -------
NET CASH PROVIDED BY OPERATING ACTIVITIES                            9.5      4.9

INVESTING ACTIVITIES:
Acquisition of companies, net of cash acquired                    --         (1.9)
Purchases of property, plant and equipment                          (8.5)    (6.8)
Proceeds from sales of property, plant and equipment                 0.2      0.2
                                                                 -------  -------
NET CASH USED IN INVESTING ACTIVITIES                               (8.3)    (8.5)

FINANCING ACTIVITIES:
Repayment of long-term debt                                         (0.1)  --
Proceeds from affiliate debt                                      --          6.6
Repayment of notes payable                                          (2.0)    (1.7)
Proceeds from notes payable                                          0.3      1.8
Increase in interest payable to Affiliates                           3.3      3.3
Net transfers with Affiliates                                        1.9     (1.7)
                                                                 -------  -------

NET CASH PROVIDED BY FINANCING ACTIVITIES                            3.4      8.3

Effect of exchange rate changes on cash and cash equivalents         2.3     (2.1)
                                                                 -------  -------

 INCREASE IN CASH AND CASH EQUIVALENTS                               6.9      2.6

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     7.8      9.1
                                                                 -------  -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $  14.7  $  11.7
                                                                 =======  =======
</TABLE>


         SEE NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS.

                                       3
<PAGE>

                                 LCA GROUP INC.
                NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

NOTE 1-BASIS OF PRESENTATION AND DESCRIPTION OF COMPANY

      The accompanying combined condensed financial statements include the
combined operations of LCA Group Inc. (the "Company"), which is comprised of
subsidiaries currently owned, directly or indirectly by U.S. Industries, Inc.
(the "Parent" or "USI"). The Company, through these USI subsidiaries,
manufactures and distributes indoor and outdoor lighting fixtures, hand
tools, saws and cutting and industrial tools for markets in North America and
Europe. These subsidiaries are grouped into two segments: Lighting (Lighting
Corporation of America, Inc., Columbia Lighting Inc., Dual-Lite Inc., Kim
Lighting Inc., Architectural Area Lighting Inc., Spaulding Lighting Inc.,
Progress Lighting Inc., Prescolite Inc. and SiTeco Holding GmbH) and
Industrial Tools (Spear & Jackson plc and Bowers Group plc).

      In contemplation of the spin-off and distribution to its stockholders by
USI of the ownership in the Company, all the issued and outstanding common stock
or net operating assets of certain companies and other assets and interests will
be transferred to the Company (the "Spin-off Transactions"). At December 31,
2000, the Company had no separate legal status or existence as a combined group.
These financial statements are presented on a going concern basis as if the
Company had existed as a corporation separate from USI during the periods
presented and include the historical net assets and results of operations
directly related to the Company's operations. The Company's Registration
Statement on Form 10 was declared effective by the Securities and Exchange
Commission on January 3, 2001.  On December 21, 2000, USI announced that
its Board of Directors had declared a dividend of all of the outstanding
shares of the Company to USI shareholders. If paid, the dividend will be in
the form of one share of the Company for each ten shares of USI held by USI
shareholders of record as of the record date for the spin-off.  The dividend
is expected to be tax-free to USI and its shareholders. Payment of the
dividend is conditioned upon completion of new financing arrangements for the
Company and USI. On January 25, 2001, USI announced that the spin-off of
the Company would be delayed. Although the spin-off will not be completed
within the time period contemplated by the previously announced record date,
USI is continuing to pursue the spin-off, completion of which is subject to
satisfaction of the spin-off conditions, further review by the USI Board
of Directors and the setting of a new record date.

      USI and certain subsidiaries of USI (referred to herein as "Affiliates")
have provided certain corporate general and administrative services to the
Company including legal, finance, tax, risk management and employee benefits. A
portion of the related costs has been allocated to the Company based on the
percentage of the Company's sales to the consolidated sales of USI as management
fees. The Company's management believes such amounts are reasonable.
Additionally, the direct costs attributable to division management are included
in management fees and divisional overhead in the accompanying combined
financial statements.

