================================================================================


                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(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 4, 1998

                                       OR

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

                          Commission File Number 1-9843

                              MORGAN PRODUCTS LTD.
             (Exact name of registrant as specified in its charter)

                DELAWARE                               06-1095650
     (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)

                 469 McLaws Circle, Williamsburg, Virginia 23185
          (Address of principal executive offices, including zip code)

                                (757) 564-1700
             (Registrant's telephone number, including area code)

                              -------------------

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 ( )

The number of shares outstanding of registrant's Common Stock, par value $.10
per share, at April 27, 1998 was 10,358,692; 2,386 shares are held in treasury.


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<PAGE>


                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                              MORGAN PRODUCTS LTD.
                           Consolidated Balance Sheets
                        ($000 Except Shares Outstanding)

                                          April 4,       April 5,   December 31,
                                            1998           1997         1997
                                        -----------    -----------  ------------
                                        (Unaudited)    (Unaudited)
                 ASSETS

CURRENT ASSETS:
  Cash and cash equivalents             $      663     $      774     $   4,197
  Accounts receivable, net                  33,306         40,380        28,743
  Inventories                               35,974         75,562        40,533
  Assets held for sale                           0              0        32,285
  Other current assets                       1,160          1,241           558
                                        ----------     ----------     ----------
    Total current assets                    71,103        117,957       106,316
                                        ----------     ----------     ----------
PROPERTY, PLANT & EQUIPMENT, net            10,079         23,230        10,276

GOODWILL,net                                 6,558          5,062         6,632

OTHER ASSETS                                 4,584          5,743         5,552
                                        ----------     ----------     ----------
  TOTAL  ASSETS                         $   92,324     $  151,992     $ 128,776
                                        ----------     ----------     ----------

  LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term debt                       $      376     $      395     $       0
  Current maturities of long-term debt       1,111          1,282         1,213
  Accounts payable                          11,837         14,148        13,151
  Accrued compensation and 
    employee benefits                        4,186          5,847         8,729
  Income taxes payable                         134              0             0
  Other current liabilities                  3,369          3,510         5,899
                                        ----------     ----------     ----------
    Total current liabilities               21,013         25,182        28,992
                                        ----------     ----------     ----------
LONG-TERM DEBT                              30,454         66,686        57,353

STOCKHOLDERS' EQUITY:

  Common Stock, $.10 par value,
  10,358,512, 10,152,912, and 10,357,808
  shares outstanding,respectively            1,036          1,015         1,036
  Paid-in capital                           43,417         42,252        43,413
  Retained earnings (accumulated deficit)   (3,548)        16,995        (1,970)
                                        ----------     ----------     ----------
                                            40,905         60,262        42,479

  Treasury stock, 2,386 shares, at cost        (48)           (48)          (48)
  Unearned compensation-restricted stock         0            (90)            0
                                        ----------     ----------     ----------
  TOTAL  STOCKHOLDERS'  EQUITY              40,857         60,124        42,431
                                        ----------     ----------     ----------

    TOTAL LIABILITIES & STOCKHOLDERS'
      EQUITY                            $   92,324     $  151,992     $ 128,776
                                        ==========     ==========     ==========


     The accompanying notes are an integral part of the financial statements.

                                       2

<PAGE>


                              MORGAN PRODUCTS LTD.
                         Consolidated Income Statements
                    ($000, except earnings per share amounts
                             and shares outstanding)


                                                 For the Three Months Ended
                                                ----------------------------
                                                  April  4,        April  5,
                                                    1998             1997
                                                -----------      -----------
                                                (Unaudited)      (Unaudited)

Net sales                                       $   80,154       $   95,805

Cost of goods sold                                  68,627           78,381
                                                -----------      -----------
    Gross profit                                    11,527           17,424
                                                -----------      -----------
Operating expenses:
    Sales & marketing                                9,659           10,635
    General & administrative                         2,949            3,894
    Restructuring & reorganization                       0            3,610
                                                -----------      -----------
         Total                                      12,608           18,139
                                                -----------      -----------
Operating income (loss)                             (1,081)            (715)
                                                -----------      -----------
Other income (expense):
    Interest                                          (554)          (1,236)
    Other                                               87               49
                                                -----------      -----------
         Total                                        (467)          (1,187)
                                                -----------      -----------
Loss before income taxes                            (1,548)          (1,902)

