`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                 F O R M 10 - Q



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

For the Quarterly Period Ended March 31, 2001


[ ] 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 000-21827


                              AMSCAN HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                                13-3911462
(State or other jurisdiction of incorporation   (I.R.S. Employer Identification
              or organization)                              Number)


           80 Grasslands Road
           Elmsford, New York                                10523
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code:   (914) 345-2020


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        



As of May 15, 2001,  1,132.88  shares of  Registrants'  Common Stock,  par value
$0.10, were outstanding.


                              AMSCAN HOLDINGS, INC.
                                    FORM 10-Q

                                 March 31, 2001

                                Table of Contents



                               Part I                                      Page

Item 1    Financial Statements  (Unaudited)

          Consolidated  Balance  Sheets  at  March  31,  2001 and
          December 31, 2000...............................................    3

          Consolidated  Statements  of Income for the Three Ended
          Months Ended March 31, 2001 and 2000............................    4

          Consolidated Statement of Stockholders' Deficit for the
          Three Months Ended March 31, 2001...............................    5

          Consolidated  Statements  of Cash  Flows  for the Three
          Months Ended March 31, 2001 and 2000............................    6

          Notes to Consolidated Financial Statements......................    7

Item 2    Management's   Discussion  and  Analysis  of  Financial
          Condition and Results of Operations.............................   12

Item 3    Quantitative and Qualitative  Disclosures  About Market
          Risk............................................................   15

                                Part II

Item 2    Changes in Securities and Use of Proceeds.......................   16

Item 6    Exhibits and Reports on Form 8-K................................   16


Signature  ...............................................................   17


                                        2

                              AMSCAN HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
                                                                                  March 31,     December 31,
                                                                                    2001            2000
                                                                           -------------   ------------
                                                                                 (Unaudited)       (Note)
                                     ASSETS

Current assets:
   Cash and cash equivalents ................................................     $     864      $   1,469
   Accounts receivable, net of allowances ...................................        67,553         62,678
   Inventories, net of allowances ...........................................        70,148         71,539
   Prepaid expenses and other current assets ................................        11,830          9,272
                                                                                  ---------      ---------
         Total current assets ...............................................       150,395        144,958
Property, plant and equipment, net ..........................................        71,094         69,198
Intangible assets, net ......................................................        58,304         59,360
Other assets, net ...........................................................         7,468          7,111
                                                                                  ---------      ---------

         Total assets .......................................................     $ 287,261      $ 280,627
                                                                                  =========      =========

       LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED AND COMMON STOCK AND
                             STOCKHOLDERS' DEFICIT

Current liabilities:
   Short-term obligations ...................................................     $   8,103      $  10,335
   Accounts payable .........................................................        25,907         28,820
   Accrued expenses .........................................................        18,093         17,091
   Income taxes payable .....................................................         3,775          1,198
   Current portion of long-term obligations .................................         3,495          3,754
                                                                                  ---------      ---------
         Total current liabilities ..........................................        59,373         61,198
Long-term obligations, excluding current portion ............................       261,138        261,815
Deferred income tax liabilities .............................................        13,602         13,314
Other .......................................................................         2,304          2,413
                                                                                  ---------      ---------
         Total liabilities ..................................................       336,417        338,740

Redeemable convertible preferred stock ......................................         6,000           --
Redeemable Common Stock .....................................................        28,768         28,768

Stockholders' deficit:
   Common Stock .............................................................          --             --
   Additional paid-in capital ...............................................           258            233
   Unamortized restricted Common Stock award, net ...........................          (342)          (354)
   Notes receivable from stockholders .......................................          (565)          (548)
   Deficit ..................................................................       (79,992)       (83,867)
   Accumulated other comprehensive loss .....................................        (3,283)        (2,345)
                                                                                  ---------      ---------
         Total stockholders' deficit ........................................       (83,924)       (86,881)
                                                                                  ---------      ---------
         Total liabilities, redeemable convertible preferred and Common stock
           and stockholders' deficit ........................................     $ 287,261      $ 280,627
                                                                                  =========      =========

         Note:   The balance sheet at December 31, 2000 has been derived from the audited consolidated financial
         statements at that date.

          See accompanying notes to consolidated financial statements.

                                       3
                              AMSCAN HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                             (Dollars in thousands)
                                   (Unaudited)


                                                             Three Months Ended March 31,
                                                                 2001          2000
                                                               --------      --------
Net sales ................................................     $ 87,506      $ 77,377
Cost of sales ............................................       55,317        47,313
                                                               --------      --------

         Gross profit ....................................       32,189        30,064

Operating expenses:
   Selling expenses ......................................        8,496         7,016
   General and administrative expenses ...................        8,525         8,199
   Art and development costs .............................        2,085         2,010
                                                               --------      --------
         Total operating expenses ........................       19,106        17,225
                                                               --------      --------
         Income from operations ..........................       13,083        12,839

Interest expense, net ....................................        6,575         6,590
Other expenses, net ......................................          111            69
                                                               --------      --------

         Income before income taxes and minority interests        6,397         6,180

Income tax expense .......................................        2,527         2,441
Minority interests .......................................           (5)           30
                                                               --------      --------
         Net income ......................................     $  3,875      $  3,709
                                                               ========      ========

          See accompanying notes to consolidated financial statements.

