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 September 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                 (I.R.S. Employer Identification
 of 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 November 10, 1999, 1,132.41 shares of Registrants' Common Stock, par value
$0.10, were outstanding.



<PAGE>


                              AMSCAN HOLDINGS, INC.
                                    FORM 10-Q

                               September 30, 1999

                                Table of Contents



                                       Part I                               Page

 Item 1   Financial Statements  (Unaudited)

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

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

          Consolidated Statement of Stockholders' Deficit for the Nine
          Months Ended September 30, 1999....................................  5

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

          Notes to Consolidated Financial Statements.........................  8

 Item 2   Management's Discussion and Analysis of Financial Condition
          and Results of Operations.......................................... 13

 Item 3   Quantitative and Qualitative Disclosures About Market Risk ........ 18


                                   Part II


Item 6    Exhibits and Reports on Form 8-K................................... 19


Signature ................................................................... 20




                                  2
<PAGE>

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

<CAPTION>
                                                                                September 30,  December 31,
                                                                                    1999           1998
                                                                                -------------  ------------
                                                                                 (Unaudited)      (Note)

                                     ASSETS
                                     ------
<S>                                                                              <C>            <C>
Current assets:
   Cash and cash equivalents ...............................................     $     558      $   1,117
   Accounts receivable, net of allowances ..................................        56,012         49,339
   Inventories, net of allowances ..........................................        62,174         54,691
   Prepaid expenses and other current assets ...............................        17,054          9,113
                                                                                 ---------      ---------
        Total current assets ...............................................       135,798        114,260
Property, plant and equipment, net .........................................        61,323         59,260
Intangible assets, net .....................................................        64,356         66,500
Other assets, net ..........................................................        10,570          8,832
                                                                                 ---------      ---------

        Total assets .......................................................     $ 272,047      $ 248,852
                                                                                 =========      =========

                        LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' DEFICIT
                        --------------------------------------------------------------
Current liabilities:
   Short-term obligations ..................................................     $  14,295      $   9,628
   Accounts payable ........................................................        20,080         11,494
   Accrued expenses ........................................................        20,086         17,520
   Income taxes payable ....................................................         1,621            593
   Current portion of long-term obligations ................................         3,564          3,549
                                                                                 ---------      ---------
        Total current liabilities ..........................................        59,646         42,784
Long-term obligations, excluding current portion ...........................       267,847        270,127
Deferred income tax liabilities ............................................        11,579          8,128
Other ......................................................................         3,126          3,553
                                                                                 ---------      ---------
        Total liabilities ..................................................       342,198        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 ..........................          (447)          (575)
   Notes receivable from stockholders ......................................          (650)          (718)
   Deficit .................................................................       (88,035)       (92,969)
   Accumulated other comprehensive loss ....................................          (791)        (1,250)
                                                                                 ---------      ---------
        Total stockholders' deficit ........................................       (89,698)       (95,287)
                                                                                 ---------      ---------

        Total liabilities, redeemable Common Stock and stockholders' deficit     $ 272,047      $ 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>
                                     AMSCAN HOLDINGS, INC.
                               CONSOLIDATED STATEMENTS OF INCOME
                                    (Dollars in thousands)
                                          (Unaudited)


<CAPTION>
                                                      Three Months Ended        Nine Months Ended
                                                         September 30,            September 30,
                                                         -------------            -------------
                                                       1999         1998        1999         1998
                                                       ----         ----        ----         ----

<S>                                                <C>          <C>          <C>          <C>
Net sales ......................................   $  74,853    $  62,252    $ 224,496    $ 166,499
Cost of sales ..................................      47,486       39,548      142,301      106,560
                                                   ---------    ---------    ---------    ---------
        Gross profit ...........................      27,367       22,704       82,195       59,939

Operating expenses:
  Selling expenses .............................       6,321        4,373       18,018       11,532
  General and administrative expenses ..........       7,697        4,793       22,224       13,261
  (Reduction of) provision for doubtful accounts        (858)         504        6,263        1,807
  Art and development costs ....................       2,406        1,784        7,679        5,000
  Restructuring charges ........................        --           --           --          2,400
                                                   ---------    ---------    ---------    ---------