Provision for income taxes                              30               30
                                                -----------      -----------
Net loss                                        $   (1,578)      $   (1,932)
                                                ===========      ===========
Basic earnings per common share                 $    (0.15)      $    (0.19)
                                                ===========      ===========
Diluted earnings per common share               $    (0.15)      $    (0.19)
                                                ===========      ===========
Basic shares outstanding                        10,358,114       10,152,111
                                                ===========      ===========
Diluted shares outstanding                      10,358,114       10,152,111
                                                ===========      ===========


   The accompanying notes are an integral part of the financial statements.

                                       3

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                              MORGAN PRODUCTS LTD.
                      Consolidated Statements of Cash Flows
                                  ( $ 000 ' s )

                                                   For the Three Months Ended
                                                  ----------------------------
                                                     April 4,         April 5,
                                                       1998             1997
                                                  -----------      -----------
                                                  (Unaudited)      (Unaudited)
CASH GENERATED (USED) BY OPERATING ACTIVITIES:
  Net loss                                        $   (1,578)      $   (1,932)
  Add (deduct) noncash items included in income:
    Depreciation and amortization                        495            1,060
    Provision for  doubtful accounts                      13               20
    Other                                                  0               58
  Cash (used) generated by changes in components
    of working capital, net of effects of 
    acquisition of business:
    Accounts receivable                               (4,576)          (7,841)
    Inventories                                        4,559           (1,879)
    Assets held for sale                                 579                0
    Accounts payable                                  (1,314)          (3,397)
    Other working capital                             (6,340)          (1,920)
                                                  -----------      -----------

NET CASH GENERATED (USED) BY OPERATING ACTIVITIES     (8,162)         (15,831)
                                                  -----------      -----------

CASH GENERATED (USED) BY INVESTING ACTIVITIES:
  Acquisition of property, plant, & equipment           (204)            (996)
  Acquisition of Tennessee Building Products               0           (2,160)
  Proceeds from disposal of property, plant, & 
  equipment                                                0                3
  Proceeds from sale of manufacturing operations      31,706                0
  Acquisition of other assets, net                      (253)             (71)
                                                  -----------      -----------

NET CASH GENERATED (USED) BY INVESTING ACTIVITIES     31,249           (3,224)
                                                  -----------      -----------

CASH GENERATED (USED) BY FINANCING ACTIVITIES:
  Net change in short-term debt                          376              395
  Proceeds from long-term debt                             0           18,189
  Repayments of long-term debt                       (27,054)            (237)
  Common stock issued for cash                             4               15
  Other                                                   53                0
                                                  -----------      -----------

NET CASH GENERATED (USED) BY FINANCING ACTIVITIES    (26,621)          18,362
                                                  -----------      -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS             (3,534)            (693)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                  4,197            1,467
                                                  -----------      -----------

  End of period                                   $      663       $      774
                                                  ===========      ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
    Interest                                      $    1,106       $    1,524
    Income taxes                                        (115)              43


   The accompanying notes are an integral part of the financial statements.

                                       4

<PAGE>


                              MORGAN PRODUCTS LTD.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE PERIOD ENDED APRIL 4, 1998


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS - Morgan Products Ltd. (the "Company") distributes
products (virtually all considered to be millwork) to the residential and light
commercial building materials industry for new construction and improvements,
maintenance and repairs. As further discussed in Note 2, the Company sold
substantially all of the operating assets of Morgan Manufacturing
("Manufacturing") on February 2, 1998.

CONSOLIDATION - The consolidated financial statements include the accounts of
all business units of the Company . All intercompany transactions, profits and
balances are eliminated.

