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 June 30, 1999


[ ]  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                (I.R.S. Employer Identification
 incorporation 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 August 11, 1999,  1,132.41 shares of Registrants'  Common Stock, par value
$0.10, were outstanding.



<PAGE>


                              AMSCAN HOLDINGS, INC.
                                    FORM 10-Q

                                  June 30, 1999

                                Table of Contents



                                   Part I                                   Page

Item 1    Financial Statements  (Unaudited)

          Consolidated Balance Sheets at June 30, 1999 and
          December 31, 1998...............................................    3

          Consolidated Statements of Income for the Three
          and Six Months Ended June 30, 1999 and 1998.....................    4

          Consolidated Statement of Stockholders' Deficit
          for the Six Months Ended June 30, 1999..........................    5

          Consolidated Statements of Cash Flows for the
          Six Months Ended June 30, 1999 and 1998.........................    6

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

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

Item 3    Quantitative and Qualitative Disclosures About
          Market Risk ....................................................   16


                                     Part II


Item 6    Exhibits and Reports on Form 8-K................................   17


Signature ................................................................   18













                                       2
<PAGE>



<TABLE>
<CAPTION>

                              AMSCAN HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                                                                              June 30,          December 31,
                                                                                                1999                1998
                                                                                              -------           -----------
                                                                                             (Unaudited)           (Note)

                                     ASSETS
<S>                                                                                          <C>                 <C>
Current assets:
   Cash and cash equivalents..............................................................   $       766         $    1,117
   Accounts receivable, net of allowances.................................................        57,538             49,339
   Inventories............................................................................        57,582             54,691
   Prepaid expenses and other current assets..............................................        11,464              9,113
                                                                                              ----------        -----------
         Total current assets.............................................................       127,350            114,260
Property, plant and equipment, net........................................................        60,993             59,260
Intangible assets, net....................................................................        64,843             66,500
Other assets, net.........................................................................        11,236              8,832
                                                                                              ----------        -----------
         Total assets.....................................................................      $264,422           $248,852
                                                                                                ========           ========

         LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Short-term obligations.................................................................     $  16,625          $   9,628
   Accounts payable.......................................................................        17,843             11,494
   Accrued expenses.......................................................................        16,643             17,520
   Income taxes payable...................................................................         1,386                593
   Current portion of long-term obligations...............................................         3,322              3,549
                                                                                              ----------         ----------
         Total current liabilities........................................................        55,819             42,784
Long-term obligations, excluding current portion..........................................       269,130            270,127
Deferred income tax liabilities...........................................................        10,046              8,128
Other.....................................................................................         3,163              3,553
                                                                                              ----------         ----------
         Total liabilities................................................................       338,158            324,592

Redeemable Common Stock...................................................................        19,547             19,547

Stockholders' deficit:
   Common Stock...........................................................................             -                  -
   Additional paid-in capital.............................................................           225                225
   Unamortized restricted Common Stock award, net.........................................          (490)              (575)
   Notes receivable from officers.........................................................          (674)              (718)
   Deficit ...............................................................................       (91,125)           (92,969)
   Accumulated other comprehensive loss...................................................        (1,219)            (1,250)
                                                                                             -----------         ----------
         Total stockholders' deficit......................................................       (93,283)           (95,287)
                                                                                              ----------          ---------

         Total liabilities, redeemable Common Stock and stockholders' deficit.............      $264,422           $248,852
                                                                                                ========           ========
</TABLE>

         Note:  The balance sheet at December 31, 1998 has been derived from the
audited consolidated financial statements at that date.


          See accompanying notes to consolidated financial statements.




                                       3
<PAGE>



<TABLE>
<CAPTION>

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


                                                                           Three Months Ended June 30,   Six Months Ended June 30,
                                                                           ---------------------------   -------------------------
                                                                                1999         1998           1999          1998
                                                                                ----         ----           ----          ----
              <S>                                                              <C>          <C>           <C>          <C>
              Net sales..................................................      $73,203      $48,686       $149,643     $104,247
              Cost of sales..............................................       46,695       31,023         94,815       67,012
                                                                              --------     --------      ---------    ---------
                    Gross profit.........................................       26,508       17,663         54,828       37,235