                                       4

                              AMSCAN HOLDINGS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                        Three Months Ended March 31, 2001
                             (Dollars in thousands)
                                   (Unaudited)


                                                                Unamortized
                                                                Restricted      Notes                   Accumulated
                                                     Additional   Common      Receivable                   Other
                                            Common     Paid-in  Stock Award,     from                  Comprehensive
                                             Stock     Capital      Net      Stockholders   Deficit         Loss         Total
                                             -----     -------   ---------   ------------  ---------   -------------  ----------


Balance at December 31, 2000...........     $   -        $233      $(354)       $(548)     $(83,867)     $(2,345)      $(86,881)

    Net income.........................                                                       3,875                       8,875
    Net change in cumulative
       translation adjustment..........                                                                     (804)          (804)
    Cumulative effect of a change
      in accounting principle, net
      of taxes (see Notes 5 and 9).....                                                                     (227)          (227)
    Change in fair value of interest
      rate swaps net of taxes
      (see Notes 5 and 9)..............                                                                      (93)           (93)
                                                                                                                       --------
          Comprehensive income.........                                                                                   2,937
    Issuance of Notes Receivable,
      net of payments..................                    25                     (17)                                        8
    Amortization of restricted
       Common Stock award..............                               12                                                     12
                                            -------     -----      -----       ------      --------      -------       --------
Balance at March 31, 2000..............     $   -       $ 258      $(342)       $(565)     $(79,992)     $(3,283)      $(83,924)
                                            =======     =====      =====        =====      ========      =======       ========

          See accompanying notes to consolidated financial statements.

                                       5

                              AMSCAN HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)

                                                                             Three Months Ended March 31,
                                                                                 2001           2000
                                                                              -----------   -----------
Cash flows from operating activities:
    Net income ............................................................     $ 3,875      $ 3,709
    Adjustments to reconcile net income to net cash provided by (used in)
       operating activities:
       Depreciation and amortization ......................................       3,800        3,451
       Amortization of deferred financing costs ...........................         249          218
       Amortization of restricted Common Stock award ......................          12           13
       Provision for doubtful accounts ....................................         465          467
       Deferred income tax expense ........................................         160          220
       Changes in operating assets and liabilities:
           Increase in accounts receivable ................................      (6,340)      (4,407)
           Decrease (increase) in inventories .............................       1,391       (2,353)
           (Increase) decrease in prepaid expenses and other current assets      (1,430)         425
           Increase (decrease) in accounts payable, accrued expenses and
             income taxes payable .........................................         570       (1,604)
       Other, net .........................................................        (724)        (638)
                                                                                -------      -------
          Net cash provided by (used in) operating activities .............       2,028         (499)

Cash flows from investing activities:
    Capital expenditures ..................................................      (4,856)      (2,809)
    Proceeds from sale of property and equipment ..........................        --              2
                                                                                -------      -------
          Net cash used in investing activities ...........................      (4,856)      (2,807)

Cash flows from financing activities:
    Proceeds from issuance of redeemable convertible preferred stock ......       6,000         --
    Proceeds from short-term obligations ..................................          53        5,312
    Repayment of loans, notes payable and long-term obligations ...........      (3,221)      (1,999)
    Other .................................................................         (30)          75
                                                                                -------      -------
          Net cash provided by financing activities .......................       2,802        3,388

Effect of exchange rate changes on cash and cash equivalents ..............        (579)         (92)
                                                                                -------      -------
          Net decrease in cash and cash equivalents .......................        (605)         (10)
Cash and cash equivalents at beginning of period ..........................       1,469          849
                                                                                -------      -------
Cash and cash equivalents at end of period ................................     $   864      $   839
                                                                                =======      =======

Supplemental Disclosures:
               Interest paid ..............................................     $ 4,026      $ 3,696
                   Income taxes paid ......................................     $   418      $   735


          See accompanying notes to consolidated financial statements.

                                       6
                              AMSCAN HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 - Organization and Description of Business

         Amscan  Holdings,  Inc.  ("Amscan  Holdings"  and,  together  with  its
subsidiaries,  "AHI" or the "Company") was  incorporated  on October 3, 1996 for
the  purpose of  becoming  the  holding  company  for Amscan  Inc.  and  certain
affiliated entities.  AHI designs,  manufactures,  contracts for manufacture and
distributes  party and novelty  goods and gifts  principally  in North  America,
South America, Europe, Asia and Australia.