BASIS OF PRESENTATION - The financial statements at April 4, 1998 and April 5,
1997, and for the three months then ended, are unaudited; however, in the
opinion of management, all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the financial position at these
dates and the results of operations and cash flows for these periods have been
included. The results for the three months ended April 4, 1998 are not
necessarily indicative of the results that may be expected for the full year or
any other interim period.

EARNINGS PER SHARE - During the fourth quarter of 1997, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" and retroactively restated prior period earnings per share. SFAS No. 128
required the Company to report both basic earnings per share, which is based on
the weighted-average number of common share outstanding, and diluted earnings
per share, which is based on all dilutive potential common shares outstanding.
Options to purchase 825,000 and 893,166 shares of common stock were outstanding
at April 4, 1998 and April 5, 1997, respectively, but were not included in the
computation of diluted shares because the effect of including such options would
have been antidilutive to the net loss.

RECLASSIFICATION - Certain amounts in the prior periods financial statements
have been reclassified to conform with the classifications used in the current
period.


                                       5

<PAGE>



NOTE 2 - SALE OF MANUFACTURING OPERATIONS

      In December 1997, the Company reached an agreement in principle to sell
the operating assets of Manufacturing in Oshkosh, Wisconsin to JELD-WEN, inc.
for $38.5 million, subject to certain post-closing adjustments. Based on the
proposed terms of the sale, the Company recorded a pre-tax charge in the fourth
quarter of 1997 amounting to $12.4 million including $6.8 million to adjust the
carrying value of Morgan Manufacturing's assets to their estimated fair market
value and a provision for anticipated closing costs of $5.6 million. On February
2, 1998, the Company completed the sale. All proceeds were used to retire the
acquisition term loan and to reduce the revolving credit facility.

      The following unaudited pro forma results of operations assume that the
sale occurred as of January 1, 1997 ( in thousands except per share amounts):

                                                      Three Months Ended
                                                  ----------------------------
                                                     April 4,         April 5,
                                                       1998             1997

      Net sales                                      $80,154          $76,523
      Net income (loss)                               (1,578)              59
      Basic earnings per common share                  (0.15)            0.01
      Diluted earnings per common share                (0.15)            0.01

      The pro forma financial information is not necessarily indicative of the
operating results that would have occurred had the sale of Manufacturing been
consummated as of January 1, 1997, nor is it necessarily indicative of future
operating results.

NOTE 3 - INVENTORIES

Inventories consisted of the following at (in thousands of dollars):

                          April 4, 1998       April 5, 1997    December 31, 1997
                          -------------       -------------    -----------------
                           (unaudited)         (unaudited)

Raw material                     $1,815             $13,297            $ 2,016
Work-in-process                       0               9,711                  0
Finished goods                   34,159              52,554             38,517
                                -------             -------            -------
                                $35,974             $75,562            $40,533
                                =======             =======            =======

Inventories are valued at the lower of cost or market. Cost is determined on the
first-in, first-out (FIFO) method.

                                       6

<PAGE>



NOTE 4 - RESTRUCTURING AND REORGANIZATION

      Since 1994, the Company has adopted a comprehensive strategic plan to
restore profitability and regain industry leadership by providing customers with
quality products and optimum service at the best price/value relationship. The
Company has taken a series of major initiatives to implement this plan and
respond to continuing challenges in the industry.

      In the first quarter of 1997, the Company recorded a restructuring charge
of $2.5 million for excessive costs incurred as a consequence of the
consolidation of manufacturing operations and the delayed start-up of the new
high-speed door manufacturing line. Additionally, the Company recorded a $1.1
million reorganization charge in connection with the termination of the
employment of the Chief Financial Officer and Senior Vice President-Human
Resources and Administration of the Company. These expenses were charged to
operations as incurred. Additional aggregate restructuring expenses of $2.2
million were recorded in the second quarter of 1997.