      The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information,
Article 10 of Regulation S-X and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The interim financial data for the three months ended December 31, 2000 and 1999
are unaudited and, in the opinion of management, reflect all necessary
adjustments for a fair presentation of the financial position and results of
operations for the interim periods on a consistent basis. Such adjustments were
of a normal and recurring nature. The results of operations for the three month
period ended December 31, 2000 are not necessarily indicative of those for the
full fiscal year ending September 30, 2001. For further information, refer to
the Combined Financial Statements and footnotes thereto included in the
Company's Form 10 for the year ended September 30, 2000.

      The Company's fiscal year ends on the Saturday nearest to September 30.
All three month data contained in this report reflect results of operations for
the 13-week periods ended on the Saturday closest to December 31, 2000 and 1999,
respectively, but are presented as of such date for convenience.

NOTE 2-INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>

                                                     (IN MILLIONS)
                                               DECEMBER 31,   SEPTEMBER 30,
                                                  2000           2000
                                                  ----           ----
                                               (UNAUDITED)

<S>                                              <C>            <C>
Finished products                                $  80.2        $  78.6
Work-in process                                     26.6           26.7
Raw materials                                       60.8           60.5
                                                 -------        -------
                                                 $ 167.6        $ 165.8
                                                 =======        =======
</TABLE>

                                       4
<PAGE>
                                 LCA GROUP INC.
        NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000

NOTE 3-NOTES PAYABLE

      Notes Payable to Affiliates consists of the following:

<TABLE>
<CAPTION>
                                                            (IN MILLIONS)
                                                    DECEMBER 31,   SEPTEMBER 30,
                                                        2000            2000
                                                        ----            ----
                                                     (UNAUDITED)
<S>                                                    <C>            <C>
      6.5% Notes Payable to Affiliates                 $  195.0       $  195.0
      6.25% Notes Payable to Affiliates                     6.6            6.6
                                                       --------       --------
      Notes Payable to Affiliates                      $  201.6       $  201.6
                                                       ========       ========
</TABLE>

The 6.5% and 6.25% notes are unsecured and mature in fiscal 2005.

      The European lighting business maintains working capital lines of credit
guaranteed by USI of $13.1 million and $23.5 million at December 31, 2000 and
September 30, 2000, respectively, denominated in German Marks and Austrian
schillings. Amounts outstanding under these lines of credit at December 31, 2000
and September 30, 2000 were $1.0 million and $2.7 million, respectively, with
interest rates ranging from 3.0% to 5.5%.

      Spear & Jackson maintains short-term credit facilities of $5.5 million
and $5.2 million at December 31, 2000 and September 30, 2000, respectively,
primarily denominated in French francs and Australian dollars of which $0.4
million was guaranteed by USI at December 31, 2000 and September 30, 2000.
Amounts outstanding under these lines of credit at December 31, 2000 and
September 30, 2000 were $1.1 million and $1.2 million, respectively, with
interest rates ranging from 5.5% to 12.6%. In addition, Spear & Jackson
maintains a line of credit guaranteed by USI of $4.5 million and $4.4 million
at December 31, 2000 and September 30, 2000, respectively, denominated in
British pounds. Amounts outstanding under this line of credit at December 31,
2000 were $0.2 million with an interest rate of 7.5%. No amounts were
outstanding on this line of credit at September 30, 2000.

NOTE 4-COMMITMENTS AND CONTINGENCIES

      The Company is subject to a wide range of environmental protection laws.
The Company has remedial and investigatory activities underway at approximately
7 sites, of which the Company has been named as a Potentially Responsible Party
("PRP") at 4 "superfund" sites pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 or comparable statutes.

      It is often difficult to estimate the future impact of environmental
matters, including potential liabilities. The Company accrues for losses
associated with environmental remediation obligations when such losses are
probable and reasonably estimable. This practice is followed whether the claims
are asserted or unasserted. Reserves for estimated losses from environmental
remediation are, depending on the site, based primarily upon internal or third
party environmental studies, and estimates as to the number, participation level
and financial viability of any other PRP's, the extent of contamination and
the nature of required remedial actions. Such accruals are adjusted as further
information develops or circumstances change. Costs of future expenditures for
environmental remediation obligations are not discounted to their present fair
value unless the aggregate amount of the obligation and the amount and timing of
the cash payments are fixed or readily determinable. The Company has not
discounted any obligations as these criteria have not been met. Recoveries of
environmental remediation costs from other parties are recognized as assets when
their receipt is deemed probable. Management expects that the amount accrued
will be paid out over the periods of remediation for the applicable sites which
range up to 30 years and that all such reserves are adequate based on all
current data. Each of the sites in question are at various stages of
investigation or remediation; however, no information currently available
reasonably suggests that projected expenditures associated with remedial action
or compliance with environmental laws, for any single site or for all sites in
the aggregate, will have a material adverse affect on the Company's financial
condition, results of operations or cash flows.