              Operating expenses:
                 Selling expenses........................................        5,503        3,533         11,357        7,159
                 General and administrative expenses.....................        7,483        4,149         14,527        8,468
                 Provision for doubtful accounts ($5,950 in the
                   six months ended June 30, 1999 related
                   to Party City Corporation)............................          709          531          7,121        1,303
                 Art and development costs...............................        2,947        1,596          5,613        3,216
                 Restructuring charges...................................            -        2,400              -        2,400
                                                                              --------     --------      ---------    ---------
                    Total operating expenses.............................       16,642       12,209         38,618       22,546
                                                                              --------     --------      ---------    ---------
                    Income from operations...............................        9,866        5,454         16,210       14,689

              Interest expense, net......................................        6,604        5,498         13,038       10,763
              Other expense (income), net................................           43          (19)            65          (59)
                                                                              --------     --------      ---------    ---------
                    Income (loss) before income taxes and
                      minority interests.................................        3,219          (25)         3,107        3,985

              Income tax expense (benefit)...............................        1,315          (10)         1,269        1,654
              Minority interests.........................................          (25)         (45)            (6)          30
                                                                              --------     --------      ---------    ---------
                    Net income...........................................     $  1,929    $      30      $   1,844    $   2,301
                                                                              ========    ==========     =========    =========
</TABLE>

















          See accompanying notes to consolidated financial statements.




                                       4
<PAGE>



<TABLE>
<CAPTION>

                              AMSCAN HOLDINGS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                         Six Months Ended June 30, 1999
                             (Dollars in thousands)
                                   (Unaudited)


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

<S>                                <C>       <C>              <C>             <C>            <C>            <C>          <C>
Balance at December 31, 1998..     $     -   $    225         $(575)          $(718)         $(92,969)      $(1,250)     $(95,287)

   Net income.................                                                                  1,844                       1,844
   Net change in cumulative
      translation adjustment..                                                                                   31            31
                                                                                                                         --------
         Comprehensive income.                                                                                              1,875

   Payments received on  notes
      receivable from officers                                                   44                                            44
   Amortization of restricted
      Common Stock award......                                   85                                                            85
                                  ---------  ----------      -------        ----------       ---------     -----------   ---------

Balance at June 30, 1999......    $       -  $      225       $(490)          $(674)         $(91,125)      $(1,219)     $(93,283)
                                  =========  ==========       ======          ======         =========      ========     =========
</TABLE>


























          See accompanying notes to consolidated financial statements.




                                       5
<PAGE>



<TABLE>
<CAPTION>

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

                                                                                               Six Months Ended June 30,
                                                                                               -------------------------
                                                                                                 1999             1998
                                                                                              ----------       ----------
<S>                                                                                            <C>            <C>
Cash flows from operating activities:
    Net income..........................................................................       $    1,844     $   2,301
    Adjustments to reconcile net income to net cash (used in) provided  by
       operating activities:
       Depreciation and amortization....................................................           6,575          3,445
       Amortization of deferred financing costs.........................................             435            348
       Amortization of restricted Common Stock award....................................              85            130
       Provision for doubtful accounts..................................................           7,121          1,303
       Restructuring charges............................................................                          2,400
       Deferred income tax expense (benefit)............................................             164           (251)
       Loss (gain) on disposal of property and equipment................................              72             (2)
       Changes in operating assets and liabilities:
          (Increase) decrease in accounts receivable....................................         (15,252)           880
          (Increase) decrease in inventories............................................          (2,891)         5,259
          (Increase) decrease in prepaid expenses and other current assets..............            (597)           492
          Increase (decrease) in accounts payable, accrued expenses and
             income taxes payable.......................................................           6,167         (8,905)
       Other, net.......................................................................          (3,893)        (1,294)
                                                                                               ---------      ---------
          Net cash (used in) provided by operating activities...........................            (170)         6,106

Cash flows from investing activities:
    Capital expenditures................................................................          (6,234)        (2,474)
    Proceeds from sale of property and equipment........................................             113             23
                                                                                               ---------      ---------
          Net cash used in investing activities.........................................          (6,121)        (2,451)

Cash flows from financing activities:
    Payments to acquire Common Stock in Merger..........................................             (25)       (93,085)
    Net proceeds from issuance of Common Stock..........................................                            181
    Proceeds from short-term obligations................................................           6,997            167
    Repayment of loans, notes payable and long-term obligations.........................          (1,286)        (2,058)
    Other ..............................................................................              44             22
                                                                                               ---------      ---------
          Net cash provided by (used in) financing activities...........................           5,730        (94,773)

Effect of exchange rate changes on cash and cash equivalents............................             210           (588)
                                                                                               ---------      ---------
          Net decrease in cash and cash equivalents.....................................            (351)       (91,706)
Cash and cash equivalents at beginning of period........................................           1,117        111,539
                                                                                               ---------      ---------
Cash and cash equivalents at end of period..............................................       $     766      $  19,833
                                                                                               =========      =========

Supplemental Disclosures:
           Interest paid................................................................         $11,946         $8,345
           Taxes paid, net of refunds...................................................            $266         $2,297
</TABLE>


Capital lease  obligations  of $651 and $94 were incurred  during the six months
ended June 30, 1999 and 1998, respectively.

