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                                   FORM 10-Q/A

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)

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

                  For the Quarterly Period Ended April 5, 1997

                                       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 May 14, 1997 was 10,153,120; 2,386 shares are held in treasury.

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                                  Page 1 of 14
<PAGE>
<TABLE>
<CAPTION>
                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                              MORGAN PRODUCTS LTD.
                           Consolidated Balance Sheets
                        ($000 Except Shares Outstanding)

                                                             April  5,         March  30,         December  31,
                                                               1997               1996                1996
                                                           -----------        -----------         -------------
                                                           (Unaudited)        (Unaudited)
                 ASSETS
<S>                                                        <C>                 <C>                   <C>      
CURRENT ASSETS:
  Cash and cash equivalents                                  $    774           $    420              $  1,467
  Accounts receivable, net                                     40,380             28,480                32,559
  Inventories                                                  75,562             52,982                73,683
  Other current assets                                          1,241              1,127                   632
                                                             --------           --------              --------
    Total current assets                                      117,957             83,009               108,341
                                                             --------           --------              --------

OTHER ASSETS                                                   10,805              4,393                10,638

PROPERTY, PLANT & EQUIPMENT, net                               23,230             23,626                23,137
                                                             --------           --------              --------
  TOTAL ASSETS                                               $151,992           $111,028              $142,116
                                                             --------           --------              --------

  LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Short-term debt                                           $     395          $     397            $        0
  Current maturities of long-term debt                          1,282                898                 1,136
  Accounts payable                                             14,148             13,070                19,449
  Accrued compensation and employee benefits                    5,847              5,223                 6,219
  Income tax payable                                                0                119                     0
  Other current liabilities                                     3,510              2,613                 4,449
                                                             --------           --------              --------
    Total current liabilities                                  25,182             22,320                31,253
                                                             --------           --------              --------

LONG-TERM DEBT                                                 66,686             36,369                48,880

STOCKHOLDERS' EQUITY:

  Common Stock, $.10 par value, 10,152,912,  8,648,136,
  and 10,149,816 shares outstanding, respectively               1,015                865                 1,015
  Paid-in capital                                              42,252             33,775                42,237
  Retained earnings                                            16,995             18,070                18,927
                                                             --------           --------              --------
                                                               60,262             52,710                62,179

  Treasury stock, 2,386 shares, at cost                           (48)               (48)                  (48)
  Unamortized value of restricted stock                           (90)              (323)                 (148)
                                                             --------           --------              --------
  TOTAL  STOCKHOLDERS'  EQUITY                                 60,124             52,339                61,983
                                                             --------           --------              --------
     TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                $151,992           $111,028              $142,116
                                                             ========           ========              ========

</TABLE>

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


                                  Page 2 of 14
<PAGE>
<TABLE>
<CAPTION>
                              MORGAN PRODUCTS LTD.
                         Consolidated Income Statements
                    ($000, except earnings per share amounts
                    and weighted average shares outstanding)



                                                For the Three Months Ended
                                            ---------------------------------
                                               April  5,           March  30,
                                                 1997                 1996
                                            ------------         ------------
                                            (Unaudited)           (Unaudited)
<S>                                         <C>                  <C>        
Net sales                                   $    95,805          $    74,536

Cost of goods sold                               78,381               64,038
                                            -----------          -----------

    Gross profit                                 17,424               10,498
                                            -----------          -----------

Operating expenses:
     Sales & marketing                           10,635                8,088
     General & administrative                     3,894                2,437
     Restructuring                                2,510                    0
     Reorganization                               1,100                    0
                                            -----------          -----------
         Total                                   18,139               10,525
                                            -----------          -----------

Operating income (loss)                            (715)                 (27)
                                            -----------          -----------
Other income (expense):
     Interest                                    (1,236)                (593)
     Other                                           49                   80
                                            -----------          -----------
         Total                                   (1,187)                (513)
                                            -----------          -----------

Income (loss) before income taxes                (1,902)                (540)

Provision for income taxes                           30                   19
                                            -----------          -----------
Net income (loss)                           $    (1,932)         $      (559)
                                            ===========          ===========

Income (loss) per share                     $     (0.19)         $     (0.06)
                                            ===========          ===========

Weighted average number of  
   common shares outstanding                 10,152,111            8,647,871
                                            ===========          ===========

</TABLE>

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


                                  Page 3 of 14

<PAGE>
<TABLE>
<CAPTION>
                              MORGAN PRODUCTS LTD.
                    Consolidated Statements of Cash Flows
                                  ( $000 ' s )

