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


                                 F O R M 10 - Q



[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
    ACT OF 1934 For the Quarterly Period Ended March 31, 1998


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

For the transition period from                      to 
                               --------------------    --------------------

Commission file number       000-21827
                       ---------------------

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

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


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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


       Yes    X            No 
           ------             ------


As of May 12, 1998, 1,010 shares of Registrants'  Common Stock, par value $0.10,
were outstanding.



                                       1
<PAGE>




                              AMSCAN HOLDINGS, INC.
                                    FORM 10-Q

                                 MARCH 31, 1998

                                TABLE OF CONTENTS



                                   PART I                                  PAGE

ITEM 1  FINANCIAL STATEMENTS  (UNAUDITED)

        Consolidated Balance Sheets at March 31, 1998 and
        December 31, 1997..................................................  3

        Consolidated Statements of Income for the Three Months
        Ended March 31, 1998 and 1997......................................  4

        Consolidated Statement of Stockholders' Deficit for the
        Three Months Ended March 31, 1998..................................  5

        Consolidated Statements of Cash Flows for the Three Months
        Ended March 31, 1998 and 1997......................................  6

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

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS.......................................... 10

ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........ 13


                                     PART II


ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K................................... 13


SIGNATURE.................................................................. 15



                                       2
<PAGE>






                              AMSCAN HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   MARCH 31,     DECEMBER 31,
                                                                     1998            1997
                                                                 ------------   --------------
                                                                  (Unaudited)       (Note)
                                     ASSETS
Current assets:
<S>                                                                  <C>          <C>      
   Cash and cash equivalents..................................       $15,140      $ 111,539
   Accounts receivable, net of allowances ....................        53,988         44,838
   Inventories................................................        46,803         51,742
   Prepaid expenses and other current assets..................         7,576          8,073
                                                                 -----------      ---------
     Total current assets.....................................       123,507        216,192
Property, plant and equipment, net............................        38,337         38,860
Intangible assets, net........................................         7,681          7,762
Other assets, net  ...........................................         7,264          6,462
                                                                 -----------    -----------

     Total assets.............................................      $176,789       $269,276
                                                                    ========       ========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Notes payable..............................................    $      111       $    424
   Due to stockholders........................................           512         93,243
   Accounts payable...........................................         8,016         12,152
   Accrued expenses...........................................        12,009         10,502
   Income taxes payable.......................................         1,547            167
   Current portion of long-term obligations...................         2,912          2,911
                                                                  ----------      ---------
     Total current liabilities................................        25,107        119,399
Long-term obligations, excluding current portion..............       233,620        234,422
Deferred tax liabilities......................................         7,224          6,893
Other.........................................................         3,736          3,781
                                                                  ----------     ----------
     Total liabilities........................................       269,687        364,495

Stockholders' deficit:
   Common Stock...............................................             -              -
   Unamortized restricted Common Stock award, net.............          (770)          (835)
   Notes receivable from officers.............................          (750)          (750)
   Accumulated Deficit........................................       (90,641)       (92,912)
   Accumulated other comprehensive income.....................          (737)          (722)
                                                                 -----------   -------------
     Total stockholders' deficit..............................       (92,898)       (95,219)
                                                                   ---------    -----------

     Total liabilities and stockholders' deficit..............      $176,789       $269,276
                                                                    ========       ========
</TABLE>

Note:  The balance  sheet at December 31, 1997 has been derived from the audited
consolidated financial statements at that date.


          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>




                              AMSCAN HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                          THREE MONTHS ENDED MARCH 31,
                                                                          ----------------------------
                                                                          
                                                                              1998            1997
                                                                          -----------      ---------
<S>                                                                         <C>             <C>    
Net sales...............................................................    $55,561         $53,176
Cost of sales...........................................................     35,989          34,410
                                                                            -------         -------
      Gross profit......................................................     19,572          18,766

Operating expenses:
   Selling expenses.....................................................      3,626           3,099
   General and administrative expenses..................................      5,091           4,364
   Art and development costs............................................      1,620           1,274
                                                                           --------         -------
      Total operating expenses..........................................     10,337           8,737
                                                                            -------         -------
      Income from operations............................................      9,235          10,029

Interest expense, net...................................................      5,265             984
Other income, net.......................................................        (40)            (27)
                                                                          ----------       --------
      Income before income taxes and minority interests.................      4,010           9,072

Income tax expense......................................................      1,664           3,728
Minority interests......................................................         75              42
                                                                          ---------        --------
      Net income........................................................    $ 2,271        $  5,302
                                                                            =======        ========
</TABLE>