Note 2 - Basis of Presentation

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  for  interim  financial  information.  Accordingly,  they do not
include all of the information and footnotes  required by accounting  principles
generally  accepted in the United States for complete financial  statements.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three months ended March 31, 2001 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2001. The results of operations may be affected by seasonal  factors such as the
timing of  holidays  or industry  factors  that may be specific to a  particular
period,  such as movement in and the general  level of raw material  costs.  For
further information, see the consolidated financial statements and notes thereto
included  in Amscan  Holdings'  Annual  Report  on Form 10-K for the year  ended
December 31, 2000.

         In  connection  with  the  preparation  of the  accompanying  unaudited
consolidated financial statements,  the Company has reclassified certain amounts
in prior periods to conform to the current year presentation.


Note 3 - Inventories

         Inventories consisted of the following (dollars in thousands):

                                                         March 31,    December 31,
                                                           2001           2000
                                                       ------------   -----------

Finished goods .....................................     $ 60,589      $ 61,680
Raw materials ......................................        6,601         7,614
Work-in-process ....................................        5,180         4,677
                                                         --------      --------
                                                           72,370        73,971
Less: reserve for slow moving and obsolete inventory       (2,222)       (2,432)
                                                         --------      --------
                                                         $ 70,148      $ 71,539
                                                         ========      ========

Inventories are valued at the lower of cost, determined on a first-in, first-out
basis, or market.


Note 4 - Income Taxes

         The  consolidated  income tax expense for the three  months ended March
31,  2001  and  2000  was  determined  based  upon  estimates  of the  Company's
consolidated effective income tax rates for the years ending December 31,

                                       7
                              AMSCAN HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)


2001 and 2000, respectively. The differences between the consolidated effective
income tax rate and the U.S. Federal statutory rate are primarily attributable
to state income taxes and the effects of foreign operations.


Note 5 - Comprehensive Income

          Comprehensive income consisted of the following (dollars in thousands):

                                                              Three Months Ended March 31,
                                                              ----------------------------
                                                                   2001          2000
                                                                ----------    ---------


Net income .................................................     $ 3,875      $ 3,709
Net change in cumulative translation adjustment ............        (804)        (178)
Cumulative effect of a change in accounting principle
  to recognize the fair value of the Company's interest rate
  swap contracts, net of taxes (see Note 9) ................        (227)        --
Change in fair value of the Company's interest rate
  swap contracts, net of taxes (see Note 9) ................          93         --
                                                                 -------      -------
                                                                 $ 2,937      $ 3,531
                                                                 =======      =======

          Accumulated other comprehensive loss consisted of (dollars in thousands):

                                                                 March 31,  December 31,
                                                                   2001         2000
                                                                ----------   ---------

Cumulative translation adjustment ..........................     $(3,149)     $(2,345)
Interest rate swap contracts qualifying as
  hedges, net of taxes (see Note 9) ........................        (134)        --
                                                                 -------      -------
                                                                 $(3,283)     $(2,345)
                                                                 =======      =======


Note 6 - Capital Stock

         On March 30, 2001,  the Board of Directors  authorized 500 of preferred
stock,  $0.10 par  value,  and  designated  100  shares  as Series A  Redeemable
Convertible  Preferred  Stock.  Also on March 30,  2001,  the Company  issued 40
shares of Series A Redeemable Convertible Preferred Stock to GS Capital Partners
II, L.P. and certain other private investment funds managed by Goldman,  Sachs &
Co.  (collectively,  "GSCP"),  for  proceeds  of  $6.0  million.  Dividends  are
cumulative  and shall be payable  annually  beginning  March 30, 2002, at 6% per
annum. Such dividends payable on or prior to March 30, 2004, shall be payable in
additional shares of Series A Redeemable  Convertible Preferred Stock based on a
value of $150,000 per share.  Subsequent to March 30, 2004,  dividends  shall be
payable,  at the option of the Company,  either in cash or additional  shares of
Series A Redeemable Convertible Preferred Stock.

         Each share of the Series A Redeemable  Convertible  Preferred  Stock is
convertible at the option of the holder at any time, into shares of Common Stock
of the Company,  $0.10 par value,  at a  conversion  rate of 1.0 share of Common
Stock for each share of Series A Redeemable Convertible Preferred Stock, subject
to adjustment  under  certain  conditions.  As of March 31, 2001,  there were 40
shares of Company Common Stock reserved for such conversion.

