SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON, D.C. 20549

                                  FORM 10-Q

(Mark One)
  /X/           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED APRIL 2, 2000

                                      OR

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

                       COMMISSION FILE NUMBER 000-29764

                     INTERNATIONAL SPECIALTY PRODUCTS INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


        DELAWARE                                               51-0376469
(State of Incorporation)                                  (I. R. S. Employer
                                                           Identification No.)

 300 DELAWARE AVENUE, SUITE 303, WILMINGTON, DELAWARE            19801
(Address of principal executive offices)                       (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE           (302) 427-5715

     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, 2000,  68,949,702 shares of International  Specialty Products
Inc. common stock (par value $.01 per share) were outstanding.



<PAGE>






                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS

                     INTERNATIONAL SPECIALTY PRODUCTS INC.

                 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                     (THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                QUARTER ENDED,
                                             ---------------------
                                              APRIL 4,   APRIL 2,
                                                1999       2000
                                             ---------  ----------
Net sales...............................     $ 201,648  $  197,941
Cost of products sold...................      (119,385)   (129,434)
Selling, general and administrative.....       (39,806)    (38,862)
Gain on sale of assets..................         8,541         -
Goodwill amortization...................        (4,195)     (4,048)
                                             ---------  ----------
Operating income........................        46,803      25,597
Interest expense........................       (20,240)    (19,722)
Gain on contract settlement ............          -          3,450
Other income (expense), net.............        (8,876)      2,463
                                             ---------  ----------
Income from continuing operations
  before income taxes...................        17,687      11,788
Income taxes............................        (6,205)     (4,116)
                                             ---------  ----------
Income from continuing operations.......        11,482       7,672
Income from discontinued operation......           540         -
                                             ---------  ----------
Net income..............................     $  12,022  $    7,672
                                             =========  ==========
Earnings per common share:
  Basic:
    Continuing operations...............     $     .16  $      .11
    Discontinued operation..............           .01          -
                                             ---------  ----------
    Net income..........................     $     .17  $      .11
                                             =========  ==========
  Diluted:
    Continuing operations...............     $     .16  $      .11
    Discontinued operation..............           .01          -
                                             ---------  ----------
    Net income..........................     $     .17  $      .11
                                             =========  ==========
 Weighted average number of common
   and common equivalent shares
   outstanding:

  Basic.................................        68,760      68,849
                                             =========  ==========
  Diluted...............................        68,978      68,857
                                             =========  ==========


The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.


                                       1
<PAGE>


                     INTERNATIONAL SPECIALTY PRODUCTS INC.

                          CONSOLIDATED BALANCE SHEETS
                                                                 APRIL 2,
                                                  DECEMBER 31,     2000
                                                      1999     (UNAUDITED)
                                                  ------------ -----------
                                                         (THOUSANDS)
ASSETS
Current Assets:
  Cash and cash equivalents...................... $   23,309   $   44,952
  Investments in trading securities..............     10,395        5,400
  Investments in available-for-sale securities...    344,905      440,278
  Other short-term investments...................     41,900       46,077
  Accounts receivable, trade, net................     82,201       92,868
  Accounts receivable, other.....................     23,410       24,955
  Receivable from related parties, net...........     16,901       19,305
  Inventories....................................    151,775      150,894
  Other current assets...........................     20,569       25,428
                                                  ----------   ----------
Total Current Assets.............................    715,365      850,157
Property, plant and equipment, net...............    570,218      565,729
Goodwill, net....................................    510,578      506,530
Other assets.....................................     39,147       39,189
                                                  ----------   ----------
Total Assets..................................... $1,835,308   $1,961,605
                                                  ==========   ==========