          See accompanying notes to consolidated financial statements.




                                       6
<PAGE>




                              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.

         Amscan Holdings and its subsidiaries design, manufacture,  contract for
manufacture  and  distribute  party and novelty goods  principally in the United
States, Canada and Europe.


Note 2:  Basis of Presentation

         The consolidated  financial  statements  include the accounts of Amscan
Holdings and its subsidiaries.

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles 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 and six-month periods ended June
30, 1999 are not necessarily  indicative of the results that may be expected for
the year ending  December 31, 1999. 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 financial  statements and
footnotes  thereto  included in the Amscan  Holdings' Annual Report on Form 10-K
for the year ended December 31, 1998.


Note 3:  Inventories

         Inventories consisted of the following (dollars in thousands):
<TABLE>
<CAPTION>

                                                                                June 30,        December 31,
                                                                                  1999               1998
                                                                                ---------       ------------
           <S>                                                                   <C>               <C>
           Finished goods  ................................................      $49,426           $48,093
           Raw materials  .................................................        5,087             4,845
           Work-in-process  ...............................................        4,677             3,345
                                                                                ---------         ---------
                                                                                  59,190            56,283
           Less:  reserve for slow moving and obsolete inventory...........       (1,608)           (1,592)
                                                                                ---------         ---------
                                                                                 $57,582           $54,691
                                                                                =========         =========
</TABLE>

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




                                       7
<PAGE>




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


Note 4:  Income Taxes

         The  consolidated  income tax expense  (benefit)  for the three and six
month periods ended June 30, 1999 and 1998 were determined  based upon estimates
of the Company's  consolidated  effective  income tax rates for the years ending
December  31,  1999  and  1998,   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 (Loss)

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

<TABLE>
<CAPTION>
                                                            Three Months Ended                Six Months Ended
                                                                  June 30,                         June 30,
                                                        ----------------------------       ----------------------
                                                            1999          1998                1999        1998
                                                            ----          ----                ----        ----

           <S>                                             <C>          <C>                 <C>          <C>
           Net income..............................        $1,929       $  30               $1,844       $2,301
           Net change in cumulative
             translation adjustment...............             37        (530)                  31         (545)
                                                           ------        -----              ------       ------
           Comprehensive income (loss)........             $1,966       $(500)              $1,875       $1,756
                                                           ======       ======              ======       ======
</TABLE>

         Accumulated other  comprehensive loss at June 30, 1999 and December 31,
1998 consisted solely of the Company's cumulative translation adjustment.


Note 6:  Capital Stock

         At June 30, 1999 and  December 31, 1998,  respectively,  the  Company's
authorized capital stock consisted of 5,000,000 shares of preferred stock, $0.10
par value,  of which no shares were issued or  outstanding,  and 3,000 shares of
common  stock,  $0.10 par  value,  of which  1,132.41  shares  were  issued  and
outstanding.




                                       8
<PAGE>




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


Note 7:  Segment Information

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

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 one 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):

<TABLE>
<CAPTION>

                                                                  Domestic       Foreign       Eliminations      Consolidated
                                                                  --------       -------       ------------      ------------
         <S>                                                      <C>            <C>            <C>                <C>
         Three Months Ended June 30, 1999
         Sales to unaffiliated customers...................       $ 63,269       $ 9,934                           $ 73,203
         Sales between geographic areas....................          5,630                      $  (5,630)                -
                                                                  --------       -------        ---------          --------
         Net sales.........................................       $ 68,899       $ 9,934        $  (5,630)         $ 73,203
                                                                  ========        ======        =========          ========

         Income (loss) from operations.....................       $ 10,096       $  (230)                          $  9,866
                                                                  ========       =======
         Interest expense, net.............................                                                           6,604
         Other expense, net................................                                                              43
                                                                                                                   --------
         Income before income taxes and minority
             interests.....................................                                                        $  3,219
                                                                                                                   ========