                                       8
                              AMSCAN HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)


         The Series A Redeemable  Convertible  Preferred Stock is not redeemable
on or prior to March 30,  2004.  To the  extent  the  Company  shall  have funds
legally  available to redeem these shares,  the Company may redeem these shares,
in whole or, with the  consent of the  holders of a majority of the  outstanding
Series A Redeemable  Convertible Preferred Stock, in part, at a redemption price
of $150,000 per share, in cash,  together with accrued and unpaid dividends.  To
the extent the Company shall have funds legally available to redeem these shares
on March 30, 2008, the Company is required to redeem all  outstanding  shares of
Series A Redeemable  Convertible Preferred Stock at a redemption price per share
equal to $150,000 in cash, together with accrued and unpaid dividends.

         At March 31, 2001 and  December  31,  2000,  the  Company's  authorized
common  stock  consisted of 3,000 shares of common  stock,  $0.10 par value,  of
which 1,132.88 and 1,132.54 shares, respectively, were issued and outstanding.

         The Company has not paid any dividends on its Common Stock and does not
anticipate  paying  cash  dividends  in  the  foreseeable  future.  The  Company
currently  intends to retain its  earnings  for working  capital,  repayment  of
indebtedness,  capital expenditures and general corporate purposes. In addition,
the Company's  current  credit  facility and the  indenture  governing its notes
contain  restrictive  covenants  which have the effect of limiting the Company's
ability to pay dividends or distributions to its stockholders.


Note 7 - Segment Information

         Industry Segments
                  The Company principally operates in one industry segment which
involves the design, manufacture, contract for manufacture and distribution of
party and novelty goods and gifts.

         Geographic Segments
                  The Company's export sales, other than those intercompany
sales reported below as sales between geographic areas, are not material. Sales
between geographic areas primarily consist of sales of finished goods for
distribution in foreign markets. No single foreign operation is significant to
the Company's consolidated operations. Sales between geographic areas are made
at cost plus a share of operating profit.

The Company's geographic area data is as follows (dollars in thousands):

                                              Domestic      Foreign      Eliminations   Consolidated
Three Months Ended March 31, 2001
Sales to unaffiliated customers ........     $  76,455     $  11,051                     $  87,506
Sales between geographic areas .........         5,700                    $  (5,700)          --
                                             ---------     ---------      ---------      ---------
Net sales ..............................     $  82,155     $  11,051      $  (5,700)     $  87,506
                                             =========     =========      =========      =========

Income from operations .................     $  12,231     $     852                     $  13,083
                                             =========     =========
Interest expense, net ..................                                                     6,575
Other expense, net .....................                                                       111
                                                                                         ---------
Income before income taxes and minority
        interests ......................                                                 $   6,397
                                                                                         =========

Long-lived assets, net at March 31, 2001     $ 130,151     $   6,715                     $ 136,866
                                             =========     =========                     =========

                                       9
                              AMSCAN HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)

                                             Domestic       Foreign      Eliminations  Consolidated
Three Months Ended March 31, 2000
Sales to unaffiliated customers ........     $  66,659     $  10,718                     $  77,377
Sales between geographic areas .........         3,484                    $  (3,484)         --
                                             ---------     ---------      ---------      ---------
Net sales ..............................     $  70,143     $  10,718      $  (3,484)     $  77,377
                                             =========     =========      =========      =========

Income from operations .................     $  11,770     $   1,069                     $  12,839
                                             =========     =========
Interest expense, net ..................                                                     6,590
Other expense, net .....................                                                        69
                                                                                         ---------
Income before income taxes and minority
        interests ......................                                                 $   6,180
                                                                                         =========

Long-lived assets, net at March 31, 2000     $ 126,765     $   7,520                     $ 134,285
                                             =========     =========                     =========


Note 8 - Legal Proceedings

         The Company is a party to certain claims and litigation in the ordinary
course of business.  The Company does not believe any of these  proceedings will
result,  individually or in the aggregate,  in a material  adverse effect on its
financial condition or future results of operations.


Note 9 - Derivative Instruments and Hedging Activities

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 133,  "Accounting for
Derivative Instruments and Hedging Activities," and, in June 1999 and June 2000,
issued SFAS No. 137 and No. 138 as amendments thereto.  These statements provide
a comprehensive  and consistent  standard for the recognition and measurement of
derivatives and hedging  activities,  requiring all derivatives to be recognized
on  the  balance  sheet  at  fair  value  and  establishing  standards  for  the
recognition  of changes in such fair value.  These  statements are effective for
fiscal years  beginning after June 15, 2000. As long as hedge  effectiveness  is
maintained,   the  Company's  interest  rate  arrangements   qualify  for  hedge
accounting  as cash flow hedges  under SFAS No. 133 as amended by SFAS 138.  For
derivative  instruments  that are  designated  and  qualify as a cash flow hedge
(i.e.  hedging the exposure to variability in expected future cash flows that is
attributable to a particular risk), the effective portion of the gain or loss on
the  derivative  instrument  is reported as a component  of other  comprehensive
income and reclassified into earnings in the same period or periods during which
the hedged  transaction  affects  earnings.  The  remaining  gain or loss on the
derivative instrument in excess of the cumulative change in the present value of
future cash flows of the hedged item, if any, is recognized in current  earnings
during the period of change. The Company has adopted these statements  effective
January 1, 2001.  Because  of the  Company's  limited  use of  derivatives,  the
adoption  of SFAS No. 133 did not have a  significant  effect on earnings or the
financial position of the Company.