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Short-term debt................................ $   82,531   $  124,097
  Current maturities of long-term debt...........     38,543       38,498
  Accounts payable...............................     63,852       67,149
  Accrued liabilities............................     86,350       76,888
  Income taxes...................................      6,006        7,854
                                                  ----------   ----------
    Total Current Liabilities....................    277,282      314,486
                                                  ----------   ----------
Long-term debt less current maturities...........    820,141      841,209
                                                  ----------   ----------
Deferred income taxes............................     89,796      112,556
                                                  ----------   ----------
Other liabilities................................     60,828       60,139
                                                  ----------   ----------
Stockholders' Equity:
  Preferred stock, $.01 par value per share;
    20,000,000 shares authorized:
    no shares issued.............................          -            -
  Common stock, $.01 par value per share;
    300,000,000 shares authorized:  69,546,456
    shares issued ...............................        695          695
  Additional paid-in capital.....................    486,137      485,931
  Treasury stock, at cost - 754,199 and
    596,754 shares, respectively.................     (7,344)      (5,812)
  Retained earnings..............................    119,822      127,494
  Accumulated other comprehensive income(loss)...    (12,049)      24,907
                                                  ----------   ----------
    Total Stockholders' Equity...................    587,261      633,215
                                                  ----------   ----------
Total Liabilities and Stockholders' Equity....... $1,835,308   $1,961,605
                                                  ==========   ==========


The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

                                       2
<PAGE>


                     INTERNATIONAL SPECIALTY PRODUCTS INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                              QUARTER ENDED
                                                           -------------------
                                                            APRIL 4,  APRIL 2,
                                                              1999      2000
                                                           --------  ---------
                                                               (THOUSANDS)

Cash and cash equivalents, beginning of period...........  $ 23,130  $ 23,309
                                                           --------  ---------
Cash provided by (used in) operating activities:
  Net income.............................................    12,022     7,672
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Income from discontinued operation.................      (540)      -
      Gain on sale of assets.............................    (8,541)      -
      Depreciation.......................................    12,000    12,432
      Goodwill amortization..............................     4,195     4,048
      Deferred income taxes..............................    (2,939)   (1,242)
      Unrealized gains on trading securities and other
        short-term investments...........................    (8,424)  (14,840)
  Increase in working capital items......................   (17,856)  (12,124)
  Purchases of trading securities........................   (44,742)  (18,906)
  Proceeds from sales of trading securities..............    52,336    34,564
  Increase in net receivable from related parties........    (5,326)   (2,404)
  Change in cumulative translation adjustment............   (11,065)   (6,282)
  Other, net.............................................     1,849     2,878
                                                           --------  --------
    Net cash provided by (used in) continuing operations.   (17,031)    5,796
    Net cash provided by discontinued operation..........     1,866       -
                                                           --------  --------
Net cash provided by (used in) operating activities......   (15,165)    5,796
                                                           --------  --------
Cash provided by (used in) investing activities:
  Capital expenditures...................................   (14,346)  (11,284)
  Proceeds from sale of assets...........................    11,533       -
  Purchases of available-for-sale securities............    (52,006)  (94,678)
  Proceeds from sales of available-for-sale securities...     6,920    64,398
  Proceeds from held-to-maturity securities..............    11,440       -
  Proceeds from sales of other short-term investments....     8,935       -
                                                           --------  --------
Net cash used in investing activities....................   (27,524)  (41,564)
                                                           --------  --------
Cash provided by financing activities:
  Proceeds (repayments)from sale of accounts receivable..       -      (5,675)
  Increase in short-term debt............................    43,517    41,566
  Increase in borrowings under revolving credit facility.   207,000    21,100
  Repayments of long-term debt...........................  (200,097)     (110)
  Repurchases of common stock............................    (3,046)      -
  Other, net.............................................       396       530
                                                           --------  --------
Net cash provided by financing activities................    47,770    57,411
                                                           --------  --------
Net change in cash and cash equivalents..................     5,081    21,643
                                                           --------  --------
Cash and cash equivalents, end of period.................  $ 28,211  $ 44,952
                                                           ========  ========

                                       3
<PAGE>


                     INTERNATIONAL SPECIALTY PRODUCTS INC.

        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)-- (CONTINUED)


                                                          QUARTER ENDED
                                                       -------------------
                                                        APRIL 4,  APRIL 2,
                                                          1999      2000
                                                       --------- ---------
                                                           (THOUSANDS)

Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest (net of amount capitalized).............   $ 25,464  $  17,007
    Income taxes.....................................      8,543      4,722

































The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.