     Total operating expenses ..................      15,566       11,454       54,184       34,000
                                                   ---------    ---------    ---------    ---------
         Income from operations ................      11,801       11,250       28,011       25,939

Interest expense, net ..........................       6,637        5,440       19,675       16,203
Other income, net ..............................         (78)         (22)         (13)         (81)
                                                   ---------    ---------    ---------    ---------
         Income before income taxes and
           minority interests ..................       5,242        5,832        8,349        9,817

Income tax expense .............................       2,142        2,420        3,411        4,074
Minority interests .............................          10          (13)           4           17
                                                   ---------    ---------    ---------    ---------
         Net income ............................   $   3,090    $   3,425    $   4,934    $   5,726
                                                   =========    =========    =========    =========
</TABLE>




                    See accompanying notes to consolidated financial statements.


                                  4
<PAGE>


<TABLE>
                                                 AMSCAN HOLDINGS, INC.
                                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                         Nine Months Ended September 30, 1999
                                                (Dollars in thousands)
                                                       (Unaudited)


<CAPTION>
                                                                  Unamortized
                                                                   Restricted      Notes                  Accumulated
                                                     Additional     Common       Receivable                  Other
                                         Common        Paid-in    Stock Award,      from                  Comprehensive
                                          Stock        Capital        Net       Stockholders   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 .......................        --           --           --            --           4,934          --           4,934
  Net change in cumulative
     translation adjustment ........        --           --           --            --            --             459           459
                                                                                                                          --------
        Comprehensive income .......        --           --           --            --            --            --           5,393

  Payments received on  notes
     receivable ....................        --           --           --              68          --            --              68
  Amortization of restricted
     Common Stock award ............        --           --            128          --            --            --             128
                                         -------     --------     --------      --------      --------      --------      --------

Balance at September 30, 1999 ......     $  --       $    225     $   (447)     $   (650)     $(88,035)     $   (791)     $(89,698)
                                         =======     ========     ========      ========      ========      ========      ========
</TABLE>






                    See accompanying notes to consolidated financial statements.


                                  5
<PAGE>


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

<CAPTION>
                                                                            Nine Months Ended September 30,
                                                                            -------------------------------
                                                                                  1999           1998
                                                                                  ----           ----
<S>                                                                            <C>            <C>
Cash flows from operating activities:
   Net income ............................................................     $   4,934      $   5,726
   Adjustments to reconcile net income to net cash provided  by
      operating activities:
      Depreciation and amortization ......................................         9,888          5,319
      Amortization of deferred financing costs ...........................           653            522
      Amortization of restricted Common Stock award ......................           128            195
      Provision for doubtful accounts ....................................         6,263          1,807
      Restructuring charges ..............................................          --            2,400
      Deferred income tax expense ........................................         1,845          1,719
      Loss (gain) on disposal of property and equipment ..................            69             (8)
      Changes in operating assets and liabilities:
          Increase in accounts receivable ................................       (18,244)       (10,464)
          (Increase) decrease in inventories .............................        (7,611)         7,018
          (Increase) decrease in prepaid expenses and other current assets        (1,050)           818
          Increase (decrease) in accounts payable, accrued expenses and
          income taxes payable ...........................................        12,120         (2,222)
      Other, net .........................................................        (2,972)          (263)
                                                                               ---------      ---------
         Net cash provided by operating activities .......................         6,023         12,567

Cash flows from investing activities:
   Cash paid for acquisitions ............................................          --          (78,546)
   Capital expenditures ..................................................        (9,068)        (4,259)
   Proceeds from sale of property and equipment ..........................           172             89
                                                                               ---------      ---------
         Net cash used in investing activities ...........................        (8,896)       (82,716)

Cash flows from financing activities:
   Payments to acquire Common Stock in Merger ............................           (29)       (93,147)
   Net proceeds from issuance of Common Stock ............................          --              181
   Proceeds from short-term obligations ..................................         4,695         59,766
   Repayment of loans, notes payable and long-term obligations ...........        (2,935)        (6,355)
   Other .................................................................            68             42
                                                                               ---------      ---------
         Net cash provided by (used in) financing activities .............         1,799        (39,513)