                                                                                    For the Three Months Ended
                                                                              --------------------------------------
                                                                                April 5,                March  30,
                                                                                  1997                     1996
                                                                              -----------              -----------
                                                                              (Unaudited)              (Unaudited)
<S>                                                                           <C>                     <C>        
CASH GENERATED (USED) BY OPERATING ACTIVITIES:
  Net  (loss)  income                                                         $    (1,932)            $     (559)
  Add (deduct) noncash items included in income:
     Depreciation and amortization                                                  1,060                    886
     Provision  for  doubtful  accounts                                                20                     14
     Other                                                                             58                     59
  Cash (used) generated by changes in  components of working
     capital, net of effects of acquisition of business:
     Accounts receivable                                                           (7,841)                (7,693)
     Inventories                                                                   (1,879)                   440
     Accounts payable                                                              (3,397)                 1,949
     Other working capital                                                         (1,920)                  (953)
                                                                              -----------              ---------
NET CASH GENERATED (USED) BY OPERATING ACTIVITIES                                 (15,831)                (5,857)
                                                                              -----------              ---------

CASH GENERATED (USED) BY INVESTING ACTIVITIES:
  Acquisition of property, plant, & equipment                                        (996)                  (914)
  Acquisition of Tennessee  Building  Products                                     (2,160)                     0
  Proceeds from disposal of property, plant, & equipment                                3                     26
  Proceeds  from  surrender of life insurance policies                                  0                    862
  Acquisition of other assets, net                                                    (71)                   (17)
                                                                              -----------              ---------
NET CASH GENERATED (USED) BY INVESTING ACTIVITIES                                  (3,224)                   (43)
                                                                              -----------              ---------
CASH GENERATED (USED) BY FINANCING ACTIVITIES:
  Net change in short-term debt                                                       395                    397
  Proceeds from long-term  debt                                                    18,189                    952
  Repayments of long-term  debt                                                      (237)                  (152)
  Common stock issued for cash                                                         15                      4
  Other                                                                                 0                    (16)
                                                                              -----------              ---------
NET CASH GENERATED (USED) BY FINANCING ACTIVITIES                                  18,362                  1,185
                                                                              -----------              ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                            (693)                (4,715)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                                               1,467                  5,135
                                                                              -----------              ---------
  End of period                                                               $       774              $     420
                                                                              ===========              =========
Supplemental Disclosures of Cash Flow Information:
  Cash paid during the year for:
     Interest                                                                 $     1,524              $     854
     Income taxes                                                                      43                     11

</TABLE>

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


                                  Page 4 of 14

<PAGE>
                              MORGAN PRODUCTS LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE PERIOD ENDED APRIL 5, 1997


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS - Morgan Products Ltd. (the "Company")  manufactures and
purchases products  (virtually all of which are considered to be millwork) which
are sold to the residential and light commercial building materials industry and
are used for both new construction and improvements, maintenance and repairs. In
view of the nature of its  products and the method of  distribution,  management
believes that the Company's business constitutes a single industry segment.

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

BASIS OF PRESENTATION - The financial  statements at April 5, 1997 and March 30,
1996,  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  5,  1997  are not
necessarily  indicative of the results that may be expected for the full year or
any other interim period.

EARNINGS  PER  SHARE - The  Financial  Accounting  Standards  Board  has  issued
Statement of Financial Accounting Standards No.128,  "Earnings per Share" ("SFAS
128"). SFAS 128 replaces primary EPS with basic EPS, which excludes dilution and
requires  presentation  of both basic and  diluted EPS on the face of the income
statement.  Diluted EPS is computed  similarly to the current fully diluted EPS.
SFAS 128 is effective for financial  statements  issued for periods ending after
December  15,  1997,  and  requires  restatement  of all  prior-period  EPS data
presented.  The adoption of this statement is not expected to materially  affect
either future or prior-period EPS.



                                  Page 5 of 14

<PAGE>

NOTE 2 - INVENTORIES

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


                  April 5, 1997          March 30, 1996        December 31, 1996
                  -------------          --------------        -----------------
                   (unaudited)             (unaudited)



Raw material          $13,297                $ 9,234                  $14,139

Work-in-process         9,711                  6,607                    9,899

Finished goods         52,554                 37,141                   49,645
                      -------                -------                  -------
                      $75,562                $52,982                  $73,683
                      =======                =======                  =======


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


NOTE 3 - PROVISION FOR RESTRUCTURING AND REORGANIZATION

In 1994, the Company recorded an $11.3 million restructuring charge to cover the
cost of closing the  Springfield,  Oregon  plant,  the Weed,  California  veneer
operation,  and to provide other cost reductions and  consolidations  within the
Company.  At  such  time,  a  multi-year  plan  involving  necessary  management
structure  changes,  a new management  information  system,  and future facility
requirements was developed.