         As part of the Company's  risk  management  strategy,  the Company uses
interest rate swaps to hedge variability of cash flows on its variable rate term
loan ("Term Loan").  The Company is obligated to obtain interest rate protection
on  approximately  one-half of its Term Loan,  pursuant to interest  rate swaps,
caps or other similar  arrangements  satisfactory to GSCP. The Term Loan matures
in December 2004 and provides for  amortization  (in quarterly  installments) of
one percent of the principal amount thereof per year for the

                                       10
                              AMSCAN HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (Unaudited)


first  five  years and 32.3% and 62.7% of the  principal  amount  thereof in the
sixth and seventh  years,  respectively.  The Term Loan bears  interest,  at the
option of the Company, at the lenders' customary base rate plus 1.625% per annum
or at the lenders'  customary  reserve adjusted  Eurodollar rate plus 2.625% per
annum. At March 31, 2001, the floating interest rate on the Term Loan was 8.11%.
The Company is currently  involved in three interest rate swap transactions with
Goldman  Sachs  Capital  Markets,  L.P.  and a  financial  institution  covering
$76,000,000 of its outstanding borrowings under the Term Loan. The interest rate
swap  contracts  require  the  Company  to settle  the  difference  in  interest
obligations  quarterly.  Net payments to (receipts from) the counterparty  under
the swap contracts  have been recorded as additions to (reductions  of) interest
expense.

         The fair value of interest rate swaps is the estimated  amount that the
counterparty  would  receive  or pay to  terminate  the swap  agreements  at the
reporting  date,  taking into  account  current  interest  rates and the current
creditworthiness of the swap counterparties. At March 31, 2001, these hedges had
an unrealized loss of $0.1 million, net of taxes, which has been included in the
Company's  accumulated  other  comprehensive  loss (see Note 5). The ineffective
portion relating to these hedges was not material during the quarter ended March
31, 2001. At March 31, 2001, the Company expects to reclassify the loss on these
hedges from  accumulated  other  comprehensive  loss to  earnings  over the next
twelve months during which the hedged transaction  affects earnings.  The actual
amount that will be  reclassified  to earnings  over the next twelve months will
vary from this amount, as a result of changes in market conditions.

                                       11
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

Percentage of Net Sales
                                                         Three Months Ended March 31,
                                                              2001        2000
                                                              ----        ----
Net sales ............................................       100.0%     100.0%
Cost of sales ........................................        63.2       61.1
                                                             -----      -----
     Gross profit ....................................        36.8       38.9
Operating expenses:
    Selling expenses .................................         9.7        9.1
    General and administrative expenses ..............         9.8       10.6
    Art and development costs ........................         2.4        2.6
                                                             -----      -----
Total operating expenses .............................        21.9       22.3
                                                             -----      -----
    Income from operations ...........................        14.9       16.6
Interest expense, net ................................         7.5        8.5
Other expense, net ...................................         0.1        0.1
                                                             -----      -----
    Income before income taxes and minority interests          7.3        8.0
Income tax expense ...................................         2.9        3.2
Minority interests
                                                             -----      -----
    Net income .......................................         4.4%       4.8%
                                                             =====      =====

         Net sales of $87.5  million for the three  months  ended March 31, 2001
were $10.1  million  higher than net sales for the three  months ended March 31,
2000. The increase in net sales reflects increased sales of party goods and gift
items to  independent  party goods and  specialty  stores,  as well as increased
sales of solid color tableware to superstores under a program which began in the
second quarter of 2000.

         Gross profit for the first quarter of 2001 of 36.8% was 2.1% lower than
the corresponding  period in 2000 as incremental  margin achieved as a result of
increased  sales was more than offset by lower margins  attributable  to product
mix,  principally  solid color  tableware,  sales to other  distributors and the
impact of foreign currency fluctuations on international sales margin.

         Selling  expenses of $8.5  million  for the first  quarter of 2001 were
$1.5 million higher than those of the corresponding period in 2000 and increased
to 9.7% of net sales from 9.1% of net sales.  The  increase in selling  expenses
reflects the continued  development of a specialty sales force, which has nearly
doubled since the beginning of 2000, and increased marketing initiatives.