                                       5
<PAGE>
                                 LCA GROUP INC.
         NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000

NOTE 4-COMMITMENTS AND CONTINGENCIES (CONTINUED)

      At December 31, 2000, the Company had accrued $4.4 million for various
environmental related liabilities of which the Company is aware. The Company
believes that the range of liability for such matters is between
approximately $1.1 million and $5.2 million.

      Also, certain of the Company's subsidiaries are defendants or plaintiffs
in lawsuits that have arisen in the normal course of business. While certain of
these matters involve substantial amounts, it is management's opinion, based on
the advice of counsel, that the ultimate resolution of such litigation and
environmental matters will not have a material adverse effect on the Company's
financial condition, results of operations or cash flows.

NOTE 5-SEGMENT DATA

      The Company's operations are classified into two business segments:
Lighting and Industrial Tools. These operations are conducted primarily in the
United States, and to a lesser extent, in other regions of the world. The
following table presents certain information about the Company by segment:

<TABLE>
<CAPTION>
                                                (IN MILLIONS - UNAUDITED)
                                         FOR THE THREE MONTHS ENDED DECEMBER 31,
                                         --------------------------------------
                                          2000     1999      2000      1999
                                         -------  -------  ---------  --------
                                            NET SALES    OPERATING INCOME (LOSS)
                                         --------------- -----------------------
<S>                                      <C>      <C>         <C>       <C>
Business Segments:
Lighting                                 $190.0   $196.7      $ 9.3     $10.5
Industrial Tools                           25.6     28.5       (1.3)      1.2
Management fees and divisional overhead      --       --       (1.9)     (2.1)
                                         -------  ------      -----     -----

Totals                                   $215.6   $225.2        6.1       9.6
                                         =======  ======

Interest expense to Affiliates                                 (3.3)     (3.3)
Interest expense                                               (0.2)     (0.2)
Interest income                                                 0.2       0.2
Other expense, net                                             (0.2)       --
                                                              -----     -----
Income before income taxes                                      2.6       6.3
Provision for income taxes                                     (1.0)     (2.5)
                                                              -----     -----
Net income                                                    $ 1.6     $ 3.8
                                                              =====     =====
</TABLE>

NOTE 6-COMPREHENSIVE INCOME (LOSS)

      The components of the Company's comprehensive income (loss) were as
follows:

<TABLE>
<CAPTION>
                                               (IN MILLIONS - UNAUDITED)
                                        FOR THE THREE MONTHS ENDED DECEMBER 31,
                                                   2000         1999
                                                   ----         ----

<S>                                                 <C>         <C>
Net income                                          $ 1.6       $ 3.8
Foreign currency translation adjustment               5.6        (7.5)
                                                    -----      ------
Comprehensive income (loss)                         $ 7.2      $ (3.7)
                                                    =====      ======
</TABLE>

                                       6
<PAGE>

                                 LCA GROUP INC.
          NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000

NOTE 7-EARNINGS PER SHARE

      Historical earnings per share are not presented because the Company was
comprised of direct or indirect subsidiaries of the Parent.

      The pro-forma earnings per share were calculated assuming that 7,709,000
shares of the Company's common stock will be issued upon the spin-off. One share
of the Company's common stock will be issued for every ten USI shares. The
pro-forma earnings per share do not include the effect of any options that might
be issued by the Company subsequent to the spin-off.

NOTE 8- NEW ACCOUNTING STANDARDS

      Effective October 1, 2000, the Company adopted Financial Accounting
Standard No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, which requires that all derivative instruments be
reported on the balance sheet at fair value and establishes criteria for
designation and effectiveness of hedging relationships. The Company uses
forward contracts to hedge its exposure to volatility in currency exchange
rates. In accordance with its risk management policies, the Company formally
documents its hedge relationships, including identification of the hedging
instrument and the hedged items, as well as its risk management objectives
and strategies for undertaking the hedge transaction. The Company also formally
assesses, both at inception and at least quarterly thereafter, whether the
derivatives that are used in hedging transactions are highly effective in
offsetting changes in either the fair value or cash flows of the hedged item.
If a derivative ceases to be a highly effective hedge, the Company
discontinues hedge accounting. The Company does not enter into derivative
instruments for speculation or trading purposes.