         Long-lived assets at June 30, 1999                       $135,787       $ 9,379        $  (8,094)         $137,072
                                                                  ========       =======        =========          ========

         Three Months Ended June 30, 1998
         Sales to unaffiliated customers...................       $ 43,066       $ 5,620                           $ 48,686
         Sales between geographic areas....................          2,396                      $  (2,396)                -
                                                                  --------       -------        ---------          --------
         Net sales.........................................       $ 45,462       $ 5,620        $  (2,396)         $ 48,686
                                                                  ========       =======        =========          ========

         Income from operations............................       $  5,103       $   351                           $  5,454
                                                                  ========       =======
         Interest expense, net.............................                                                           5,498
         Other income, net.................................                                                             (19)
                                                                                                                   --------
         Loss before income taxes and minority
             interests.....................................                                                        $    (25)
                                                                                                                   ========
</TABLE>






                                       9
<PAGE>




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

<TABLE>
<CAPTION>

                                                                  Domestic       Foreign       Eliminations      Consolidated
                                                                  --------       -------       ------------      ------------

         <S>                                                      <C>            <C>             <C>              <C>
         Six Months Ended June 30, 1999
         Sales to unaffiliated customers...................       $129,803       $19,840                          $149,643
         Sales between geographic areas....................         10,126           471         $(10,597)               -
                                                                  --------       -------         --------         --------
         Net sales.........................................       $139,929       $20,311         $(10,597)        $149,643
                                                                  ========       =======         ========         ========

         Income from operations............................       $ 16,135       $    75                          $ 16,210
                                                                  ========       =======
         Interest expense, net.............................                                                         13,038
         Other expense, net................................                                                             65
                                                                                                                  --------
         Income before income taxes and minority
             interests.....................................                                                       $  3,107
                                                                                                                  ========


         Six Months Ended June 30, 1998
         Sales to unaffiliated customers...................        $92,353       $11,894                          $104,247
         Sales between geographic areas....................          4,189                        $(4,189)               -
                                                                   -------       -------          --------        ---------
         Net sales.........................................        $96,542       $11,894          $(4,189)        $104,247
                                                                   =======       =======          =======         ========

         Income from operations............................        $14,025       $   664                          $ 14,689
                                                                   =======       =======
         Interest expense, net.............................                                                         10,763
         Other income, net.................................                                                            (59)
                                                                                                                  --------
         Income before income taxes and minority
             interests.....................................                                                       $  3,985
                                                                                                                  ========
</TABLE>


Note 8:  Provision for Doubtful Accounts

         During the first quarter of 1999, the Company's largest customer, Party
City Corporation ("Party City") announced that, due to difficulties implementing
new financial reporting and accounting systems, it would not be able to complete
its year end audit and that it would be in default of certain  covenants  of its
credit facility as of December 31, 1998. The Company understands that Party City
is  negotiating  with its  lenders  to amend its  credit  facility  and with its
vendors to amend existing  credit terms on certain  inventory.  The Company also
understands that Party City is considering  various  alternatives to improve its
current financial  condition.  Based on the current financial condition of Party
City, the Company has established reserves  approximating 50% of the $13,200,000
accounts  receivable  balance due from Party City  corporate  stores at June 30,
1999, including $5,950,000 charged to the provision for doubtful accounts during
the first quarter of 1999.

         For the six months ended June 30, 1999 and 1998,  sales to Party City's
corporate  stores  represented 12% and 13%,  respectively,  of consolidated  net
sales. If Party City were to significantly reduce their volume of purchases from
the Company for any reason,  the  Company's  financial  condition and results of
operations could be materially adversely affected.








                                       10
<PAGE>




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

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998

Results of Operations
Percentage of Net Sales


                                                     Three Months Ended June 30,
                                                         1999            1998
                                                      ----------      ---------
          Net sales...................................    100.0%        100.0%
          Cost of sales...............................     63.8          63.7
                                                         ------        ------
                  Gross profit........................     36.2          36.3
          Operating expenses:
             Selling expenses.........................      7.5           7.3
             General and administrative expenses......     10.2           8.5
             Provision for doubtful accounts..........      1.0           1.1
             Art and development costs................      4.0           3.3
            Restructuring charges.....................      -             4.9
                                                        -------       -------
                  Total operating expenses............     22.7          25.1
                                                         ------       -------
                  Income from operations..............     13.5          11.2
          Interest expense, net.......................      9.0          11.3
          Other expense (income), net.................      0.1             -
                                                         -------      -------
                  Income (loss) before income taxes
                       and minority interests.........      4.4          (0.1)
          Income tax expense (benefit)................      1.8          (0.1)
          Minority interests..........................        -          (0.1)
                                                         ------      --------
                  Net income..........................      2.6%          0.1%
                                                         ======       =======