          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>




                              AMSCAN HOLDINGS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                    FOR THE THREE MONTHS ENDED MARCH 31, 1998
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                           UNAMORTIZED
                                                            RESTRICTED        NOTES                     ACCUMULATED
                                                              COMMON       RECEIVABLE                      OTHER
                                                 COMMON    STOCK AWARD,       FROM       ACCUMULATED   COMPREHENSIVE
                                                 STOCK         NET          OFFICERS       DEFICIT         INCOME        TOTAL
                                                 ------    -----------     ----------    -----------   -------------   ---------
<S>                                              <C>       <C>             <C>           <C>           <C>             <C>      
Balance as of December 31, 1997...........       $    -    $     (835)     $    (750)    $  (92,912)   $       (722)   $(95,219)

Net income................................                                                    2,271                       2,271

Net change in foreign currency
  translation adjustment..................                                                                      (15)        (15)

Amortization of restricted
  Common Stock award......................                         65                                                        65
                                                 ------    -----------     ----------   ------------   -------------   ---------
Balance as of March 31, 1998..............       $    -    $     (770)     $    (750)   $   (90,641)   $       (737)   $(92,898)
                                                 ======    ===========     ==========   ============   =============   =========

</TABLE>


          See accompanying notes to consolidated financial statements.



                                       5
<PAGE>




                              AMSCAN HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                     THREE MONTHS ENDED MARCH 31,
                                                                                     ----------------------------
                                                                                         1998           1997
                                                                                      ----------   ------------
Cash flows from operating activities:                                                
<S>                                                                                  <C>           <C>       
   Net income.....................................................................   $   2,271     $    5,302
     Adjustments to reconcile net income to net cash (used in) provided by
     operating activities:
     Depreciation and amortization................................................       1,723          1,477
     Amortization of deferred financing costs.....................................         162              7
     Amortization of restricted Common Stock award................................          65
     Provision for doubtful accounts..............................................         772            327
     Deferred income tax (benefit) provision......................................        (135)         1,007
     Changes in operating assets and liabilities:
       Increase in accounts receivable............................................      (9,938)       (13,767)
       Decrease in inventories....................................................       4,939          5,742
       Decrease in prepaid expenses and other current assets......................         963          2,094
       (Decrease) increase in accounts payable, accrued expenses and income
          taxes payable...........................................................      (1,249)           565
       Other, net.................................................................        (966)          (582)
                                                                                     ---------        -------
              Net cash (used in) provided by operating activities.................      (1,393)         2,172

Cash flows from investing activities:
   Capital expenditures...........................................................      (1,072)        (2,283)
   Proceeds from disposal of property and equipment...............................          17
                                                                                     ---------        -------

           Net cash used in investing activities..................................      (1,055)        (2,283)

Cash flows from financing activities:
   Payments to acquire Common Stock in Merger.....................................     (92,731)
   Net proceeds from sale of Common Stock.........................................                      4,539
   Proceeds from loans, notes payable and long-term obligations...................                        825
   Repayment of loans, notes payable and long-term obligations....................      (1,116)        (4,830)
   Repayment of subordinated and other indebtedness due to stockholders...........                       (157)
                                                                                   -----------    -----------
           Net cash (used in) provided by financing activities....................     (93,847)           377

   Effect of exchange rate changes on cash and cash equivalents...................        (104)           263
                                                                                     ---------   ------------
   Net (decrease) increase in cash and cash equivalents...........................     (96,399)           529
   Cash and cash equivalents at beginning of period...............................     111,539          1,589
                                                                                      --------    -----------
   Cash and cash equivalents at end of period.....................................    $ 15,140     $    2,118
                                                                                      ========     ==========

Supplemental Disclosures:
           Interest paid..........................................................      $2,839         $1,019
           Taxes paid.............................................................        $188          $ 532

</TABLE>

There were no capital lease  obligations  incurred during the three months ended
March 31, 1998.  Capital lease obligations of $59 were incurred during the three
months ended March 31, 1997.


          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, the "Company") was incorporated on October 3, 1996 for the purpose
of becoming the holding company for Amscan Inc. and certain affiliated  entities
in connection with an initial public offering of common stock.

         On August 10, 1997,  Amscan  Holdings and  Confetti  Acquisition,  Inc.
("Confetti"),  a newly formed  Delaware  corporation  affiliated with GS Capital
Partners II, L.P. and certain other private investment funds managed by Goldman,
Sachs & Co. (collectively, "GSCP"), entered into an Agreement and Plan of Merger
(the "Merger Agreement")  providing for a recapitalization of Amscan Holdings in
which  Confetti  would be merged with and into Amscan  Holdings (the  "Merger"),
with Amscan Holdings as the surviving corporation.