NOTE 5 - CREDIT AGREEMENT

      On February 3, 1998, in connection with the sale of Manufacturing, the
Company and their bank group entered into an amended and restated credit
agreement which provides for a revolving credit facility of up to $65 million,
including a sub-line of up to $30 million for permitted acquisitions, and a
letter of credit facility of up to $5 million. Borrowings under the facility
bear interest at either the bank's prime rate plus a margin or LIBOR plus a
margin based upon a pricing matrix and expires on February 1, 2001. The facility
contains certain covenants, including limitations on the acquisition and
disposition of assets, the payment of dividends, and the prepayment of other
indebtedness. In addition, the Company is required to maintain earnings
coverage, interest coverage and fixed charge coverage ratios. On April 20, 1998,
the Company and the bank group entered into an amendment altering the
restrictive covenants under the agreement. The amendment has terms similar to
those previously in effect or more favorable to the Company. At April 4, 1998,
the Company had borrowings of $24.6 million under the revolving credit facility.

                                       7

<PAGE>



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

Forward Looking Statements

      Various statements made within this Management's Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in this Quarterly
Report on Form 10-Q constitute "forward looking statements" for purposes of the
Securities and Exchange Commission's "safe harbor" provisions under the Private
Securities Litigation Reform Act of 1995 and under the Securities Exchange Act
of 1934. Investors are cautioned that all forward looking statements involve
risks and uncertainties, including those detailed in the Company's filings with
the Securities and Exchange Commission. There can be no assurance that actual
results will not differ from the Company's expectations. Factors which could
cause materially different results include, among others, changes in
relationships with important suppliers and key customers; the pace of
acquisitions; fluctuations in the price of raw materials; and competitive and
general economic conditions, such as housing starts.

Results of Operations

Three Months Ended April 4, 1998 vs.
Three Months Ended April 5, 1997

      The Company's net sales for the first quarter of 1998 were $80.2 million,
representing a 16.3% decrease from the same period in 1997, when sales were
$95.8 million. The $15.6 million decrease in sales is primarily attributable to
a $19.3 million decrease in sales at Manufacturing as a result of the sale of
its operating facility during December 1997. The disposal of Manufacturing was
offset by an increase in sales at Morgan Distribution ("Distribution") of $4.1
million, as a result of the addition of the Baton Rouge distribution center, the
acquisition of Wahlfeld Manufacturing Company ("Wahlfeld") and sales growth at
the Kansas City and Wilmington distribution centers.

      The gross profit decline for the first quarter of 1998 of $5.9 million
from the first quarter of 1997 is due primarily to the sale of Manufacturing and
a shift to lower margin direct business and market price pressure at
Distribution. In addition, in the first quarter of 1997 the Company received a
volume incentive reward from a supplier partnership program which was not
received in the first quarter of 1998.

      Operating expenses for the first quarter of 1998 were $12.6 million, or
15.7% of net sales compared to operating expenses in the first quarter of 1997
of $18.1 million, or 18.9% of net sales. The decrease is primarily due to the
elimination of restructuring and reorganization charges incurred in the prior
year and the sale of Manufacturing.

      The provision for income taxes in each of the first quarters of 1998 and
1997 relates to the recording of state taxes. There was no provision for federal
taxes in either period given the Company's net operating loss position.

      For the first quarter of 1998, the Company reported a net loss of $1.6
million or $0.15 per share compared to a net loss of $1.9 million or $0.19 per
share for the same period in 1997, on diluted shares outstanding of 10,358,114
and 10,152,111, respectively. The $.3 million decrease in net loss is primarily
a result of a $.7 million decrease in interest expense and the elimination of
restructuring and reorganization charges offset by the elimination of a volume
incentive reward from a supplier partnership program. The decrease in interest
expense was due to the $24.7 million decrease in average long-term debt in the
1998 first quarter from the same period in 1997 which was a result of the
proceeds received from the sale of Manufacturing.

                                       8

<PAGE>



Significant Business Trends/Uncertainties

      Management believes that single family housing starts and residential
remodeling expenditures have a significant influence on the Company's level of
business activity. Currently the National Association of Home Builders forecast
that housing starts for single family dwellings are to remain steady in
comparison to 1997, the third highest level in the last 10 years, and that
residential remodeling spending is to increase 4.2% over the prior year. No
assurances can be given, however, that housing start levels will remain steady,
or that single family housing starts will not decline.