During 1995, the Company reviewed the restructuring  reserves established in the
1994  restructuring  and determined that certain estimated costs would not be as
high as had been expected and adjusted the reserve appropriately.  At that time,
certain other cost reduction and restructuring  actions for Morgan  Distribution
were approved and provided for, which offset the lower expenses.

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,  Wisconsin  door  manufacturing
facility. The Company recorded an additional  restructuring charge in the second
quarter  of 1996 of  $881,000,  of which  $356,000,  related  to the sale of the
Lexington facility and the consolidation of door  manufacturing  operations into
the Oshkosh  facility,  and the  balance of which was used to cover  incremental
costs related to the Springfield and Weed plant closings and the  reorganization
of the  management  structure  at  Morgan  Manufacturing.  Additional  aggregate
restructuring  expenses of $3.8  million  were  recorded in the third and fourth
quarters  of  1996.  These  restructuring  expenses,  which  included  Lexington
operating costs after cessation of production and incremental hiring,  training,
and relocation  costs  associated  with the transfer of Lexington  production to
Oshkosh were expensed as incurred.

In the first quarter of 1997, the Company  recorded an additional  restructuring
charge of $2.5 million for  excessive  costs  incurred as a  consequence  of the
consolidation of manufacturing operations and a delay in the start-up of the new
high-speed  door assembly  line. The equipment has been installed and management
believes that the line should be functioning at a normal  capacity by June 1997.
At April 5, 1997, the restructuring  reserve balance was $.9 million as compared
to $1.1 million at December 31, 1996.

Additionally,  the Company recorded a $1.1 million  reorganization charge in the
first quarter of 1997 in connection  with the  termination  of the employment of
the Chief  Financial  Officer  and Senior  Vice  President-Human  Resources  and
Administration  of the Company.  At April 5, 1997,  the  reorganization  reserve
balance was $1.1 million.


                                  Page 6 of 14

<PAGE>

NOTE 4 - CREDIT AGREEMENT

The Company  maintains a credit agreement with a bank group which provides for a
revolving credit facility of up to $65 million through July 13, 1998,  including
a letter of credit  facility of up to $9 million.  On each of March 13, 1997 and
May 16, 1997, the Company and the bank group entered into an amendment  altering
the restrictive covenants under the credit Agreement.  The amendments have terms
similar to those previously in effect or more favorable to the Company. At April
5, 1997, the Company had borrowings of $59.4 million under the revolving  credit
facility.  The credit  agreement  requires the Company,  among other things,  to
maintain minimum  tangible net worth and interest  coverage ratios and a maximum
leverage ratio.



                                  Page 7 of 14

<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 Amendment to
Quarterly  Report on Form 10-Q/A  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 Rule 3b-6 under
the  Securities  Exchange Act of 1934, as amended.  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, the success of consolidation of manufacturing operations;  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 5, 1997 vs.
Three Months Ended March 30, 1996

The  Company's  net sales  for the first  quarter  of 1997 were  $95.8  million,
representing  a 28.5%  increase  over the same  period in 1996,  when sales were
$74.5 million.  $12.6 million of the increase is attributable to the acquisition
of Tennessee  Building  Products  ("TBP").  The remainder is a reflection of the
18.6%  quarter-over-quarter  improvement in the sales of  distributed  products,
which  management  believes is primarily the result of an increase in the number
of shipping  days in the first quarter of 1997 as compared to the same period in
1996 and an increase in marketing efforts of the Company in partnership with key
suppliers.  Sales of  manufactured  products for the first  quarter of 1997 were
lower than sales of manufactured products for the same period in 1996 by 1.4% or
$361,000   primarily  as  a  consequence  of  the   disruption   caused  by  the
consolidation  of the  Lexington,  North Carolina  operations  into the Oshkosh,
Wisconsin facility and the delay in start-up of the new high-speed door assembly
line.

For the first quarter of 1997,  the Company  reported a net loss of $1.9 million
or $0.19 per share compared to a net loss of $559,000 or $0.06 per share for the
same period in 1996, on average shares  outstanding of 10,152,111 and 8,647,871,
respectively.  Included in the results for the first  quarter of 1997 are a $2.5
million restructuring charge to cover the incremental costs of consolidating the
Lexington and Oshkosh manufacturing facilities and a $1.1 million reorganization
charge  related to changes in executive  management  of the  Company.  Excluding
these restructuring and reorganization  charges,  the Company had income of $1.7
million for the first quarter of 1997. The increase in income,  exclusive of the
restructuring  and  reorganization  charges,  was  primarily  the  result of the
acquisition  of TBP,  the higher  sales volume of  distributed  products,  and a
volume incentive reward from a supplier partnership program.