Forward Exchange

      The Company manufactures and sells its products in a number of countries
throughout the world and, as a result, is exposed to movements in foreign
currency exchange rates. The primary purpose of the Company's foreign
currency hedging activities is to manage the volatility associated with
foreign currency payments to vendors for purchases of materials in the
normal course of business. The Company primarily utilizes forward exchange
contracts with maturities of less than twelve months, which qualify as foreign
currency hedges. These hedges are intended to offset the effect of transaction
gains and losses, which arise when payments in a foreign currency are made one
to three months after the liability is generated. The fair value of these
instruments at December 31, 2000 was less than $0.1 million. Since an
assessment of these hedges revealed no ineffectiveness, gains and losses on
these instruments are deferred in accumulated other comprehensive income
(OCI), net of tax, until the underlying transaction gain or loss is
recognized in earnings. Amounts in OCI are expected to be reclassified into
earnings within the next twelve months.

                                       7
<PAGE>

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

      We operate and manage lighting and industrial tools businesses. Our
operating companies are divided into two business groups: Lighting and
Industrial Tools.

      The following table presents, for the three months ended December 31, 2000
and 1999, net sales and operating income of our two business groups. This
historical financial information may not be indicative of our future financial
performance as an independent company and does not reflect the pro forma
adjustments giving effect to the spin-off presented in "Unaudited Pro Forma
Combined Condensed Financial Data."

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             (IN MILLIONS)
                                                           THREE MONTHS ENDED
                                                              DECEMBER 31,
                                                             2000     1999
                                                           -------  --------
<S>                                                        <C>      <C>
Net Sales
  Lighting............................................     $ 190.0  $  196.7
  Industrial Tools....................................        25.6      28.5
                                                           -------  --------

    TOTAL NET SALES...................................     $ 215.6  $  225.2
                                                           =======  ========
OPERATING INCOME (LOSS)
  Lighting............................................     $   9.3  $   10.5
  Industrial Tools....................................        (1.3)      1.2
  Management fee and divisional overhead..............        (1.9)     (2.1)
                                                           -------  --------

    TOTAL OPERATING INCOME............................     $   6.1  $    9.6
                                                           =======  ========
</TABLE>

DISCLOSURE CONCERNING FORWARD-LOOKING STATEMENTS

      All statements, other than statements of historical fact, included in the
following Management's Discussion or elsewhere in this Quarterly Report are, or
may be deemed to be, forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Various economic and competitive factors could cause actual results to
differ materially from the expectations reflected in such forward-looking
statements, including factors which are outside the control of the Company, such
as interest rates, foreign currency exchange rates, instability in domestic and
foreign financial markets, consumer spending patterns, availability of consumer
and commercial credit, levels of residential and commercial construction, and
changes in raw material costs, along with the other factors noted in this Report
and in other documents filed by the Company with the Securities and Exchange
Commission. In addition, the Company's future results are subject to
uncertainties relating to the Company's ability to consummate its business
strategy, including realizing market synergies and cost savings from the
integration of its acquired businesses. All subsequent written and oral
forward-looking statements attributable to the Company are expressly qualified
in their entirety by the foregoing factors.

THREE MONTHS ENDED DECEMBER 31, 2000
COMPARED TO THREE MONTHS ENDED DECEMBER 31, 1999

INTRODUCTION

      The Company had sales of $215.6 million and operating income of $6.1
million for the quarter ended December 31, 2000, compared to sales of $225.2
million and operating income of $9.6 million for the same period in the prior
year. Sales decreased $9.6 million (4.3%) and operating income decreased $3.5
million (36.5%) from the same period of the prior year.

                                       8
<PAGE>

      Lighting had sales of $190.0 million and operating income of $9.3 million
for the three months ended December 31, 2000, decreases of $6.7 million (3.4%)
and $1.2 million (11.4%), respectively, from the first quarter of fiscal 2000.
The decrease in sales is primarily attributable to lower volume at the
commercial and institutional indoor division, lost contribution from the
discontinuance of an unprofitable residential product line, unfavorable currency
translation at the European division, partially offset by continued strength at
the commercial and institutional outdoor division. Operating income decreased
due to lower profitability and volume at the commercial and institutional indoor
division, costs incurred at the residential division associated with moving some
production offshore, partially offset by improvement at the European division
despite the effect of unfavorable currency translation.