         General and  administrative  expenses  for the three months ended March
31,  2001 of $8.5  million  was $0.3  million  higher as  compared  to the first
quarter  of 2000  but  decreased  as a  percent  of net  sales  by 0.8% to 9.8%,
reflecting the increase in net sales noted above.

         Art and  development  costs of $2.1  million  for the first  quarter of
2001,  were comparable to the  corresponding  period in 2000. As a percentage of
net sales, art and development  costs were 2.4% for the first quarter of 2001 as
compared to 2.6% for the corresponding period of 1999.

         Interest  expense  of $6.6  million  for the first  quarter of 2001 was
comparable to the corresponding period in 2000. However,  during the three-month
period ended March 31, 2001, the Company capitalized $0.2 million of interest on
debt associated  with the  construction  of its new  distribution  facility (see
"Liquidity and Capital Resources").

         Income  taxes for the first  quarter  of 2001 and 2000 were  based upon
estimated  consolidated effective income tax rates of 39.5% for the years ending
December 31, 2001 and 2000.

                                       12
Liquidity and Capital Resources

         At March 31, 2001, the Company had an  outstanding  Term Loan of $150.8
million provided under a bank credit  agreement (the "Bank Credit  Facilities"),
together  with  senior  subordinated  notes  of  $110.0  million  (the  "Notes")
(collectively,  the  "Financings").  The Term Loan matures in December  2004 and
provides for  amortization  (in  quarterly  installments)  of one percent of the
principal  amount  thereof per year for the first five years and 32.3% and 62.7%
of the principal  amount thereof in the sixth and seventh  years,  respectively.
The Term Loan bears  interest,  at the option of the  Company,  at the  lenders'
customary base rate plus 1.625% per annum or at the lenders'  customary  reserve
adjusted  Eurodollar rate plus 2.625% per annum. At March 31, 2001, the floating
interest rate on the Term Loan was 8.11%. The Notes bear interest at a rate of 9
7/8% per annum and mature in  December  2007.  The  Company is  required to make
prepayments on the Bank Credit Facilities under certain circumstances, including
upon certain asset sales and issuance of debt or equity  securities and based on
cash flows, as defined.

         In addition to the Term Loan,  the Bank Credit  Facilities  provide for
revolving  loan  borrowings  of  up  to  $50  million  (the  "Revolving   Credit
Facility").  The Revolving Credit Facility,  expires on December 31, 2002, bears
interest,  at the option of the  Company,  at the lenders'  customary  base rate
plus,  based on  certain  terms,  a range of 1.00% to 1.50%  per annum or at the
lenders'  customary  reserve  adjusted  Eurodollar  rate plus,  based on certain
terms,  a range of 2.00% to 2.50% per annum.  Interest on  balances  outstanding
under the  Revolving  Credit  Facility are subject to  adjustment  in the future
based on the Company's performance. At March 31, 2001, the Company had borrowing
capacity of approximately $37.4 million under the Revolving Credit Facility.

         At March 31, 2001, the Company had three interest rate swap contracts
outstanding with a financial institution and Goldman Sachs Capital Markets, L.P.
("GSCM") covering $76.0 million of its Term Loan at effective interest rates
ranging from 7.68% to 9.30%.

         On March 30,  2001,  the Board of  Directors  authorized  500 shares of
preferred  stock,  $0.10  par  value,  and  designated  100  shares  as Series A
Redeemable Convertible Preferred.  Also on March 30, 2001, the Company issued 40
shares of Series A Redeemable  Convertible  Preferred Stock to GSCP for proceeds
of $6.0 million.

         In October 2000, the Company purchased property for the construction of
a new  domestic  distribution  facility  for $4.9  million  and  entered  into a
contract for the design and  construction  of the new facility with an estimated
cost, excluding capitalized interest, of $22.1 million.  Through March 31, 2001,
the Company  incurred costs of $5.3 million  relating to the construction of the
new  facility,  including  $0.4  million  of  capitalized  interest  costs.  The
expenditures  were  financed  through  March 31,  2001 by  borrowings  under the
Revolving Credit Facility.  The Company intends to permanently  finance both the
purchase of property and the  construction  of the  facility  using the proceeds
from the issuance of the Series A Redeemable Convertible Preferred Stock of $6.0
million  noted above,  long-term  borrowings  totaling $20 million,  and working
capital of $1.0 million.  The Company has obtained firm commitments totaling $20
million  for the  permanent  financings  from both the New York Job  Development
Authority and a financial institution.  The Company has amended and restated its
Bank Credit  Facilities  to provide  for,  among other  things,  the  additional
borrowings  and future  capital  expenditures  for the  construction  of the new
facility.