                                       4
<PAGE>



                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated financial statements for International  Specialty Products
Inc. (the  "Company")  reflect,  in the opinion of management,  all  adjustments
necessary to present  fairly the  financial  position of the Company at April 2,
2000,  and the results of operations  and cash flows for the periods ended April
4, 1999 and April 2, 2000. All  adjustments  are of a normal  recurring  nature.
These  financial  statements  should  be read in  conjunction  with  the  annual
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999 (the "Form 10-K").


NOTE 1.  DISCONTINUED OPERATION

  On October 1, 1999, the Company sold the stock of its filter products ("Filter
Products") subsidiaries to Hayward Industrial Products Inc. for a purchase price
of $62 million. Accordingly, the Filter Products business segment is reported as
a discontinued  operation,  and the consolidated  financial statements have been
reclassified to report  separately the operating  results of the Filter Products
business  segment.  The  Company's  prior year  financial  statements  have been
restated to reflect continuing operations.

     Summary  operating  results for the Filter Products  business for the first
quarter of 1999 are as follows:

                                                      First
                                                     Quarter
                                                      1999
                                                   -----------
                                                   (Thousands)
Sales..........................................      $10,522
Income before income taxes.....................          832
Income taxes...................................         (292)
Net income.....................................          540

















                                       5
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 2.  GAIN ON CONTRACT SETTLEMENT

         In the first  quarter of 2000,  the Company  received $3.5 million from
the  settlement  of a pre-1997  contract  termination  dispute  relating  to the
Company's Mineral Products business.

NOTE 3.  COMPREHENSIVE INCOME
                                                    Quarter Ended
                                                 --------------------
                                                  April 4,   April 2,
                                                    1999       2000
                                                 ---------  ---------
                                                      (Thousands)

Net income.....................................   $ 12,022   $  7,672
                                                  --------   --------
Other comprehensive income (loss), net of tax:
  Change in unrealized gains (losses)
    on available-for-sale securities:
  Unrealized holding gains (losses) arising
    during the period, net of income tax
    (provision) benefit of $1,363
    and $(20,419)..............................     (2,259)    40,238
  Less: reclassification adjustment
   for gains (losses) included in net income,
   net of income tax (provision) benefit of
   $(120) and $ 1,436 .........................        278     (3,000)
                                                 ---------   ---------
  Total........................................     (2,537)    43,238
  Foreign currency translation adjustment......    (11,065)    (6,282)
                                                 ---------   ---------
Total other comprehensive income (loss)........    (13,602)    36,956
                                                 ---------   ---------
Comprehensive income (loss)....................  $  (1,580)  $ 44,628
                                                 =========   =========

     Changes  in the  components  of  "Accumulated  other  comprehensive  income
(loss)" for the quarter ended April 2, 2000 are as follows:

                               Unrealized   Cumulative
                               Gains on     Foreign      Accumulated
                               Available-   Currency     Other
                               for-sale     Translation  Comprehensive
                               Securities   Adjustment   Income (Loss)
                               ----------   -----------  -------------
                                           (Thousands)
Balance, December 31, 1999..   $  1,844     $(13,893)      $(12,049)
Change for the period.......     43,238       (6,282)        36,956
                               --------     --------       --------
Balance, April 2, 2000......   $ 45,082     $(20,175)      $ 24,907
                               ========     ========       ========


                                       6
<PAGE>



            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 4.  BUSINESS SEGMENT INFORMATION

                                                            Quarter Ended
                                                         ---------------------
                                                          April 4,    April 2,
                                                            1999        2000
                                                         ---------   ---------
                                                              (Thousands)
Net sales:
  Personal Care......................................... $  52,272   $  48,606
  Pharmaceutical, Food and Beverage.....................    42,837      59,844
  Performance Chemicals, Fine Chemicals and
    Industrial..........................................    83,375      70,930
                                                         ---------   ---------
    Total Specialty Chemicals...........................   178,484     179,380
  Mineral Products (1)..................................    23,164      18,561
                                                         ---------   ---------
Net sales............................................... $ 201,648   $ 197,941
                                                         =========   =========