         Net  sales for the three  months  ended  June 30,  1999  totaled  $73.2
million  and were  $24.5  million or 50.4%  higher  than net sales for the three
months ended June 30, 1998. The increase in net sales for the three months ended
June 30, 1999  primarily  resulted  from the  inclusion  of net sales of Anagram
International  Inc.  ("Anagram")  which  totaled  approximately  $15.6  million.
Anagram,  a manufacturer and distributor of metallic  balloons,  was acquired in
September 1998. The remaining  increase in net sales was  attributable to strong
sales  growth  in both  the  party  goods  superstores  and  independent  stores
channels,  and to sales growth  principally  resulting from a realignment of the
Company's independent sales force in 1999.

         Gross profit margin for the three month periods ended June 30, 1999 and
1998 remained constant at approximately 36%.

         Selling  expenses of $5.5  million for the three  months ended June 30,
1999 were $2.0 million higher than those of the corresponding period in 1998 and
increased  from 7.3% of net sales to 7.5% of net sales.  The increase in selling
expenses reflect the inclusion of approximately $1.5 million of selling expenses
from  Anagram,  which  historically  operates at a higher  level of expense as a
percentage of sales. The remaining  increase in selling  expenses  resulted from
the  addition  of  several  new  sales  catalogues  and the  realignment  of the
independent sales force in 1999.

         General and  administrative  expenses of $7.5 million increased by $3.3
million  for  the  three   months  ended  June  30,  1999  as  compared  to  the
corresponding period in 1998. General and administrative expenses increased as a
percentage  of net sales to 10.2% in the three  months  ended June 30, 1999 from
8.5% in the  corresponding  period of 1998. The increase  primarily results from
the additional amortization of goodwill and other intangible assets arising
from the  acquisition  of Anagram as well as the  inclusion of Anagram  results,
which  historically  operates at a higher  level of expense as a  percentage  of
sales.



                                       11
<PAGE>





         Provision  for  doubtful  accounts of $0.7 million for the three months
ended June 30, 1999 was $0.2 million  higher than in the three months ended June
30, 1998. The provision for doubtful accounts for both periods approximated 1.0%
of net sales.

         Art and  development  costs of $2.9  million for the three months ended
June 30, 1999, increased by $1.4 million compared to the corresponding period in
1998. As a percentage of net sales, art and development  costs increased to 4.0%
for  the  three  months  ended  June  30,  1999  as  compared  to  3.3%  in  the
corresponding   period  of  1998  and  reflected  the  Company's  investment  in
additional staff associated with the development of new product lines.

         In the  second  quarter of 1998 the  Company  recorded a charge of $2.4
million for the restructuring of its distribution  operations which included the
closure of distribution  facilities in California and Canada.  The restructuring
included the  elimination of  approximately  100 positions and reduced costs and
improved  operating   efficiencies.   The  restructuring   charge  included  the
write-down  of property,  plant and  equipment of $1.3  million,  the accrual of
future lease  obligations  of $0.5 million,  severance and related costs of $0.3
million and other costs of $0.3 million.

     Interest  expense of $6.6  million for the three months ended June 30, 1999
increased  by $1.1  million as  compared  to the  corresponding  period in 1998,
principally as a result of higher  borrowings in connection with the acquisition
of Anagram (see "Liquidity and Capital Resources"),  partially offset by a lower
average variable  interest rate on borrowings  under the Bank Credit  Facilities
(7.5% in 1999 versus 8.6% in 1998).

         Income  taxes for the three  months  ended June 30,  1999 and 1998 were
based upon estimated consolidated effective income tax rates of 40.85% and 41.5%
for the years ending December 31, 1999 and 1998, respectively.



Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Results of Operations
Percentage of Net Sales

                                                       Six Months Ended June 30,
                                                        1999            1998
                                                     ----------      ---------
         Net sales...................................    100.0%        100.0%
         Cost of sales...............................     63.4          64.3
                                                        ------        ------
                 Gross profit........................     36.6          35.7
         Operating expenses:
            Selling expenses.........................      7.6           6.9
            General and administrative expenses......      9.7           8.1
            Provision for doubtful accounts (4.0%
                in 1999 related to Party City).......      4.8           1.3
            Art and development costs................      3.7           3.0
           Restructuring charges.....................        -           2.3
                                                        ------        ------
           Total operating expenses..................     25.8          21.6
                                                        ------        ------
           Income from operations....................     10.8          14.1
         Interest expense, net.......................      8.7          10.3
         Other expense (income), net.................        -          (0.1)
                                                        ------        ------
                 Income before income taxes
                 and minority interests.............       2.1           3.9
         Income tax expense..........................      0.9           1.6
         Minority interests..........................        -           0.1
                                                        ------        ------
                 Net income..........................     1.2%           2.2%
                                                        ======        ======




                                       12
<PAGE>







         Net sales for the six months  ended June 30, 1999 were $149.6  million,
as compared to $104.2  million for the six months ended June 30, 1998. Net sales
for the six months ended June 30, 1999 increased by 43.6%,  primarily  resulting
from the  inclusion of net sales of Anagram which  totaled  approximately  $31.0
million.  The remaining  increase in net sales was attributable to strong growth
in sales to both party goods  superstores and smaller  independent  stores.  The
Company  attributes its sales growth to a realignment of its  independent  sales
force,  and its marketing  strategy of  continually  offering new products,  new
designs and themes for existing products.

         Gross profit for the six months ended June 30, 1999 was $54.8  million,
or 36.6% of net sales,  as compared to $37.2 million or 35.7% for the six months
ended June 30, 1998.  The increase in gross profit margin  principally  reflects
the savings  associated  with the  restructuring  of the Company's  distribution
operations begun in the second quarter of 1998 as well as improved  efficiencies
experienced at the manufacturing levels.

         Selling  expenses of $11.4  million  for the six months  ended June 30,
1999 were $4.2 million  higher than those of the  corresponding  period in 1998.
Selling  expenses  increased  as a  percentage  of net  sales to 7.6% in the six
months  ended  June 30,  1999  from  6.9% in the  corresponding  period of 1998,
principally  due to the  inclusion  of  approximately  $3.2  million  of selling
expenses of Anagram, which historically operates at a higher level of expense as
a percentage of sales. The remaining  increase in selling expenses resulted from
the  addition  of  several  new  sales  catalogues  and the  realignment  of the
independent sales force in 1999.

         General and administrative  expenses of $14.5 million increased by $6.1
million for the six months ended June 30, 1999 as compared to the  corresponding
period in 1998. General and administrative expenses increased as a percentage of
net sales from 8.1% to 9.7%. The increase  primarily results from the additional
amortization  of  goodwill  and  other   intangible   assets  arising  from  the
acquisition  of  Anagram as well as the  inclusion  of  Anagram  results,  which
historically operates at a higher level of expense as a percentage of sales.

         The provision  for doubtful  accounts for the six months ended June 30,
1999 was $7.1 million or $5.8 million higher than in the corresponding period in
1998. During the first quarter of 1999, the Company's  largest  customer,  Party
City Corporation ("Party City") announced that, due to difficulties implementing
new financial reporting and accounting systems, it would not be able to complete
its year end audit and that it would be in default of certain  covenants  of its
credit facility as of December 31, 1998. The Company understands that Party City
is  negotiating  with its  lenders  to amend its  credit  facility  and with its
vendors to amend existing  credit terms on certain  inventory.  The Company also
understands that Party City is considering  various  alternatives to improve its
current financial condition.  Based on Party City's current financial condition,
the Company established reserves approximating 50% of the $13.2 million accounts
receivable  balance  due from  Party  City  corporate  stores at June 30,  1999,
including $6.0 million charged to the provision for doubtful accounts during the
first quarter of 1999.

         Art and development costs of $5.6 million for the six months ended June
30,  1999,  increased by $2.4 million  compared to the  corresponding  period in
1998. As a percentage of net sales, art and development  costs increased to 3.7%
in the six  months  ended June 30,  1999 from 3.0% for the same  period in 1998,
reflecting  the Company's  investment in additional  staff  associated  with the
development of new product lines.

     Interest  expense of $13.0  million for the six months  ended June 30, 1999
increased  by $2.3  million  as  compared  to the  corresponding  period in 1998
principally as a result of higher  borrowings in connection with the acquisition
of Anagram (see "Liquidity and Capital Resources"),  partially offset by a lower
average variable  interest rate on borrowings  under the Bank Credit  Facilities
(7.7% in 1999 versus 8.5% in 1998).