         Based upon the current level of operations and anticipated  growth, the
Company  anticipates  that its  operating  cash flow,  together  with  available
borrowings  under the  Revolving  Credit  Facility  will be adequate to meet its
anticipated  future  requirements for working capital and operating expenses and
to service its debt  requirements  as they become due.  However,  the  Company's
ability to make scheduled payments of principal of, or to pay interest on, or to
refinance its indebtedness and to satisfy its other obligations will depend upon
its future  performance,  which, to a certain extent, will be subject to general
economic, financial, competitive, business and other factors beyond its control.

         The Financings may affect the Company's  ability to make future capital
expenditures  and  potential  acquisitions.

                                       13



However, management believes that current asset levels provide adequate capacity
to support its operations for at least the next 12 months. As of March 31, 2001,
the Company did not have material  commitments  for capital  expenditures  other
than for the construction of a new domestic distribution facility.


Cash Flow Data - Three  Months  Ended  March 31, 2001  Compared to Three  Months
                 Ended March 31, 2000

         During the three  months  ended March 31,  2001,  net cash  provided by
operating  activities  totaled  $2.0  million,  an increase  of $2.5  million as
compared  to the  corresponding  period  in 2000.  Net  cash  flow  provided  by
operating  activities  before changes in other operating  assets and liabilities
for the three  months  ended March 31, 2001 and 2000,  was $8.6 million and $8.1
million,  respectively.  Net cash used as a result of changes in other operating
assets and  liabilities  for the three months ended March 31, 2001 and 2000, was
$6.6 million and $8.6 million, respectively.

         During  the  three  months  ended  March  31,  2001,  net cash  used in
investing   activities  of  $4.9  million  included  payments  of  $2.3  million
associated  with the  construction of a new domestic  distribution  facility and
additional  investments primarily in manufacturing  equipment.  Net cash used in
investing   activities  during  the  first  quarter  of  2000  of  $2.8  million
principally reflected increased levels of capital expenditures for manufacturing
machinery and equipment.

         During the three  months  ended March 31,  2001,  net cash  provided by
financing  activities was $2.8 million and primarily  consisted of proceeds from
the issuance of the Series A Redeemable  Convertible  Preferred  Stock  totaling
$6.0 million and proceeds from short-term working capital borrowings,  partially
offset by the  repayment of a portion of the Term Loan,  and  repayment of other
long-term  obligations.  During the comparable period in 2000, net cash provided
by financing  activities of $3.4 million  principally  consisted of the proceeds
from short-term  working capital  borrowings,  partially offset by the scheduled
repayment and a $1.3 million prepayment of the Term Loan, and repayment of other
long-term obligations.


Legal Proceedings

         The Company is a party to certain claims and litigation in the ordinary
course of business.  The Company does not believe any of these  proceedings will
result,  individually or in the aggregate,  in a material  adverse effect on its
financial condition or future results of operations.


Recently Issued Accounting Standards

         Pronouncements  issued by the Financial  Accounting  Standards Board or
other authoritative  accounting standards groups with future effective dates are
either not  applicable or not  significant  to the  financial  statements of the
Company.


"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995

         This report includes "forward-looking statements" within the meaning of
various provisions of the Private Securities  Litigation Reform Act of 1995. All
statements,  other than statements of historical facts,  included in this report
that address  activities,  events or  developments  that the Company  expects or
anticipates  will  or may  occur  in the  future,  future  capital  expenditures
(including  the amount and nature  thereof),  business  strategy and measures to
implement strategy,  including any changes to operations,  goals,  expansion and
growth of the Company's  business and  operations,  plans,  references to future
success and other such matters are forward-looking statements.  These statements
are based on certain  assumptions  and analyses  made by the Company in light of
its experience and its