Operating income(2):
  Personal Care(3)...................................... $  19,282   $   8,313
  Pharmaceutical, Food and Beverage.....................    10,709      12,776
  Performance Chemicals, Fine Chemicals and
    Industrial..........................................    12,414       1,902
                                                          --------   ---------
    Total Specialty Chemicals...........................    42,405      22,991
  Mineral Products......................................     4,213       2,629
                                                          --------   ---------
  Total segment operating income........................    46,618      25,620
  Unallocated corporate office..........................       185         (23)
                                                         ---------   ---------
Total operating income..................................    46,803      25,597
Interest expense and other, net.........................   (29,116)    (13,809)
                                                         ---------   ---------
Income from continuing operations before
 income taxes........................................... $  17,687   $  11,788
                                                         =========   =========

(1)  Includes sales to Building Materials  Corporation of America, an affiliate,
     and its  subsidiaries,  of $16.2 and $16.3 million for the first quarter of
     1999 and 2000, respectively.

(2)  Operating  income  for the first  quarter  of 1999 for the three  Specialty
     Chemicals  business  segments have been reclassified to conform to the 2000
     presentation, based on a reallocation of certain manufacturing costs.

(3)  Personal  Care  operating  income for the first  quarter of 1999 includes a
     pre-tax  gain of $8.5  million  from the sale of the  pearlescent  pigments
     product line.






                                       7
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE 5.  INVENTORIES

     Inventories comprise the following:

                                       December 31,    April 2,
                                           1999          2000
                                       ------------   ----------
                                              (Thousands)
     Finished goods................     $107,583      $  96,835
     Work-in-process...............       18,457         29,671
     Raw materials and supplies....       25,735         24,388
                                        --------      ---------
     Inventories...................     $151,775      $ 150,894
                                        ========      =========

         At  December  31,  1999 and April 2,  2000,  $47.7  and $45.4  million,
respectively,  of domestic inventories were valued using the LIFO method. If the
FIFO inventory method had been used for these inventories,  they would have been
$2.7  million  higher at December  31, 1999 and $0.2  million  lower at April 2,
2000.


NOTE 6.  LONG-TERM DEBT

     On April 11, 2000,  the Company  repaid $10.0  million of the $38.1 million
mortgage  on its  headquarters  property.  The  Company  received  a  nine-month
extension,  to January 11, 2001, on the remaining  $28.1 million of the mortgage
obligation.



NOTE 7.  RESTRUCTURING RESERVES

     The Company recorded $73.0 million in 1998 for provisions for restructuring
and  impairment  loss,  primarily  related  to its  decision  to shut  down  its
butanediol production unit at its Calvert City, Kentucky  manufacturing facility
and a writedown to fair value of certain butanediol assets at its Texas City and
Seadrift, Texas manufacturing  facilities.  The total charge included an accrual
of $7.5 million for cash costs to be incurred,  principally for decommissioning,
demolition  and  remediation,  and  severance  costs.  During 1999 and the first
quarter of 2000,  $5.1 million of costs were charged  against this  reserve.  In
addition, in 1999, the Company reversed $1.9 million of such previously recorded
restructuring  reserves,  representing  an  excess  demolition  reserve  of $0.8
million and $1.1 million of other  reserves,  mainly for raw materials  contract
terminations,  which were no longer required. The reserve balance as of April 2,
2000 was $0.5 million,  representing  remaining  demolition  costs.  The Company
expects this program to be completed by July 2000.

     In the third quarter of 1999,  the Company  implemented  a staff  reduction
program impacting  corporate and worldwide  executive and  administrative  staff
positions. As a result, a total of 79 positions were eliminated in 1999

                                       8
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


through normal  attrition or termination,  for which the Company recorded a pre-
tax provision for severance of $2.3 million.  The applicable  severance  reserve
remaining as of April 2, 2000 was $0.1 million.


NOTE 8.  NEW ACCOUNTING STANDARD

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards  requiring that every derivative  instrument be recorded in
the balance  sheet as either an asset or  liability  measured at its fair value.
SFAS No. 133 requires  that changes in a  derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related results on the hedged item in the income statement.

     SFAS No. 133, as amended by SFAS No. 137,  is  effective  for fiscal  years
beginning after June 15, 2000, but may be adopted  earlier.  The Company has not
yet determined the effect of adoption of SFAS No. 133 and has not determined the
timing or method of  adoption of the  statement.  Adoption of SFAS No. 133 could
increase volatility in earnings and other comprehensive income.