      Management also believes that the Company's ability to continue to
penetrate the residential repair and remodeling markets through sales to home
center chains may have a significant influence on the Company's level of
business activity. Management believes this market will continue to grow in
importance to the Company. Management further believes that in certain areas of
the United States, sales by distributors directly to the end-user may over time
replace, as the primary channel of distribution, the distribution method of
selling to the retail dealer, who then sells to the end-user. The Company
intends to respond aggressively to such changes in distribution methods,
including, where opportunities permit, through the acquisition of distribution
businesses that sell directly to the end-user.

Strategic Initiatives

      An important part of the Company's strategic plan is to expand its
distribution capabilities, particularly in the Southeast and Southwest, or in
other areas, if attractive opportunities are presented. In August 1996, the
Company acquired substantially all of the business and assets of TBP, a regional
millwork and specialty building products distributor and light manufacturer
headquartered in Nashville, Tennessee. With the TBP acquisition, the Company
expanded its operations to include Nashville and Chattanooga, Tennessee;
Charlotte, North Carolina; Greenville, South Carolina; and Huntsville, Alabama.
In July 1997, the Company acquired certain assets of Wahlfeld, a distributor of
windows, doors, and other millwork products headquartered in Peoria, Illinois.
The Company consolidated Wahlfeld's operation into two of its existing
facilities.

      With the February 2, 1998 sale of Manufacturing, Company debt was reduced
by half. The Company entered into a new credit facility with its bank group
which includes a $30.0 million revolving credit sub-line for permitted
acquisitions. This additional capital will provide funding for the strategic
plan described above.

      In 1996, Andersen determined to sell its Fibrex window systems through
Renewal by Andersen retail stores. Fibrex is a proprietary material developed by
Andersen that is made of a composite of wood fibers and vinyl and is considered
to be superior in certain characteristics to pure vinyl core window systems. The
Renewal by Andersen store (which is aimed at the replacement window buyer) is
devoted exclusively to the promotion and sale of such systems, with the stores
being established in various areas throughout the country and principally owned
and operated by independent distributors. The Company opened one of the first
such stores in Overland Park, Kansas which has performed at lower than expected
levels. As of April 4, 1998, the Company has not opened any additional Renewal
by Anderson retail stores.

      The Company believes that its relationship with Andersen has improved in
recent years. In April 1997, the Company entered the Louisiana market where it
was awarded sole distribution rights for Andersen's products. In 1997, the
Company was also awarded sole distribution for Andersen's products in most
counties in Mississippi and some in Texas.

      As the final major element of its strategic initiatives, the Company is
committed to improving its management information systems. A new Company-wide
integrated management information system has been selected and is being
implemented. The Company approved total capital expenditures of $3.4 million for
the new management information system project, which has been financed through a

                                       9

<PAGE>



combination of capital leases and borrowings under the Company's revolving line
of credit. As of April 4, 1998, the Company has incurred a cost of approximately
$3.3 million for the management information system. Upon completion of this
project, the Company will have achieved significant progress in meeting its goal
of being the industry leader in customer-friendly order processing and
fulfillment systems. Management believes that the final implementation of the
project will be completed in 1999.

Year 2000 Issues

      The Company has investigated the extent to which its computer operations
are subject to Year 2000 issues. The Company has assessed the measures it
believes will be necessary to avoid any material disruption to its operations
relating to Year 2000 complications in the Company's computers. The Company is
currently implementing a Company-wide integrated management information system
that is Year 2000 compatible. Management believes that the cost to the Company
of the necessary modifications and upgrades to the Company's computer systems,
not including the costs of implementing the new management information system,
will not be material. The Company has not conducted a detailed investigation of
the Year 2000 readiness of its material suppliers. It is uncertain whether such
suppliers will be prepared fully for Year 2000 issues. Based on inquiries it has
received from many of its largest customers, management believes such customers
are assessing their Year 2000 issues. There can be no assurances, however, that
none of the Company's customers will have a Year 2000 issue that adversely
affects the Company.