Effect of exchange rate changes on cash and cash equivalents .............           515           (468)
                                                                               ---------      ---------
         Net decrease in cash and cash equivalents .......................          (559)      (110,130)
Cash and cash equivalents at beginning of period .........................         1,117        111,539
                                                                               ---------      ---------
Cash and cash equivalents at end of period ...............................     $     558      $   1,409
                                                                               =========      =========

Supplemental Disclosures:
         Interest paid ...................................................     $  15,748      $  13,884
         Taxes paid, net of refunds ......................................     $     502      $   2,903
</TABLE>



                    See accompanying notes to consolidated financial statements.


                                  6
<PAGE>


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


Supplemental information on noncash activities:

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

     In  connection  with the  acquisition  of Anagram  International,  Inc. and
certain  related  companies in September  1998, the Company issued 120 shares of
Redeemable  Common  Stock  valued at $12,600 and issued  warrants to purchase 10
shares of the  Company's  Common  Stock for $125 per share valued at $225 to the
former owner of Anagram International, Inc.


















           See accompanying notes to consolidated financial statements


                                       7
<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.  AHI designs,  manufactures,  contracts for manufacture and
distributes party and novelty goods principally in the United States, Canada and
Europe.


NOTE 2:  BASIS OF PRESENTATION

          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  nine-month  periods ended
September  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):

                                                      September 30, December 31,
                                                           1999         1998
                                                         --------     --------

 Finished goods ......................................   $ 53,418     $ 48,093
   Raw materials .....................................      5,841        4,845
   Work-in-process ...................................      4,946        3,345
                                                         --------     --------
                                                           64,205       56,283
 Less:  reserve for slow moving and obsolete inventory     (2,031)      (1,592)
                                                         --------     --------
                                                         $ 62,174     $ 54,691
                                                         ========     ========

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



                                       8
<PAGE>


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


NOTE 4:  INCOME TAXES

          The  consolidated  income  tax  expense  for the three and  nine-month
periods ended September 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

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

                                    Three Months Ended       Nine Months Ended
                                      September 30,            September 30,
                                    -------------------     -------------------
                                     1999        1998        1999         1998
                                    -------     -------     -------     -------

Net income ....................     $ 3,090     $ 3,425     $ 4,934     $ 5,726
Net change in cumulative
  translation adjustment ......         428         144         459        (401)
                                    -------     -------     -------     -------
Comprehensive income ..........     $ 3,518     $ 3,569     $ 5,393     $ 5,325
                                    =======     =======     =======     =======

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


NOTE 6:  CAPITAL STOCK

          At  September  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.



                                       9
<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 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 September 30, 1999
     Sales to unaffiliated customers .......     $  61,548     $  13,305           --        $  74,853
     Sales between geographic areas ........         6,336          --        $  (6,336)          --
                                                 ---------     ---------      ---------      ---------
     Net sales .............................     $  67,884     $  13,305      $  (6,336)     $  74,853
                                                 =========     =========      =========      =========

     Income from operations ................     $   9,876     $   1,925           --        $  11,801
                                                 =========      =========
     Interest expense, net .................          --            --             --            6,637
     Other income, net .....................          --            --             --              (78)
                                                                                             ---------
     Income before income taxes and minority
       interests ...........................          --            --             --        $   5,242
                                                                                             =========

     Long-lived assets at September 30, 1999     $ 137,835     $   9,291      $ (10,877)     $ 136,249
                                                 =========     =========      =========      =========

     Three Months Ended September 30, 1998
     Sales to unaffiliated customers .......     $  54,051     $   8,201           --        $  62,252
     Sales between geographic areas ........         3,593          --        $  (3,593)          --
                                                 ---------     ---------      ---------      ---------
     Net sales .............................     $  57,644     $   8,201      $  (3,593)     $  62,252
                                                 =========     =========      =========      =========