NOTE 9.  CONTINGENCIES

Environmental Litigation

     The  Company,  together  with other  companies,  is a party to a variety of
proceedings  and  lawsuits  involving   environmental  matters   ("Environmental
Claims"),  in which  recovery is sought for the cost of cleanup of  contaminated
sites,  a number of which  Environmental  Claims are in the early stages or have
been dormant for protracted periods.

     In  the  opinion  of  the  Company's  management,  the  resolution  of  the
Environmental Claims should not be material to the business,  liquidity, results
of operations, cash flows or financial position of the Company. However, adverse
decisions  or  events,  particularly  as to  the  liability  and  the  financial
responsibility  of the Company's  insurers and of the other parties  involved at
each site and their  insurers,  could cause the Company to increase its estimate
of its  liability in respect of such matters.  It is not  currently  possible to
estimate the amount or range of any additional liability.

     For further information regarding environmental matters,  reference is made
to Note 17 to Consolidated Financial Statements contained in the Form 10-K.



                                       9
<PAGE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Tax Claim against GAF

     Certain  subsidiaries  of the Company were  members of the GAF  Corporation
("GAF")  consolidated  Federal  income tax group (the "GAF  Group") in 1990 and,
accordingly, would be severally liable for any tax liability of the GAF Group in
respect of such year.  Effective as of January 1, 1997,  neither the Company nor
any of its subsidiaries are members of the GAF Group.

     On  September  15, 1997,  GAF  received a notice from the Internal  Revenue
Service (the "IRS") of a deficiency in the amount of $84.4 million (after taking
into account the use of net operating  losses and foreign tax credits  otherwise
available  for use in later years) in  connection  with the formation in 1990 of
Rhone-Poulenc Surfactants and Specialties, L.P. (the "surfactants partnership"),
a partnership in which a subsidiary of GAF, GAF Fiberglass Corporation,  held an
interest.  The claim of the IRS for  interest and  penalties,  after taking into
account the effect on the use of net  operating  losses and foreign tax credits,
could  result  in GAF  incurring  liabilities  significantly  in  excess  of the
deferred tax liability of $131.4  million that it recorded in 1990 in connection
with this  matter.  GAF has advised the  Company  that it believes  that it will
prevail in this matter,  although there can be no assurance in this regard.  The
Company  believes that the ultimate  disposition  of this matter will not have a
material  adverse  effect on its  business,  financial  position  or  results of
operations.  GAF and  certain  subsidiaries  of GAF have  agreed to jointly  and
severally  indemnify the Company  against any tax liability  associated with the
surfactants  partnership,  which the  Company  would be  severally  liable  for,
together with GAF and several current and former subsidiaries of GAF, should GAF
be unable to satisfy such liability. For additional information relating to GAF,
reference is made to Note 17 to Consolidated  Financial  Statements contained in
the Form 10-K.














                                       10
<PAGE>



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


Results of Operations - First Quarter 2000 Compared With
                        First Quarter 1999

     The Company  recorded first quarter 2000 income from continuing  operations
of $7.7 million  ($.11 diluted  earnings per share)  compared with $11.5 million
($.16 diluted  earnings per share) in the first quarter of 1999. The results for
the  first  quarter  of 2000  include a pre-tax  gain of $3.5  million  from the
settlement of a pre-1997  contract  termination  dispute relating to the Mineral
Products  business  segment,  while the  results  for the first  quarter of 1999
included an $8.5 million pre-tax gain from the sale of the Company's pearlescent
pigments  business,  a  non-core  product  line.  Excluding  the  effect of such
non-recurring  items in each period,  income from continuing  operations for the
first  quarter  of 2000 was $5.4  million  ($.08  diluted  earnings  per  share)
compared  with $5.9  million  ($.09  diluted  earnings  per share) for the first
quarter of 1999. On a comparable  basis, the lower results were  attributable to
lower operating income, offset by higher other income.