Liquidity and Capital Resources

      The Company's working capital requirements are related to its sales level,
which, because of its dependency on housing starts and the repair and remodeling
market, are seasonal and, to a degree, weather dependent. This seasonality
affects the need for working capital inasmuch as it is necessary to carry larger
inventories and receivables during certain months of the year.

      Working capital at April 4, 1998 was $50.1 million, with a ratio of
current assets to current liabilities of 3.4 to 1.0, while at December 31, 1997
working capital was $77.3 million with a ratio of current assets to current
liabilities of 3.7 to 1.0. The decrease in working capital is primarily due to
the sale of Manufacturing which resulted in a net decrease of $29.2 million. In
addition, inventories decreased $4.6 million which is a continuation of the
Company-wide plan to reduce working capital and interest on long-term debt,
accounts payable decreased by $1.3 million due to the sale of Manufacturing and
accounts receivable increased by $4.6 million due to seasonality.

      Long-term debt, net of cash, decreased to $29.8 million at April 4, 1998,
from $53.2 million at December 31, 1997. The Company's ratio of long-term debt,
net of cash, to total capitalization decreased from 55.6% at December 31, 1997
to 42.2% at April 4, 1998. The decrease in long-term debt of $23.4 million is
primarily attributable to the fact that the Company used the proceeds from the
Manufacturing sale to reduce the Company's revolving credit facility and to
repay the Company's acquisition term loan.

      Cash used by operating activities totaled $8.2 million for the three
months ended April 4, 1998, as compared to $15.8 million used for the three
months ended April 5, 1997. The decrease was primarily due to accounts
receivable as at April 4, 1998 increased $3.3 million from accounts receivable
as at April 5, 1997 primarily due to the elimination of Manufacturing's seasonal
increase in receivables. Inventory as at April 4, 1998 increased $6.4 million
over inventory as at April 5, 1997 primarily due to reductions at Distribution.
In the first quarter of 1998, accounts payable, assets held for sale and other
working capital used $1.8 million more than first quarter 1997 primarily due to
the sale of Manufacturing. Investing activities in the first three months of
1998 generated $31.2 million, compared to the corresponding period in 1997, when
investing activities used $3.2 million. Activities in 1998 included $31.7
million in proceeds from the sale of Manufacturing and $.5 million used for
asset acquisitions, while 1997 activities consisted of $1.1 million used for
asset acquisitions and $2.2 for the final payment to purchase TBP. Financing
activities used $26.6 million through April 4, 1998, with $27.1 million used

                                       10

<PAGE>



to reduce long-term debt and $.4 million by short-term financing. Of the
reduction of long-term debt, $20.7 million was used to reduce the revolving line
of credit, $4.8 million was used to retire the acquisition term loan, $1.3
million was used to retire the Industrial Revenue Bond, and $.3 was used for
principal payments under capital lease obligations. The $45.0 million difference
in the financing requirements from first quarter 1998 and the comparable period
in 1997 is primarily due to the sale of Manufacturing in 1998.

      On February 3, 1998, in connection with the sale of Manufacturing, the
Company and its bank group entered into an amended and restated credit agreement
which provides for a revolving credit facility of up to $65 million, including a
sub-line of up to $30 million for permitted acquisitions, and a letter of credit
facility of up to $5 million. Borrowings under the facility bear interest at
either the bank's prime rate plus a margin or LIBOR plus a margin based upon a
pricing matrix and expires on February 1, 2001. The facility contains certain
covenants, including limitations on the acquisition and disposition of assets,
the payment of dividends, and the prepayment of other indebtedness. In addition,
the Company is required to maintain earnings coverage, interest coverage and
fixed charge coverage ratios. On April 20, 1998, the Company and the bank group
entered into an amendment altering the restrictive covenants under the
agreement. The amendment has terms similar to those previously in effect or more
favorable to the Company. At April 4, 1998, the Company had borrowings of $24.6
million under the revolving credit facility.