     Income  taxes for the six months  ended  June 30,  1999 and 1998 were based
upon estimated  consolidated  effective income tax rates of 40.85% and 41.5% for
the years ending December 31, 1999 and 1998, respectively.




                                       13
<PAGE>








Liquidity and Capital Resources

         On  December  19,  1997,  the Company and  Confetti  Acquisition,  Inc.
("Confetti")   consummated   a   merger   (the   "Merger"),   providing   for  a
recapitalization  of the Company in which  Confetti was merged with and into the
Company with the Company as the surviving  corporation.  The Merger was financed
with  an  equity   contribution  of  approximately   $67.5  million   (including
contributions  of Company  Common  Stock by certain  employee  stockholders  and
issuances of restricted Common Stock), $117 million from a senior term loan (the
"Term  Loan")  provided  under  a  bank  credit   agreement  (the  "Bank  Credit
Facilities")  and $110 million  from the issuance of 9 7/8% senior  subordinated
notes (the "Notes") (collectively, the "Merger Financings"). The Merger has been
accounted for as a recapitalization  and,  accordingly,  the historical basis of
the Company's assets and liabilities has not been affected.

         The Company is obligated to obtain interest rate  protection,  pursuant
to interest rate swaps,  caps or other similar  arrangements  satisfactory to GS
Credit Partners,  with respect to a notional amount of not less than half of the
aggregate amount  outstanding  under the Term Loan, which protection must remain
in effect  for not less than  three  years.  The  interest  rate swap  contracts
require the Company to settle the difference in interest obligations  quarterly.
The Company had two interest rate swap  contracts  outstanding  with a financial
institution and Goldman Sachs Capital Markets,  L.P. covering $93,500,000 of its
Term Loan at effective  interest  rates  ranging from 7.18% to 8.36% at June 30,
1999.

         In addition to the Term Loan, the Bank Credit  Facilities,  as amended,
provide for  revolving  loan  borrowings  of up to $50 million  (the  "Revolving
Credit  Facility").  The Revolving  Credit Facility has a term of five years and
bears  interest,  at the option of the Company,  at the lenders'  customary base
rate  plus  1.25%  per  annum  or at the  lenders'  customary  reserve  adjusted
Eurodollar rate plus 2.25% 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 June 30, 1999, the Company had borrowing capacity of
approximately $28.4 million under the Revolving Credit Facility.

         The Company financed the September 1998 acquisition of Anagram with $40
million of senior term debt,  approximately $20 million of additional  revolving
credit  borrowings,  cash on hand,  the issuance of 120 shares of the  Company's
redeemable  Common  Stock  valued at $12.6  million and  warrants to purchase 10
shares of the Company's Common Stock valued at $0.2 million.  In connection with
and upon  consummation of the acquisition,  the Company amended and restated the
Revolving  Credit  Facility to provide for,  among other things,  the additional
senior term debt.

         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  Merger  Financings  and the  amendments  to the  Company's  credit
agreements may affect the Company's ability to make future capital expenditures,
and  to  permit  potential  acquisitions.   However,  management  believes  that
additions to plant and equipment  during the past three years  provide  adequate
capacity to support its operations  for at least the next 12 months.  As of June
30,  1999,   the  Company  did  not  have  material   commitments   for  capital
expenditures.


Cash Flow Data - Six Months  Ended June 30, 1999  Compared  to Six Months  Ended
June 30, 1998

         During the six months ended June 30,  1999,  net cash used in operating
activities  totaled $0.2 million,  as compared to net cash provided by operating
activities  totaling $6.1 million in the  corresponding  period of 1998. The net
cash used in operating  activities in 1999 reflects an increase in the Company's
net  accounts  receivable



                                       14
<PAGE>






balance,  as a result  of higher  sales in  addition  to  increased  sales  with
extended terms. The increase in net accounts  receivable was partially offset by
the changes in other operating assets and liabilities.

         Net cash used in investing  activities during the six months ended June
30, 1999 of $6.1 million increased by $3.7 million from the corresponding period
in 1998,  principally  reflecting  an upgrade of the Company's  data  processing
systems,  investment in additional manufacturing equipment, and inclusion of the
capital expenditures of Anagram for the six months ended June 30, 1999.