         On December 19, 1997 (the "Effective Time"), the Merger was consummated
pursuant  to the Merger  Agreement.  At the  Effective  Time,  each share of the
Common Stock,  par value $0.10 per share,  of the Company (the  "Company  Common
Stock"),  issued and outstanding  immediately prior to the Effective Time (other
than  shares of Company  Common  Stock  owned,  directly or  indirectly,  by the
Company or by Confetti) was converted,  at the election of each of the Company's
stockholders,  into the right to receive  from the Company  either (a) $16.50 in
cash or (b) $9.33 in cash plus a retained  interest in the Company  equal to one
share of Company Common Stock for every 150,000 shares held by such stockholder,
with  fractional  shares of Company Common Stock paid in cash.  Also pursuant to
the Merger  Agreement,  at the Effective Time each  outstanding  share of Common
Stock,  par value $0.10 per share, of Confetti  ("Confetti  Common Stock"),  was
converted  into an  equal  number  of  shares  of  Company  Common  Stock as the
surviving  corporation  in the Merger.  The Merger was  financed  with an equity
contribution of approximately $67.5 million (including  contributions of Company
Common  Stock by  certain  employee  stockholders  and  including  issuances  of
restricted  stock),  $117  million from a senior term loan and $110 million from
the issuance of senior  subordinated  notes.  The Merger was  accounted for as a
recapitalization and, accordingly,  the historical basis of the Company's assets
and liabilities were not affected by the Merger.

         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  majority-owned   subsidiaries.   Investments  in  less  than
majority-owned subsidiaries are accounted for on an equity basis.

         The accompanying  unaudited 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-month period ended March 31, 1998
are not necessarily  indicative of the results that may be expected for the year
ending December 31,



                                       7
<PAGE>




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


1998. 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, 1997.


NOTE 3:  INVENTORIES

         Inventories consisted of the following:
<TABLE>
<CAPTION>

                                                                               MARCH 31,     DECEMBER 31,
                                                                                 1998            1997
                                                                               ---------     ------------
                                                                                     (IN THOUSANDS)
<S>                                                                             <C>              <C>    
         Finished goods  ................................................       $43,103          $47,704
         Raw materials  .................................................         3,108            3,570
         Work-in-process  ...............................................         1,792            1,630
                                                                                -------         --------
                                                                                 48,003           52,904
         Less:  reserve for slow moving and obsolete inventory...........        (1,200)          (1,162)
                                                                                -------         --------
                                                                                $46,803          $51,742
                                                                                =======          =======
</TABLE>

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


NOTE 4:  INCOME TAXES

         The consolidated income tax provisions for the three months ended March
31,  1998 and  1997  were  determined  based  upon  estimates  of the  Company's
consolidated  effective  income tax rates for the years ending December 31, 1998
and 1997,  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

         As of  January  1,  1998,  the  Company  adopted  Financial  Accounting
Standards  ("SFAS")  No.  130,  Reporting  Comprehensive  Income.  SFAS No.  130
established new rules for the reporting and display of comprehensive  income and
its  components;  however,  the adoption of this  statement had no impact on the
Company's  net  income or  stockholders'  deficit.  SFAS No.  130  requires  the
Company's foreign currency translation adjustment,  which prior to adoption were
reported   separately  in   stockholders'   deficit  to  be  included  in  other
comprehensive  income.  Amounts reported in prior year financial statements have
been reclassified to conform to the requirements of SFAS No. 130.

         During the first quarter of 1998 and 1997, total  comprehensive  income
amounted to $2,256,000 and $5,493,000 consisting of net income of $2,271,000 and
$5,302,000,  and  foreign  currency  translation  adjustment  of  $(15,000)  and
$191,000, respectively. Accumulated other comprehensive income at March 31, 1998
and  December  31,  1997  consisted  solely of the  Company's  foreign  currency
translation adjustment.



                                       8
<PAGE>





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


NOTE 6:  CAPITAL STOCK

         At March 31, 1998 and December 31, 1997,  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 50,000,000 shares
of common  stock,  $0.10 par  value,  of which  1,010  shares  were  issued  and
outstanding.