     Net sales for the first quarter of 2000 were $197.9  million  compared with
$201.6  million  for  the  same  period  in  1999.  The  decline  in  sales  was
attributable to lower sales in all business segments except the  Pharmaceutical,
Food and Beverage business  segment,  which included $18.2 million of sales from
the Kelco  Alginates  business that was acquired in October  1999.  The decrease
resulted  primarily from lower sales for the Fine Chemicals business and Mineral
Products business segment as a result of customer contracts that expired in each
of the businesses at the end of 1999,  lower pricing in butanediol and solvents,
and the adverse effect of the stronger U.S. dollar ($5.4 million),  particularly
in Europe.  The lower sales  reflected  sales  declines in the U.S.  and Europe,
partially  offset by 14% and 19% sales  increases  in the Asia Pacific and Latin
America regions, respectively.

     Operating  income for the first quarter of 2000 was $25.6 million  compared
with  $38.3  million  (excluding  the  $8.5  million  gain  on the  sale  of the
pearlescent  pigments  business) for the first quarter of 1999. The  unfavorable
operating  results for the first  quarter of 2000 were  attributable  to a lower
gross margin due mainly to continued  lower pricing in butanediol  and solvents,
the  impact  of  lower  sales  volumes  due to the  expired  customer  contracts
previously  mentioned and the adverse  effect of the stronger U.S.  dollar ($3.0
million).  Operating income for the  Pharmaceutical,  Food and Beverage business
segment increased 19%, reflecting the results of the alginates business acquired
in October 1999. The operating income for all other business  segments  declined
in the quarter as a result of the factors discussed above. Selling,  general and
administrative  expenses  decreased by $0.9 million (2%) in the first quarter of
2000,  as an 11%  reduction in  administrative  expenses  that resulted from the
Company's  third  quarter 1999  reduction in corporate  staff and other


                                       11
<PAGE>




expense  reduction  efforts  were  partially offset  by 13% higher research  and
development spending.

     Interest  expense for the first quarter of 2000 was $19.7 million  compared
with $20.2 million for the same period last year.  The decrease was due to lower
average  borrowings,  partially offset by higher average  interest rates.  Other
income, net, for the quarter was $2.4 million compared with other expense,  net,
of $8.9  million  in  last  year's  first  quarter,  with  the  improvement  due
principally to $9.6 million higher investment income.


Business Segment Review

     A  discussion  of  operating  results  for each of the  Company's  business
segments follows.  The Company operates its Specialty Chemicals business through
three reportable business segments, in addition to the Mineral Products segment.


Personal Care

         Sales in the first  quarter of 2000 were $48.6  million  compared  with
$52.3 million for the same period last year.  The lower sales  resulted from the
continued  lower  average  pricing  in both  skin  care  and  hair  care and the
unfavorable  impact of the stronger U.S. dollar in Europe,  and also reflect the
absence of sales from the  pearlescent  pigments  business,  which recorded $1.3
million of sales in the first quarter of 1999 prior to its sale.

         Operating  income  for the  first  quarter  of 2000  was  $8.3  million
compared  with $19.3  million in last year's  quarter,  which  included the $8.5
million  pre-tax  gain  from  the  sale of the  pearlescent  pigments  business.
Excluding  the effect of that gain,  operating  income  decreased  $2.4 million,
primarily reflecting the lower pricing and sales volumes discussed above.


Pharmaceutical, Food and Beverage ("PFB")

         Sales for the PFB segment were $59.8  million for the first  quarter of
2000, a 40% increase  compared with $42.8 million for the first quarter of 1999,
while  operating  income  increased by 19% to $12.8 million versus $10.7 million
last year. The increases in sales and operating income were both attributable to
the alginates business,  acquired in October 1999, which recorded sales of $18.2
million in the first quarter of 2000. Sales for the remainder of the PFB segment
decreased by $1.2 million as a result of unfavorable  foreign exchange in Europe
($1.4 million),  partially  offset by increased  volumes for the  Pharmaceutical
business, primarily in the antiseptic market in the Asia Pacific region.


                                       12
<PAGE>





         Operating  income  for  the  Pharmaceutical  and  Beverage   businesses
decreased 7% in the first quarter of 2000 compared with the same period in 1999.
The  principal  factors for the decline were the adverse  effect of the stronger
U.S.  dollar in Europe and higher  operating  expenses  (principally  24% higher
research and development spending),  partially offset by the impact of increased
Pharmaceutical sales volumes.