     Income from operations ................     $  11,784     $    (534)          --        $  11,250
                                                 =========     =========
     Interest expense, net .................          --            --             --            5,440
     Other income, net .....................          --            --             --              (22)
                                                                                             ---------
     Income before income taxes and minority
       interests ...........................          --            --             --        $   5,832
                                                                                             =========
</TABLE>



                                       10
<PAGE>


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


<TABLE>
<CAPTION>
                                                 Domestic      Foreign     Eliminations   Consolidated
                                                 --------      -------     ------------   ------------
    <S>                                         <C>           <C>           <C>            <C>
    Nine Months Ended September 30, 1999
    Sales to unaffiliated customers .......     $ 191,351     $  33,145          --        $ 224,496
    Sales between geographic areas ........        16,462          --       $ (16,462)          --
                                                ---------     ---------     ---------      ---------
    Net sales .............................     $ 207,813     $  33,145     $ (16,462)     $ 224,496
                                                =========     =========     =========      =========

    Income from operations ................     $  26,011     $   2,000          --        $  28,011
                                                =========     =========
    Interest expense, net .................          --            --            --           19,675
    Other income, net .....................          --            --            --              (13)
                                                                                           ---------
    Income before income taxes and minority
      interests ...........................          --            --            --        $   8,349
                                                                                           =========


    Nine Months Ended September 30, 1998
    Sales to unaffiliated customers .......     $ 146,404     $  20,095          --        $ 166,499
    Sales between geographic areas ........         7,782          --       $  (7,782)          --
                                                ---------     ---------     ---------      ---------
    Net sales .............................     $ 154,186     $  20,095     $  (7,782)     $ 166,499
                                                =========     =========     =========      =========

    Income from operations ................     $  25,809     $     130          --        $  25,939
                                                =========     =========
    Interest expense, net .................          --            --            --           16,203
    Other income, net .....................          --            --            --              (81)
                                                                                           ---------
    Income before income taxes and minority
      interests ...........................          --            --            --        $   9,817
                                                                                           =========
</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.  On August 17, 1999,  Party City received $30
million in new  financing  from a group of  investors.  Concurrent  with the new
financing,  Party City entered into an agreement  with its existing bank lenders
whereby the bank lenders agreed not to exercise certain rights or remedies until
June 30, 2000 based upon existing  defaults,  unless an event of default occurs.
Party City also  entered  into an agreement  with its trade  vendors,  including
Amscan,  whereby, among other things, the vendors have received promissory notes
due November 15, 1999 for one-third of their then existing  accounts  receivable
balances.  The Company has reclassified $5.3 million from accounts receivable to
prepaid  expenses and other current assets at September 30, 1999 upon receipt of
this promissory  note.  Additionally,  the trade vendors have extended credit to
Party City with  respect to its  Halloween  and holiday  purchases  in an amount
equal  to 30% of  those  purchases.  The  remaining  70% will be paid in cash in
advance.  The vendors who have  extended  credit have  received a shared lien on
Party City's inventory for the amount of the credit  extended.  At September 30,
1999,  the  Company  continues  to  maintain a related  allowance  for  doubtful
accounts and sales allowances which approximate one half of the account and note
receivable  balance of $15.8  million due from Party City,  including $4 million
charged to the  provision  for  doubtful  accounts  during the nine months ended
September  30, 1999.  The  decrease in the  provision  during the third  quarter
reflected a reduction of  approximately  $1.9 million to the provision for Party
City, partially offset by a $1.0 million provision for other doubtful accounts.

          For the nine months ended September 30, 1999 and 1998,  sales to Party
City's corporate stores represented 11% and 12%,  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.


                                       11
<PAGE>


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



NOTE 9:  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 upon its financial condition or results of operations.


