Restructuring of Operations


      Since 1994, the Company has adopted a comprehensive strategic plan to
restore profitability and regain industry leadership by providing customers with
quality products and optimum service at the best price/value relationship. The
Company has taken a series of major initiatives to implement this plan and
respond to continuing challenges in the industry.

      In 1994 and 1995, the Company incurred $11.3 million and $51,000 in
restructuring charges, respectively, to cover the costs of closing the Company's
Springfield, Oregon door and Weed, California veneer plants, the downsizing of
Manufacturing, Company-wide management restructure charges (including
terminations and the elimination of certain positions), the restructuring of
Distribution operations, the relocation of the Company's corporate headquarters,
and other cost reduction and consolidation actions. In the second quarter of
1996, the Company sold its Lexington, North Carolina door manufacturing
facility. The entire line of doors, previously manufactured in Lexington, was
shifted to the Company's Oshkosh door manufacturing facility. The Company
recorded restructuring charges in 1996 of $4.7 million, primarily related to the
sale of the Lexington facility and the consolidation of door manufacturing
operations into the Oshkosh facility.

      In 1997, the Company recorded an additional restructuring charge of $4.7
million for excessive costs incurred as a consequence of the consolidation of
manufacturing operations and the delayed start-up of the new high-speed door
manufacturing line. Additionally, the Company recorded a $1.1 million
reorganization charge in 1997 in connection with the termination of the
employment of the Vice President and Chief Financial Officer and Senior Vice
President-Human Resources and Administration of the Company. Such provision is
to cover severance and related payments to such officers.

      Although Manufacturing had made progress operationally in the first half
of 1997, the Company determined that Manufacturing was not a strategic fit with
its long-term growth plans. In December 1997, the Company reached an agreement
in principle to sell the operating assets of Manufacturing to JELD-WEN, inc. The
sale was completed on February 2, 1998. The sale resulted in a charge to
earnings of $12.4 million with half the charge related to an asset write-down
and half related to the costs of selling the business including employee
severance costs, pension expenses, lease obligations and legal costs.

                                       11

<PAGE>



                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      10.1  First Amendment to Amended and Restated Loan and Security Agreement,
            dated April 20, 1998, among the Company, the lender parties thereto
            and Fleet Capital Corporation as agent for the lenders, dated as
            February 3, 1998.

      10.2  Option agreement between the Company and Duane Greenly dated as of
            December 18, 1996.

      10.3  Amendment to the option agreement, dated January 31, 1998, between
            the Company and Duane Greenly dated as of December 18, 1996.

     *10.4  Supply agreement dated February 2, 1998 between JELD-WEN, inc. and
            the Company.

      27    Financial Data Schedule

(b)   Two reports on Form 8-K were filed during the quarter

1.    A Current Report on Form 8-K was filed by the Company on February 10, 1998
      with respect to the sale of substantially all of the assets of Morgan
      Manufacturing to JELD-WEN, inc (Commission File No. 1-9843).

2.    An Amendment on Form 8-K/A to the Current Report on Form 8-K filed on
      February 10, 1998, was filed by the Company with the respect to the sale
      of substantially all of the assets of Morgan Manufacturing to
      JELD-WEN,inc. on March 24, 1998 to include the unaudited pro forma
      combined financial statements (Commission File No. 1-9843).




*     Not filed herewith. Confidential treatment requested pursuant to Rule
      24b-2 of the Securities Exchange Act of 1934.

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<PAGE>


                                   Signatures


      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.


                                               MORGAN PRODUCTS LTD.





Date: April 28, 1998                           By:  /s/ Mitchell J. Lahr
                                                    -------------------------
                                                    Mitchell J. Lahr
                                                    Vice  President,  Secretary
                                                    and Chief Financial Officer
                                                    (For the Registrant and as
                                                    Principal Finance Officer)







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