Performance Chemicals, Fine Chemicals and Industrial

         Sales in the first  quarter of 2000 were $70.9  million  compared  with
$83.4  million in the first  quarter  of 1999.  The lower  sales were  primarily
attributable to a 35% sales decrease for the Fine Chemicals business,  which was
significantly  impacted by the expiration of a substantial custom  manufacturing
agreement  at the end of 1999.  Higher  sales  volumes of other  Fine  Chemicals
products  could only partially  offset the loss of this contract.  Sales for the
Performance  Chemicals  business  decreased by 17%, primarily due to lower sales
volumes in Europe.  Sales for the  Industrial  business  decreased  by 7% due to
continued   unfavorable   pricing  in  butanediol,   N-methyl   pyrrolidone  and
tetrahydrofuran,  mainly in Europe,  and the adverse impact of the stronger U.S.
dollar in Europe,  partially  offset by increased  volumes,  which included $2.5
million  in sales  from  product  exchange  arrangements  pursuant  to which the
Company sold butanediol, at cost, to other butanediol producers.

         Operating  income for the  Performance  Chemicals,  Fine  Chemicals and
Industrial  segment was $1.9 million for the first  quarter of 2000 versus $12.4
million for the same period last year.  The  principal  factors for this decline
were the  adverse  impact  from the  expiration  of the  Fine  Chemicals  custom
manufacturing agreement, the unfavorable pricing in the Industrial business, and
the lower Performance Chemicals sales volumes in Europe.


Mineral Products

         Sales for the Mineral  Products  segment for the first  quarter of 2000
were $18.6  million  compared  with $23.2 million for the first quarter of 1999.
The lower sales were  attributable to 68% lower trade sales,  resulting from the
loss of two major trade  customers  for colored  roofing  granules in the fourth
quarter of 1999,  partially  offset by an additional  $1.0 million in sales from
new  customers  in the  first  quarter  of  2000.  Sales to  Building  Materials
Corporation of America, an affiliate, increased slightly in the first quarter of
2000 over the same period last year.  Operating  income for the first quarter of
2000 was $2.6 million  compared with $4.2 million for the first quarter of 1999,
reflecting the impact of the trade contract expirations.


                                       13
<PAGE>



Liquidity and Financial Condition

         During the first quarter of 2000, the Company's net cash outflow before
financing activities was $35.8 million, including $5.8 million of cash generated
from  continuing  operations,  the  reinvestment  of $11.3  million  for capital
programs  and  the  use  of  $30.3   million  of  cash  for  net   purchases  of
available-for-sale securities.

         Cash  invested in  additional  working  capital  totaled  $12.1 million
during the first quarter of 2000,  mainly  reflecting a $6.5 million increase in
receivables and a $4.2 million net decrease in payables and accrued liabilities.
The net cash generated from operating  activities  also included a $15.7 million
cash inflow from net sales of trading securities.

         Net cash provided by financing  activities  during the first quarter of
2000 totaled $57.4  million,  reflecting a $21.1 million  increase in borrowings
under the Company's bank revolving  credit facility and a $41.6 million increase
in short-term  borrowings,  partially offset by a $5.7 million repayment related
to the Company's sale of domestic trade accounts receivable.

         As a  result  of the  foregoing  factors,  cash  and  cash  equivalents
increased by $21.6 million  during the first  quarter of 2000 to $45.0  million,
excluding $491.8 million of trading and available-for-sale  securities and other
short-term investments.

         The  Company   recorded  $73.0  million  in  1998  for  provisions  for
restructuring  and impairment  loss,  primarily  related to its decision to shut
down its butanediol production unit at its Calvert City, Kentucky  manufacturing
facility and a writedown to fair value of certain butanediol assets at its Texas
City and Seadrift, Texas manufacturing facilities.  The total charge included an
accrual  of  $7.5  million  for  cash  costs  to be  incurred,  principally  for
decommissioning,  demolition and remediation,  and severance costs.  During 1999
and the first quarter of 2000,  $5.1 million of costs were charged  against this
reserve.  In  addition,  in 1999,  the  Company  reversed  $1.9  million of such
previously recorded  restructuring  reserves,  representing an excess demolition
reserve  of $0.8  million  and $1.1  million of other  reserves,  mainly for raw
materials  contract  terminations,  which were no longer  required.  The reserve
balance as of April 2, 2000 was $0.5 million,  representing remaining demolition
costs. The Company expects this program to be completed by July 2000.