      Industrial Tools had sales of $25.6 million and an operating loss of $1.3
million for the three months ended December 31, 2000, decreases of $2.9 million
(10.2%) and $2.5 million, respectively, from the first quarter of fiscal
2000. The decrease in sales is primarily attributable to the unfavorable
translation effect of converting UK results into US dollars, partially offset by
the inclusion of S&J France acquired in December 1999. In addition, sales and
operating income have been negatively impacted by severe competition in the
United Kingdom market due to lower cost imports from the Far East, declining
margins on exports and a general slow down in the industrial sector.

      Management fee and divisional overhead costs of $1.9 million, decreased
$0.2 million (9.5%) from the first quarter of fiscal 2000 due to the elimination
of the lighting divisional office in November 1999.

OTHER INCOME, NET

      Included in Other expense, net in fiscal 2001 is a loss on the sale of
property, plant and equipment.

INTEREST AND TAXES

      Total interest expense of $3.5 million for both periods primarily
represents interest on outstanding notes payable to affiliates. Interest income
of $0.2 million for both periods reflects short-term investments of excess cash
at foreign operations.

      The provision for income taxes was $1.0 million for the quarter ended
December 31, 2000, on pre-tax income of $2.6 million (an effective tax rate of
approximately 39%) compared to a $2.5 million provision on pre-tax income of
$6.3 million (an effective tax rate of approximately 40%) in the comparable
period of fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

      Prior to and during the quarter ended December 31, 2000, we financed
our operations and capital and other expenditures from a combination of cash
generated from operations, notes, credit lines, and invested capital provided
by USI or its affiliates. This arrangement will continue to be in effect
until the consummation of the spin-off, after which we expect to meet all
cash requirements through internally-generated funds and borrowings under a
new credit facility and other available sources.

      Our ability to generate cash available for the repayment of debt will
depend upon numerous business factors, including conditions in the U.S. and
world economies, the level of demand for our products, changes in raw
material costs, the level of capital expenditures and working capital
requirements. Excess cash flow from operations (after capital expenditures)
is expected to satisfy our minimal amortization requirements under a new
credit facility after the spin-off.

      Operating activities provided cash of $9.5 million for the three months
ended December 31, 2000, compared with $4.9 million for the comparable period of
the prior year. The increase was due to more efficient working capital
management in the Lighting segment in the first quarter of fiscal 2001 compared
to same period of the prior year.

                                       9
<PAGE>

      Investing activities used cash of $8.3 million for the three months ended
December 31, 2000, compared to $8.5 million for the comparable period of the
prior year. The three months ended December 31, 2000 cash was used primarily for
capital expenditures. The three months ended December 31, 1999 cash was used
primarily for the acquisition of Spear & Jackson France and capital
expenditures.

      Financing activities provided cash of $3.4 million for the three months
ended December 31, 2000, compared to $8.3 million for the comparable period of
the prior year. The three months ended December 31, 2000 cash provided primarily
related to an increase in interest payable to affiliates and transfers with
affiliates partially offset by repayment of notes payable. The three months
ended December 31, 1999 cash provided related to proceeds of affiliated debt and
notes payable and an increase in interest payable to affiliates partially offset
by repayment of notes payable and transfers with affiliates.

      Total invested capital increased $9.1 million from September 30, 2000, due
to the Company's three months comprehensive income of $7.2 million and net
transactions with affiliates of $1.9 million.

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA

      The following unaudited pro forma combined condensed financial data
reflect the spin-off as if it occurred as of December 31, 2000 for unaudited
pro forma combined condensed balance sheet purposes and as of October 1, 1999
for the unaudited pro forma combined condensed statement of operations. The
unaudited pro forma combined condensed financial data reflect our expected
capitalization as a result of the spin-off, the incurrence of indebtedness
under a new credit facility and interest expense (including amortization of
capitalized costs) relating to such borrowings. This data does not
necessarily reflect our results of operations or financial position had the
indebtedness actually been incurred and the spin-off actually been
consummated as of such dates. Also, this data is not necessarily indicative
of our future results of operations or future financial position. The Company
is still in the process of obtaining financing for the spin-off. The
pro-forma credit facility herein assumes $200 million in borrowings.