                                       9
<PAGE>




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


RESULTS OF OPERATIONS
PERCENTAGE OF NET SALES

                                                    THREE MONTHS ENDED MARCH 31,
                                                    ----------------------------
                                                         1998          1997
                                                      ----------    ----------
        Net sales...................................    100.0%        100.0%
        Cost of sales...............................     64.8          64.7
                                                         ----          ----
                Gross profit........................     35.2          35.3
        Operating expenses:
           Selling expenses.........................      6.5           5.8
           General and administrative expenses......      9.2           8.2
           Art and development costs................      2.9           2.4
                                                        -----         -----
                Total operating expenses............     18.6          16.4
                                                         ----          ----
                Income from operations..............     16.6          18.9
        Interest expense, net.......................      9.5           1.9
        Other income, net...........................     (0.1)         (0.1)
                                                         ----          ----
                Income before income taxes
                     and minority interests.........      7.2          17.1
        Income taxes................................      3.0           7.0
        Minority interests..........................      0.1           0.1
                                                         ----         -----
                Net income..........................      4.1%         10.0%
                                                         ====          ====


 THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

         Net sales for the three months ended March 31, 1998 were $55.6 million,
as compared to $53.2  million for the three  months  ended March 31,  1997.  The
increase  in net sales  for the three  months  ended  March 31,  1998 of 4.5% is
attributable to growth in sales to party superstores and international customers
which  more than  offset  the  reduction  in sales  attributable  to the  recent
bankruptcies of two national accounts.

         The  Company   maintained   a  consistent   gross   profit   margin  of
approximately  35% between the first  quarters of 1998 and 1997  reflecting  its
effective management of product and distribution costs.

         Selling  expenses of $3.6  million for the three months ended March 31,
1998 were $0.5 million higher than those of the  corresponding  quarter in 1997.
Selling  expenses  increased  as a  percentage  of net  sales  from 5.8% to 6.5%
principally  due to the  expansion of the Company's  sales and customer  service
workforce and the addition of a new seasonal catalogue.

         General and  administrative  expenses of $5.1 million increased by $0.7
million  for  the  three  months  ended  March  31,  1998  as  compared  to  the
corresponding  quarter in 1997  principally  due to an increase in the Company's
provision for bad debts of $0.8 million.  as a percentage of net sales,  General
and administrative  expenses increased as a percentage of net sales from 8.2% to
9.2%.

         Art and  development  costs of $1.6  million for the three months ended
March 31, 1998 increased by $0.3 million compared to the  corresponding  quarter
in 1997. As a percentage of net sales, art and development  costs increased from
2.4% to 2.9%. The continued  investment in art and  development  expenditures in
1998 reflects the Company's  strategy to remain a leader in product  quality and
development.



                                       10
<PAGE>



         Interest  expense of $5.3  million for the three months ended March 31,
1998 increased by $4.3 million as compared to the  corresponding  period in 1997
due to the Company's  increased  borrowings  in connection  with the Merger (see
"Liquidity and Capital Resources").

         Income  taxes for the three  months  ended March 31, 1998 and 1997 were
based upon estimated  consolidated effective income tax rates of 41.5% and 40.5%
for the years  ending  December  31,  1998 and 1997,  respectively.  The  higher
effective  income tax rate for the year ending December 31, 1998 is attributable
to an increase in estimated state income taxes.

         Minority  interests  represent  the portion of income of the  Company's
subsidiaries attributable to equity ownership not held by Amscan Holdings.


LIQUIDITY AND CAPITAL RESOURCES

       On December  19, 1997 the Company and  Confetti  consummated  the Merger,
providing for a recapitalization of Amscan Holdings in which Confetti was merged
with and into Amscan Holdings with Amscan Holdings as the surviving corporation.
Upon  consummation of the Merger,  the Company's then existing loan arrangements
were repaid and  terminated  and 90% of its then  outstanding  Common  Stock was
converted into the right to receive cash. The Merger was financed with an equity
contribution of approximately $67.5 million (including  contributions of Company
Common  Stock by  certain  employee  stockholders  and  including  issuances  of
restricted  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  "Exchange
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 by the Merger.

       In addition  to the Term Loan,  the Bank  Credit  Facilities  provide for
revolving  loan  borrowings  of  up  to  $50  million  (the  "Revolving   Credit
Facility").  The  Revolving  Credit  Facility 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 March 31,  1998,  the entire $50 million was  available  to the
Company under the Revolving Credit Facility.

       As a result of the  recapitalization,  the Company had $236.6  million of
consolidated  indebtedness  and  $92.9  million  of  consolidated  stockholders'
deficit  at March 31,  1998.  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,  to permit  potential  acquisitions and to service its debt
requirements  as  they  become  due.  However,  the  Company's  ability  to make
scheduled  payments of principal  on, or to pay interest on, or to refinance its
indebtedness (including the Exchange Notes) 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  may affect the  Company's  ability to make future
capital expenditures.  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 March 31, 1998,  the Company
did not have material commitments for capital expenditures.