         During  the six  months  ended  June 30,  1999,  net cash  provided  by
financing activities of $5.7 million principally  consisted of the proceeds from
short-term  working  capital  borrowings,  partially  offset  by  the  scheduled
maturity of long-term  obligations.  During the  comparable  period in 1998, net
cash used in financing  activities  of $94.8  million  principally  consisted of
payments to former  shareholders  whose  investment in Company  Common Stock was
converted  into the right to receive cash in connection  with the Merger and the
scheduled  repayment of debt offset by the net proceeds received from short-term
borrowings  and the  issuance of Common  Stock to  employees as well as payments
received applicable to notes receivable from officers


Recently Issued Accounting Standards

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard No. 133,  Accounting for Derivative
Instruments  and Hedging  Activities  ("SFAS No. 133").  SFAS No. 133 provides a
comprehensive  and consistent  standard for the  recognition  and measurement of
derivatives and hedging activities. The statement requires all derivatives to be
recognized on the balance sheet at fair value and establishes  standards for the
recognition of changes in such fair value.  SFAS No. 133 is effective for fiscal
years  beginning  after June 15, 2000. The Company expects to adopt SFAS No. 133
effective January 1, 2001.  Because of the Company's limited use of derivatives,
management  does  not  anticipate  the  adoption  of SFAS No.  133  will  have a
significant effect on earnings or the financial position of the Company.

         Other  pronouncements   issued  by  the  FASB  or  other  authoritative
accounting   standards  groups  with  future  effective  dates  are  either  not
applicable or not significant to the financial statements of the Company.


Impact of Year 2000

         The  Company   conducted  an   assessment   of  computer   systems  and
manufacturing  and  distribution  systems to identify  potential  problems  with
processing of dates beyond 1999. That assessment indicated that the software and
hardware (embedded chips) used in manufacturing and distribution  systems do not
require  remediation  to be Year  2000  compliant.  In July  1999,  the  Company
completed  upgrades to its principal  business systems that were  date-sensitive
and that are now Year 2000  compliant.  To date,  the Company  has not  incurred
significant  expenses associated with the Year 2000 issue and management expects
that the historical and anticipated remaining costs to upgrade its software will
not be material.

         The Company is in the process of querying its significant suppliers and
subcontractors  that do not share information systems with the Company (external
agents).  To date,  the Company is not aware of any  external  agent with a Year
2000 issue that would  materially  impact the Company's  results of  operations,
liquidity,  or capital resources.  However, the Company has no means of ensuring
that external  agents will be Year 2000 ready.  The inability of external agents
to  complete  their  Year 2000  resolution  process  in a timely  fashion  could
materially  impact the Company.  The effect of non-compliance by external agents
is not determinable.

         The  Company is  currently  working on  contingency  plans for  certain
critical  applications.  These contingency plans are expected to be completed by
September 1999 and involve, among other actions, manual workarounds,  increasing
inventories, and adjusting staffing strategies.

         To date,  the Company is 90% complete  and believes  that the Year 2000
issue will not pose significant  operational  problems for its computer systems.
However,  there can be no guarantee that the estimated cost and completion  will
be  achieved  and  the  actual  results  could  differ   materially  from  those
anticipated.



                                       15
<PAGE>





"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,  the impact of the Year 2000 issue,
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 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) the  introduction of new products by the Company's  competitors,
(5) the  inability  of the Company to increase  prices to recover  fully  future
increases in raw material prices,  especially increases in paper prices, (6) the
loss of key employees,  (7) changes in general  business  conditions,  (8) other
factors which might be described from time to time in the Company's filings with
the  Commission,  and (9) 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 and other  off-balance  sheet financial
instruments 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 six months ended
June 30, 1999, the Company's interest expense,  after considering the effects of
its interest rate swap agreements, would increase, and income before taxes would
decrease by $0.8 million. This amount is 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 $0.5 million
for the six months  ended



                                       16
<PAGE>






June 30,  1999.  This  calculation  assumes  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 are a changed
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.



                                     Part II


Item 6.     Exhibits and Reports on Form 8-K


         (a)      Exhibits

                    Exhibit
                    Number                           Description
                    ------                           -----------


                      27                             Financial Data Schedule

         (b)      Reports on Form 8 - K

                    None.




                                       17
<PAGE>





                                    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
                                                  Controller
                                                  (on behalf of the registrant
                                                  and as principal accounting
Date: August 13, 1999                             officer)
      ---------------





                                       18