<TABLE>
<CAPTION>

                                                                     AS OF DECEMBER 31, 2000
                                                          -----------------------------------------
                                                                       PRO-FORMA
                                                            ACTUAL    ADJUSTMENTS         PRO-FORMA
                                                          ----------  -----------         ---------
                                                                  (IN MILLION - UNAUDITED)
                                     ASSETS
<S>                                                        <C>          <C>               <C>
Current assets:
  Cash and cash equivalents ............................    $  14.7     $                 $   14.7
  Trade receivables, net ...............................      161.1                          161.1
  Inventories ..........................................      167.6                          167.6
  Deferred income taxes ................................        9.2                            9.2
  Other current assets .................................        9.1                            9.1
                                                            -------     --------          --------
    Total current assets ...............................      361.7                          361.7
  Property, plant and equipment, net ...................      163.5                          163.5
  Pension assets .......................................        7.7                            7.7
  Other assets .........................................        1.7          7.0 (A)(C)        8.7
  Goodwill, net ........................................       69.7                           69.7
                                                            -------     --------          --------
                                                            $ 604.3     $    7.0          $  611.3
                                                            =======     ========          ========

                        LIABILITIES AND INVESTED CAPITAL
<S>                                                        <C>          <C>               <C>
Current liabilities:
  Notes payable ........................................    $   2.3     $   (2.3)(C)      $     --
  Current maturities of long-term debt .................        0.2         (0.2)(C)            --
  Trade accounts payable ...............................       48.5                           48.5
  Accrued expenses and other liabilities ...............       55.9                           55.9
  Income taxes payable .................................        4.3                            4.3
                                                            -------     --------          --------
    Total current liabilities ..........................      111.2         (2.5)            108.7
Long-term debt .........................................        0.4         (0.4)(C)            --
                                                                           200.0 (B)         200.0
Deferred income taxes ..................................        5.9                            5.9
Other liabilities ......................................       46.3                           46.3
Notes payable to Affiliates ............................      201.6       (201.6)(B)(C)         --
Interest payable to Affiliates .........................       27.0        (27.0)(C)            --
                                                            -------     --------          --------
    Total liabilities ..................................      392.4        (31.5)            360.9
Commitments and contingencies ..........................
Invested capital/Stockholders' equity ..................      211.9         38.5 (C)         250.4
                                                            -------     --------          --------
                                                            $ 604.3     $    7.0          $  611.3
                                                            =======     ========          ========
</TABLE>

      (A) To capitalize the cost of obtaining financing under a new credit
facility, which will be amortized over a five year period.
      (B) To reflect initial borrowings of $200 million under a new credit
facility, which will be utilized for the


                                       10
<PAGE>

repayment of notes payable to affiliates.
      (C) To reflect the amount of notes and interest payable to affiliates
that would be forgiven by USI, assuming $200 million in borrowings by the
Company, the payment by USI of $7 million in debt financing costs and the
$2.9 million repayment of long-term debt and notes payable by USI.

              PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                                           FOR THE THREE MONTHS ENDED
                                                                                 DECEMBER 31, 2000
                                                         --------------------------------------------------------------
                                                                                PRO-FORMA
                                                              ACTUAL           ADJUSTMENTS              PRO-FORMA
                                                         -----------------  -----------------       -------------------
                                                                                (UNAUDITED)
                                                                     (IN MILLIONS, EXCEPT PER SHARE DATA)

<S>                                                         <C>                <C>                        <C>
Net Sales ..........................................        $   215.6          $                          $  215.6
Operating costs and expenses:
  Cost of products sold ............................            146.0                                        146.0
  Selling, general and administrative expenses .....             61.6                  1.5 (A)                63.1
  Management fee and divisional overhead ...........              1.9                 (1.9)(A)                  --
                                                            ---------          -----------                --------
Operating income ...................................              6.1                  0.4                     6.5
Interest expense to Affiliates .....................             (3.3)                 3.3 (B)                  --
Interest expense ...................................             (0.2)                (4.3)(B)                (4.5)
                                                                                      (0.4)(C)                (0.4)
Interest income ....................................              0.2                                          0.2
Other expense, net .................................             (0.2)                                        (0.2)
                                                            ---------          -----------                --------
Income before income taxes .........................              2.6                 (1.0)                    1.6
Provision for income taxes .........................             (1.0)                 0.4 (D)                (0.6)
                                                            ---------          -----------                --------
Net income .........................................        $     1.6          $      (0.6)               $    1.0
                                                            =========          ===========                ========