                                       11
<PAGE>




CASH FLOW DATA - THREE  MONTHS  ENDED  MARCH 31, 1998  COMPARED TO THREE  MONTHS
ENDED MARCH 31, 1997

       During the three  months  ended March 31,  1998,  the  Company  used $1.4
million of net cash for operating  activities as compared to $2.2 million of net
cash provided by operating  activities  during the same quarter in 1997. The net
cash used in  operating  activities  during the first  quarter  of 1998  results
principally from increased interest expense and corresponding  lower net income,
lower levels of accounts  payable,  and  increased  accounts  receivable  due to
extended terms given to customers in association with new promotions,  offset by
decreased  inventories,  reflecting  the shipment of "everyday"  goods which are
built-up  towards the end of the year in preparation for the introduction of the
new  "everyday"  line for the upcoming year.  During the  comparable  quarter in
1997, net cash provided by operating  activities  consisted of net income offset
by an increase in net operating assets.

        Net cash used in investing  activities  during the first quarter of 1998
of $1.1 million  decreased by $1.2 million from 1997 reflecting  lower levels of
capital expenditures.

        During the first quarter of 1998, net cash used in financing  activities
of $93.8 million  consisted  principally of payments of cash in connection  with
Common Stock  converted  into the right to receive cash in  connection  with the
Merger.  During the  comparable  period in 1997,  net cash provided by financing
activities  of $0.4  million  included  net  proceeds of $4.5  million  from the
issuance  of  Common  Stock  to cover  the  overallotments  provided  for in the
underwriting  agreement  relating to the Company's initial public offering,  and
proceeds of $0.8 million from  borrowings,  offset by repayments of indebtedness
to stockholders and third parties totaling $5.0 million.


RECENTLY ISSUED ACCOUNTING STANDARDS

       In June 1997,  the  Financial  Accounting  Standards  Board (the  "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 131, Disclosures
About  Segments  of  an  Enterprise  and  Related  Information.   SFAS  No.  131
establishes   standards  for  disclosure  about  operating  segments  in  annual
financial  statements  and requires  disclosure  of selected  information  about
operating segments in interim financial reports.  It also establishes  standards
for related disclosures about products and services,  geographic areas and major
customers.  This  statement  supersedes  SFAS No. 14,  Financial  Reporting  for
Segments of a Business  Enterprise.  The new standard becomes  effective for the
Company's  fiscal  year 1998 and  requires  that  comparative  information  from
earlier years be restated to conform to the  requirements of this standard.  The
Company does not believe any substantial changes to its disclosures will be made
at the time SFAS No. 131 is adopted.

        In February 1998, the FASB issued SFAS No. 132,  Employers'  Disclosures
about Pensions and Other Postretirement  Benefits.  The Statement supercedes the
disclosure requirements in SFAS No. 87, Employers' Accounting for Pensions, SFAS
No. 88,  Accounting for Settlements and  Curtailments of Defined Benefit Pension
Plans and for Termination Benefits,  and SFAS No. 106, Employers' Accounting for
Postretirement  Benefits Other Than Pensions.  SFAS No. 132 addresses disclosure
issues  only and does not  change  the  measurement  or  recognition  provisions
specified  in those  Statements.  SFAS No. 132 is  effective  for  fiscal  years
beginning after December 15, 1997.

         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.


"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



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<PAGE>




report that address activities,  events or developments that the Company expects
or  anticipates  will or may  occur  in the  future,  including  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  Securities  and  Exchange
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 there can be no assurance that the
actual results or  developments  anticipated by the Company will be realized or,
even if substantially realized, that they will 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 has  interest  rate risk  associated  with  variable  rate
indebtedness.  The Company utilizes  off-balance sheet financial  instruments to
manage the market risk associated with fluctuations in interest rates. It is the
Company's  policy to use derivative  financial  instruments  to protect  against
market risk arising in the normal course of business.  Company policies prohibit
the use of derivative instruments for the purpose of trading for profit on price
fluctuations or contracts which intentionally  increase the Company's underlying
exposure.


                                     PART II


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


         (a)  Exhibits


               Exhibit
               Number                   DESCRIPTION
               ------                   -----------

                 27                     Financial Data Schedule



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<PAGE>


         (b)  Reports on Form 8 - K

              A  Current  Report  on Form 8-K  dated  April  29,  1998 was filed
              regarding  the  change  in  the  Company's   independent  auditors
              responding to Item 4 of Form 8-K.



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<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
Date: May 15, 1998                  accounting officer)
      -----------------


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