                                       12
<PAGE>


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

THREE MONTHS ENDED  SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 1998

Results of Operations
---------------------
Percentage of Net Sales
-----------------------

                                               Three Months Ended September 30,
                                                       1999      1998
                                                      ------    ------
           Net sales ............................     100.0%    100.0%
           Cost of sales ........................      63.4      63.5
                                                      ------    ------
                   Gross profit .................      36.6      36.5
           Operating expenses:
              Selling expenses ..................       8.4       7.0
              General and administrative expenses      10.3       7.7
              (Reduction of) provision for
                  doubtful accounts .............      (1.1)      0.8
              Art and development costs .........       3.2       2.9
                                                      ------    ------
            Total operating expenses ............      20.8      18.4
                                                      ------    ------
                   Income from operations .......      15.8      18.1
           Interest expense, net ................       8.9       8.7
           Other income, net ....................      (0.1)      --
                                                      ------    ------
                   Income before income taxes
                        and minority interests ..       7.0       9.4
           Income tax expense ...................       2.9       3.9
           Minority interests ...................       --        --
                                                      ------    ------
                   Net income ...................       4.1%      5.5%
                                                      ======    ======


          Net sales for the third quarter of 1999 totaled $74.9 million and were
$12.6 million or 20.2% higher than net sales for the third quarter of 1998.  The
increase in sales includes approximately $11.5 million of incremental sales from
Anagram International,  Inc. ("Anagram"), which was acquired in mid September of
1998,  as well as  increased  sales  to  independent  party  goods  stores.  The
increased  sales  to  independent  party  goods  stores  are  attributable  to a
realignment of the Company's  independent sales force in 1999 in connection with
the introduction of its new gift lines.

          Gross  profit  for  the  third  quarter  of  1999  was  36.6%  and was
comparable to that of the corresponding quarter of 1998.

          Selling  expenses of $6.3  million for the third  quarter of 1999 were
$1.9 million higher than those of the corresponding period in 1998 and increased
from 7.0% of net sales to 8.4% of net sales.  The  increase in selling  expenses
reflect the  inclusion  of  approximately  $1.3 million of  incremental  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 previously  mentioned
realignment of the independent sales force in 1999.

          General and administrative  expenses of $7.7 million increased by $2.9
million for the third quarter of 1999 as compared to the corresponding period in
1998. General and administrative expenses increased as a percentage of net sales
to 10.3% in the third quarter of 1999 from 7.7% in the  corresponding  period of
1998.  The  increase  results  primarily  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.


                                       13
<PAGE>


          During the third  quarter of 1999,  the Company  reduced the provision
for doubtful accounts by $0.9 million, or 1.1% of net sales, reflecting the $1.9
million  reduction of the provision for Party City,  partially  offset by a $1.0
million  provision  for other  doubtful  accounts.  At September  30, 1999,  the
Company  continues to maintain a related  allowance  for  doubtful  accounts and
sales allowances  which  approximate one half of the account and note receivable
balance due from Party City.

          Art and  development  costs of $2.4  million for the third  quarter of
1999, increased by $0.6 million compared to the corresponding period in 1998. As
a percentage  of net sales,  art and  development  costs were 3.2% for the third
quarter of 1999 as compared to 2.9% for the  corresponding  period of 1998.  The
percentage  increase reflects the Company's  continued  investment in additional
staff associated with the development of new product lines.

          Interest  expense  of $6.6  million  for  the  third  quarter  of 1999
increased  by $1.2  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
(7.73% in 1999 versus 8.43% in 1998).

          Income  taxes for the third  quarter  of 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.


NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998

Results of Operations
---------------------
Percentage of Net Sales
-----------------------

                                                Nine Months Ended September 30,
                                                        1999     1998
                                                       ------   ------
            Net sales ............................     100.0%   100.0%
            Cost of sales ........................      63.4     64.0
                                                       ------   ------
                    Gross profit .................      36.6     36.0
            Operating expenses:
               Selling expenses ..................       8.0      6.9
               General and administrative expenses       9.9      8.0
               Provision for doubtful accounts ...       2.8      1.1
               Art and development costs .........       3.4      3.0
               Restructuring charges .............       --       1.4
                                                       ------   ------
              Total operating expenses ...........      24.1     20.4
                                                       ------   ------
              Income from operations .............      12.5     15.6
            Interest expense, net ................       8.8      9.7
            Other income, net ....................       --       --
                                                       ------   ------
                    Income before income taxes
                         and minority interests ..       3.7      5.9
            Income tax expense ...................       1.5      2.5
            Minority interests ...................       --       --
                                                       ------   ------
                    Net income ...................       2.2%     3.4%
                                                       ======   ======