         In the third quarter of 1999, the Company implemented a staff reduction
program impacting  corporate and worldwide  executive and  administrative  staff
positions.  As a result, a total of 79 positions were eliminated in 1999 through
normal  attrition  or  termination,  for which the  Company  recorded  a pre-tax
provision  for  severance of $2.3  million.  The  applicable  severance  reserve
remaining as of April 2, 2000 was $0.1 million.



                                       14
<PAGE>




         On January 27, 2000, the Company  announced that it had notified Dexter
Corporation  ("Dexter") of its intent to present at Dexter's 2000 Annual Meeting
of  Shareholders,  and  solicit  proxies  in favor of, a series  of  resolutions
designed to facilitate the Company's business  combination  proposal.  Under the
proposal,  as amended on March 23, 2000,  Dexter  shareholders  would receive at
least $50 per share in cash,  subject to the execution of a mutually  acceptable
merger  agreement.  The  Company  has filed  with the  Securities  and  Exchange
Commission a  preliminary  proxy  statement in connection  with Dexter's  Annual
Meeting.  On March 23, 2000, the Company  received a binding  commitment  from a
financial institution to provide, subject to customary conditions, senior credit
facilities  in the  aggregate  amount of $1.825  billion to, among other things,
finance the acquisition of Dexter.

         See  Note  9  to  Consolidated  Financial  Statements  for  information
regarding contingencies.

                                     * * *

Forward-looking Statements

         This  Quarterly  Report  on Form  10-Q  contains  both  historical  and
forward-looking  statements.  All statements other than statements of historical
fact are, or may be deemed to be, forward-looking  statements within the meaning
of section 27A of the  Securities  Act of 1933 and section 21E of the Securities
Exchange Act of 1934. These forward-looking  statements are only predictions and
generally can be identified  by use of statements  that include  phrases such as
"believe", "expect", "anticipate", "intend", "plan", "foresee" or other words or
phrases of similar  import.  Similarly,  statements  that describe the Company's
objectives,  plans or goals also are forward-looking  statements.  The Company's
operations  are  subject to certain  risks and  uncertainties  that could  cause
actual  results to differ  materially  from those  contemplated  by the relevant
forward-looking  statement.  The forward-looking  statements included herein are
made only as of the date of this  Quarterly  Report on Form 10-Q and the Company
undertakes no obligation to publicly update such  forward-looking  statements to
reflect  subsequent  events or  circumstances.  No assurances  can be given that
projected results or events will be achieved.









                                       15
<PAGE>



               ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                              ABOUT MARKET RISK


     Reference  is made to  Management's  Discussion  and  Analysis of Financial
Condition  and  Results  of  Operations  in the Form  10-K for a  discussion  of
"Market-Sensitive  Instruments  and Risk  Management."  As of December 31, 1999,
equity-related  financial  instruments  employed by the Company to reduce market
risk included long contracts  valued at $50.1 million and short contracts valued
at $6.5  million.  At April 2,  2000,  the  value of long  contracts  was  $77.5
million, while all short contracts were terminated in the first quarter of 2000.
Since such instruments are  marked-to-market  each month,  with unrealized gains
and losses included in the results of operations,  there was no economic cost to
the Company to terminate these instruments.

























                                       16
<PAGE>


                                    PART II


                               OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     27   - Financial Data Schedule for  the  quarter ended April 2, 2000, which
            is  submitted   electronically   to  the   Securities  and  Exchange
            Commission for information only.


(b) No Reports on Form 8-K were filed during the quarter ended April 2, 2000.



























                                       17
<PAGE>
                                  SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.


                             INTERNATIONAL SPECIALTY PRODUCTS INC.



DATE:  May 16, 2000           BY:   /s/Randall R. Lay
       ------------                 -----------------

                                    Randall R. Lay
                                    Executive Vice President and
                                      Chief Financial Officer
                                    (Principal Financial and
                                      Accounting Officer)




















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