                                       14



perception  of  historical  trends,   current  conditions  and  expected  future
developments  as well as  other  factors  it  believes  are  appropriate  in the
circumstances.  Actual  results  may differ  materially  from  those  discussed.
Whether  actual  results  and  developments  will  conform  with  the  Company's
expectations and predictions is subject to a number of risks and  uncertainties,
including,  but not limited to (1) the  concentration of sales by the Company to
party goods  superstores  where the  reduction of purchases by a small number of
customers could materially reduce the Company's sales and profitability, (2) the
concentration of the Company's credit risk in party goods  superstores,  several
of which are privately held and have expanded  rapidly in recent years,  (3) the
failure by the Company to anticipate  changes in tastes and preferences of party
goods  retailers and  consumers,  (4)  introduction  of new product lines by the
Company, (5) the introduction of new products by the Company's competitors,  (6)
the  inability  of the  Company  to  increase  prices to  recover  fully  future
increases in raw material prices,  especially increases in paper prices, (7) the
loss of key employees,  (8) changes in general  business  conditions,  (9) other
factors which might be described from time to time in the Company's filings with
the  Commission,  and (10) other  factors  which are  beyond the  control of the
Company. Consequently, all of the forward-looking statements made in this report
are  qualified  by  these  cautionary  statements,  and the  actual  results  or
developments  anticipated  by the  Company  may  not be  realized  or,  even  if
substantially  realized, may not have the expected consequences to or effects on
the Company or its business or operations. Although the Company believes that it
has the product  offerings and resources needed for continued growth in revenues
and margins,  future  revenue and margin  trends  cannot be reliably  predicted.
Changes in such  trends may cause the  Company to adjust its  operations  in the
future. Because of the foregoing and other factors,  recent trends should not be
considered  reliable  indicators of future financial results.  In addition,  the
highly  leveraged  nature of the  Company  may impair its ability to finance its
future  operations and capital needs and its  flexibility to respond to changing
business and economic conditions and business opportunities.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         The Company's  earnings are affected by changes in interest  rates as a
result of its  issuance  of variable  rate  indebtedness.  However,  the Company
utilizes interest rate swap agreements to manage the market risk associated with
fluctuations  in interest  rates.  If market  interest  rates for the  Company's
variable rate indebtedness averaged 2% more than the interest rate actually paid
for the three  months  ended March 31,  2001 and 2000,  the  Company's  interest
expense,  after  considering  the effects of its interest rate swap  agreements,
would have  increased,  and income  before  income taxes and minority  interests
would have  decreased,  by $0.4 million and $0.2  million,  respectively.  These
amounts are determined by considering  the impact of the  hypothetical  interest
rates on the Company's  borrowing  cost,  short-term  investment  balances,  and
interest  rate swap  agreements.  This analysis does not consider the effects of
the  reduced  level of overall  economic  activity  that could  exist in such an
environment.  Further,  in the event of a change of such  magnitude,  management
would  likely  take  actions to further  mitigate  its  exposure  to the change.
However,  due to the uncertainty of the specific actions that would be taken and
their  possible  effects,  the  sensitivity  analysis  assumes no changes in the
Company's financial structure.

         The Company's  earnings are also affected by  fluctuations in the value
of the U.S. dollar as compared to foreign currencies,  predominately in European
countries, as a result of the sales of its products in foreign markets.  Foreign
currency forward  contracts are used  periodically to hedge against the earnings
effects of such  fluctuations.  A uniform 10%  strengthening in the value of the
dollar  relative to the  currencies  in which the  Company's  foreign  sales are
denominated  would have  resulted in a decrease in gross  profit of $0.4 million
for each of the three months ended March 31, 2001 and 2000, respectively.  These
calculations  assume that each exchange rate would change in the same  direction
relative to the U.S.  dollar.  In  addition to the direct  effects of changes in
exchange rates, which could change the U.S. dollar value of the resulting sales,
changes  in  exchange  rates  also  affect  the  volume of sales or the  foreign
currency sales price as competitors'  products  become more or less  attractive.
The Company's sensitivity analysis of the effects of changes in foreign currency
exchange  rates does not factor in a potential  change in sales  levels or local
currency prices.

                                       15
Part II

Item 2.  Changes in Securities and Use of Proceeds

         a)    Not applicable.

         b)    Not applicable.

         c)    On March 30, 2001,  the Board of Directors  authorized 500 of its
               preferred  stock,  $0.10 par value,  and designated 100 shares as
               Series A Redeemable  Convertible  Preferred Stock.  Also on March
               30,  2001,  the Company  issued 40 shares of Series A  Redeemable
               Convertible  Preferred  Stock  to  GSCP,  for  proceeds  of  $6.0
               million.  No underwriting  discounts or commissions  were paid in
               connection  with such sale. This issuance was part of an offering
               to a limited number of accredited investors. Such sale was exempt
               under Section 4 (2) of the Securities Act of 1933.

               In March 2001, the Company issued 0.333 shares of Common Stock to
               a former  employee upon exercise of a stock option for $24,975 in
               exchange  for a note  receivable.  No  underwriting  discounts or
               commissions  were paid in connection  with such sale.  This share
               was  part  of an  offering  to a  limited  number  of  accredited
               investors  and  employees  of the  Company.  Such sale was exempt
               under Section 4 (2) of the Securities Act of 1933.

          d)   Not applicable.


Item 6.   Exhibits and Reports on Form 8-K

          (a)     Exhibits

         Exhibit
         Number   Description

          (b)     Reports on Form 8 - K

                  None.

                                       16



                                    SIGNATURE

         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.



                                      AMSCAN HOLDINGS, INC.


                                        By: /s/ Michael A. Correale
                                                Michael A. Correale
                                                Vice President
                                                (on behalf of the registrant and
Date: May 15, 2001                               as principal accounting officer)




                                       17`