Basic and diluted earnings per share (E) ...........        $     0.20                                    $    0.13
                                                            ==========                                    =========

</TABLE>


(A)  To eliminate management fees allocated from USI and divisional overhead,
     and to record selling, general and administrative expenses that we expect
     to incur following the spin-off, which includes approximately $6 million in
     expenses for which the Company is committed, principally compensation
     expense and leases for the corporate headquarters and related equipment. In
     addition, the Company expects to incur approximately $4 million in
     professional fees, outside services, bonuses, travel and administrative
     services that are not subject to binding commitments of the Company and
     thus not included in the pro-forma adjustment.

(B)  To reflect interest expense on initial borrowings under a new credit
     facility at an assumed interest rate of 9% per year and eliminate interest
     cost on notes payable to affiliates and existing third party debt. For each
     1/8% change in the assumed interest rate, pro forma interest expense would
     change by approximately $0.3 million per year.

(C)  To amortize the cost of obtaining financing ($7.0 million) over the term of
     a credit facility.

(D)  To reflect tax effects of above adjustments (A through C) at a tax rate of
     40% (inclusive of federal, state and local taxes).

(E)  Basic and diluted earnings per share have been determined assuming that
     7,709,000 shares of our common stock will be issued upon the spin-off. One
     share of our common stock will be issued for every ten USI shares.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      In the normal course of doing business, we are exposed to the risks
associated with changes in interest rates and currency exchange rates. To limit
the risks from such fluctuations, USI has in the past entered into various
hedging transactions. Subsequent to the spin-off, we may borrow in foreign
currency-denominated borrowings to effectively hedge a portion of our net
investments in subsidiaries in foreign countries. We are also exposed to foreign
currency exchange risk related to our international operations and our U.S.
businesses, which import or export goods.

                                       11

<PAGE>

      Effective October 1, 2000, the Company adopted Financial Accounting
Standard No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, which requires that all derivative instruments be
reported on the balance sheet at fair value and establishes criteria for
designation and effectiveness of hedging relationships. The Company uses
forward contracts to hedge its exposure to volatility in currency exchange
rates. In accordance with its risk management policies, the Company formally
documents its hedge relationships, including identification of the hedging
instrument and the hedged items, as well as its risk management objectives
and strategies for undertaking the hedge transaction. The Company also formally
assesses, both at inception and at least quarterly thereafter, whether the
derivatives that are used in hedging transactions are highly effective in
offsetting changes in either the fair value or cash flows of the hedged item.
If a derivative ceases to be a highly effective hedge, the Company
discontinues hedge accounting. The Company does not enter into derivative
instruments for speculation or trading purposes.

Forward Exchange

      The Company manufactures and sells its products in a number of countries
throughout the world and, as a result, is exposed to movements in foreign
currency exchange rates. The primary purpose of the Company's foreign
currency hedging activities is to manage the volatility associated with
foreign currency payments to vendors for purchases of materials in the
normal course of business. The Company primarily utilizes forward exchange
contracts with maturities of less than twelve months, which qualify as foreign
currency hedges. These hedges are intended to offset the effect of transaction
gains and losses, which arise when payments in a foreign currency are made one
to three months after the liability is generated. The fair value of these
instruments at December 31, 2000 was less than $0.1 million. Since an
assessment of these hedges revealed no ineffectiveness, gains and losses on
these instruments are deferred in accumulated other comprehensive income
(OCI), net of tax, until the underlying transaction gain or loss is
recognized in earnings. Amounts in OCI are expected to be reclassified into
earnings within the next twelve months.

                                       12
<PAGE>

      PART II.      OTHER INFORMATION.

ITEM 6.   EXHIBITS

(a)   Exhibits

      None




                                       13
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                    LCA GROUP INC.

Date:  February 20, 2001
                                              By: /s/ James O'Leary
                                                 -------------------------------
                                                  James O'Leary
                                                  (Principal Executive Officer)


                                                  /s/ NICOLA ROSSI
                                                 -------------------------------
                                                  Nicola Rossi
                                                  Corporate Controller
                                                  (Principal Accounting Officer)


                                       14