          Net sales for the nine  months  ended  September  30, 1999 were $224.5
million,  as compared to $166.5 million for the nine months ended  September 30,
1998. Net sales for the nine months ended September 30, 1999 increased by 34.8%,
primarily  resulting from the inclusion of the  incremental net sales of Anagram
which totaled  approximately $42.5 million.  The remaining increase in net sales
was  attributable to strong growth in sales to both party goods  superstores and
smaller independent party goods stores. The Company attributes its current sales
growth



                                       14
<PAGE>


to a realignment of its independent sales force in 1999 as well as its marketing
strategy  of  continually  offering  new  products,  new  designs and themes for
existing products.

          Gross  profit for the nine months ended  September  30, 1999 was $82.2
million,  or 36.6% of net sales,  as compared to $59.9  million or 36.0% for the
nine months  ended  September  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
the  addition of the  incremental  Anagram  sales which  generate  higher  gross
margins.

          Selling  expenses of $18.0 million for the nine months ended September
30,  1999 were $6.5  million  higher than those of the  corresponding  period in
1998.  Selling  expenses  increased as a percentage  of net sales to 8.0% in the
nine months ended  September 30, 1999 from 6.9% in the  corresponding  period of
1998,  principally  due  to the  inclusion  of  approximately  $5.0  million  of
incremental 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 $22.2  million for the nine
months  ended  September  30, 1999  increased by $9.0 million as compared to the
corresponding period in 1998. General and administrative expenses increased as a
percentage of net sales to 9.9% from 8.0%. 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  nine  months  ended
September  30,  1999  was  $6.3  million  or  $4.5  million  higher  than in the
corresponding  period in 1998 and includes a $4.0 million charge for Party City,
its largest  customer.  During the first quarter of 1999, the Company's  largest
customer,  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.  On August 17,  1999,  Party City  received $30 million in new
financing from a group of investors.  Concurrent  with the new financing,  Party
City entered into an agreement  with its existing bank lenders  whereby the bank
lenders  agreed not to exercise  certain  rights or remedies until June 30, 2000
based upon existing defaults, unless an event of default occurs. Party City also
entered into an agreement with its trade  vendors,  including  Amscan,  whereby,
among other things, the vendors have received  promissory notes due November 15,
1999 for  one-third of their then existing  accounts  receivable  balances.  The
Company has  reclassified  $5.3  million  from  accounts  receivable  to prepaid
expenses and other  current  assets at  September  30, 1999 upon receipt of this
promissory note.  Additionally,  the trade vendors have extended credit to Party
City with respect to its Halloween  and holiday  purchases in an amount equal to
30% of those purchases.  The remaining 70% will be paid in cash in advance.  The
vendors who have  extended  credit have  received a shared lien on Party  City's
inventory  for the amount of the credit  extended.  At September  30, 1999,  the
Company  continues to maintain a related  allowance  for  doubtful  accounts and
sales allowances  which  approximate one half of the account and note receivable
balance of $15.8 million due from Party City,  including the $4 million  charged
to the provision for doubtful  accounts  during the nine months ended  September
30, 1999. The decrease in the provision for doubtful  accounts  during the third
quarter reflected a reduction of approximately $1.9 million to the provision for
Party City,  partially  offset by a $1.0 million  provision  for other  doubtful
accounts.

          Art and  development  costs of $7.7  million for the nine months ended
September  30, 1999,  increased by $2.7  million  compared to the  corresponding
period in 1998. As a percentage  of net sales,  art and  development  costs were
3.4% for the third  quarter of 1999 as  compared  to 3.0% for the  corresponding
period  of 1998.  The  percentage  increase  reflects  the  Company's  continued
investment in additional  staff  associated  with the development of new product
lines  partially  offset  by a  reclassification  of  certain  Anagram  expenses
incurred  in the first  half of 1999 from art and  development  costs to selling
expense.

          Interest  expense of $19.7 million for the nine months ended September
30, 1999  increased by $3.5 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 (7.70% in 1999 versus 8.51% in 1998).



                                       15
<PAGE>


          Income  taxes for the nine months  ended  September  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.


LIQUIDITY AND CAPITAL RESOURCES

          In connection  with the Company's  recapitalization  in December 1997,
the Company  received  approximately  $67.5  million  from  contributed  capital
(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").

          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,  expiring December 31, 2002,
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 September 30, 1999, the Company had borrowing capacity
of approximately $30.6 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.

          At  September  30,  1999,  the  Company had three  interest  rate swap
contracts  outstanding  with a financial  institution  and Goldman Sachs Capital
Markets,  L.P.  covering  $123.5 million of its Term Loan at effective  interest
rates ranging from 7.18% to 8.80%.

          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  potential  acquisitions.  However,  management  believes that current asset
levels provide adequate capacity to support its operations for at least the next
12  months.  As of  September  30,  1999,  the  Company  did not  have  material
commitments for capital expenditures.

Cash Flow Data - Nine Months Ended  September  30, 1999  Compared to Nine Months
--------------------------------------------------------------------------------
Ended September 30, 1998
------------------------

          During the nine months ended  September 30, 1999, net cash provided by
operating activities totaled $6.0 million, or $6.5 million lower than during the
corresponding  period of 1998.  In addition to the $0.8 million  decrease in net
income,  the lower  cash flow  from  operations  reflected  an  increase  in the
Company's  net  accounts  receivable  balance,  as a result of higher  sales and
increased  sales with  extended  terms and  higher  levels of  inventory  as the


                                       16
<PAGE>


Company  prepares  for  the  introduction  of new  product  lines  and  for  the
Millennium,  partially  offset by an  increase  in trade  accounts  payable  and
accrued liabilities.

          Net cash used in  investing  activities  during the nine months  ended
September  30,  1999 of $8.9  million  principally  reflected  an upgrade of the
Company's  data  processing  systems,  investment  in  additional  manufacturing
equipment,  and  inclusion of the capital  expenditures  of Anagram for the nine
months ended  September 30, 1999. Net cash used in investing  activities  during
the nine months ended September 30, 1998 totaled $82.7 million and was comprised
of $78.5 million of cash paid for the  acquisitions of Anagram and the remaining
25%  interest in the  Company's  U.K.  based  subsidiary,  and $4.3  million for
capital expenditures.

          During the nine months ended  September 30, 1999, net cash provided by
financing activities of $1.8 million principally  consisted of the proceeds from
short-term  working  capital  borrowings,  partially  offset  by  the  scheduled
maturity of long-term  obligations.  During the nine months ended  September 30,
1998,  net cash used in  financing  activities  of $39.5  million  consisted  of
payments of $93.1  million to former  shareholders  whose  investment in Company
Common Stock was converted into the right to receive cash in connection with the
merger in December  of 1997 and the  scheduled  repayment  of debt offset by net
proceeds of $59.2 million from  additional  borrowings  in  connection  with the
acquisition  of  Anagram,   proceeds  of  $0.6  million  from  other  short-term
borrowings, and the issuance of Common Stock to employees.

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 upon its financial condition or results of operations.


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.  The  Company  has  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 has queried 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



                                       17
<PAGE>

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 has  developed  contingency  plans for  certain  critical
applications which involve, among other actions, manual workarounds,  increasing
inventories, and adjusting staffing strategies.

          To date,  the Company is 95% 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.


"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 nine months ended
September 30, 1999,  the  Company's  interest  expense,  after  considering  the
effects of its interest rate swap agreements,  would increase, and income before
income  taxes would  decrease by $1.1  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


                                       18
<PAGE>


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 $1.1 million
for the nine months ended September 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.



                                       19
<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
Date: November 10, 1999               principal accounting officer)
     ----------------------






                                       20