The gross profit  increase of $6.9 million from the first quarter of 1996 to the
corresponding  period of 1997 was primarily  the result of the TBP  acquisition,
sales volume gains,  and supplier  incentive,  plus cost reductions and material
cost improvements at both the distribution and manufacturing units.

Operating  expenses for the first quarter of 1997,  excluding the  restructuring
and reorganization  charges,  were $14.5 million or 15.2% of net sales, compared
to 1996 first  quarter  operating  expenses  of $10.5  million,  or 14.1% of net
sales.  The  increases in operating  expenses was  primarily  related to the TBP
acquisition, increased sales commissions, and greater employment costs.

                                  Page 8 of 14

<PAGE>

The  provision  for income taxes in both first  quarter 1997 and 1996 relates to
the recording of state taxes. The provisions for federal taxes in each period is
offset by the Company's net operating loss position.

Significant Business Trends/Uncertainties

Management  believes  that housing  starts have a  significant  influence on the
Company's  level of  business  activity.  According  to U.S.  Bureau  of  Census
statistics,  single  family  housing  starts in 1996 were 10.1%  higher than the
average for the prior  five-year  period.  The Wall Street  Journal has recently
reported  that the sale of new single  family homes in the first quarter of 1997
were the highest for any quarter since 1978.  F.W.  Dodge has also reported that
housing  starts  for  February  1997 in the  Midwest,  where the  Company  has a
significant  percentage  of its  sales,  represented  the  strongest  seasonally
adjusted  monthly rate since early 1987.  No assurances  can be given,  however,
that any  improvement  in the level of housing  starts  will  continue,  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.

In the past, raw material prices have fluctuated  substantially for pine and fir
lumber.  Fir prices  reached a high in the first  quarter  of 1995 and  remained
within 5% of that level until the fourth quarter of 1996. The average price paid
for fir lumber in the 1997  first  quarter is nearly 20% below the price for the
last  quarter of 1996.  This  benefit  was more than offset by the price of pine
lumber, which is currently at the highest level since the first quarter of 1994.
In  addition,  oak prices  have risen to their  highest  level in at least three
years.  During the first quarter of 1997 costs for oak lumber were more than 30%
greater  than for the last quarter of 1996.  Such  increases in the price of raw
materials  has  resulted in reduced  profit  margins.  As a result,  the Company
continues  its  efforts  to  expand  the  utilization,   where  appropriate,  of
engineered  materials in wood door  components  and to switch to alternate  wood
species.  In addition,  the Company has established new offshore  sources of raw
material. Management believes that these actions, together with aggressive price
increases where  competitive  factors allow, will partially offset the impact of
the high cost of raw material.

In order to expand its capacity and to meet anticipated demand and to reduce its
cost of  production,  the Company has installed a new  high-speed  door assembly
line at its Oshkosh  facility.  Delivery  and  installation  of the new line was
completed  during the first quarter of 1997.  The new  high-speed  door assembly
line is  operational;  however,  the new  line is not yet  operating  at  normal
capacity. Management currently believes that the line should be functioning at a
normal  capacity by June 1997. A performance  shortfall could have a detrimental
impact, both on the short-term profitability of the Company and on its long-term
ability to service and retain key customers.  Lead-times for standard items rose
from three weeks to eight weeks after the  cessation of operations in Lexington,
North Carolina.  Lead-times on certain special items were significantly  longer.
Management  believes that the  efficient  operation of the new  high-speed  door
assembly  line is critical  to  reducing  lead-times  to  acceptable  levels and
satisfying customers.

An important part of the Company's  strategic plan is to expand its distribution
capabilities,  particularly in the Southeast and Southwest, or in other area, if
attractive  opportunities  are presented.  In August 1996, the Company  acquired
substantially all of the business and assets of Tennessee Building  Products,  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.

                                  Page 9 of 14

<PAGE>

Recently,  Andersen Corporation  ("Andersen")  determined to market and sell its
Fibrex(TM)  replacement  window systems through retail stores which are aimed at
the  replacement   window  buyer.   These  retail  stores,   called  Renewal  by
Andersen(TM)  stores,  will be devoted  exclusively to the promotion and sale of
Fibrex(TM) window systems, with the stores being established in various areas of
the country and  principally  owned and  operated by  independent  distributors.
Andersen has entered into an agreement with the Company to open one of the first
such stores in Overland  Park,  Kansas.  Such store is owned and operated by the
Company. Fibrex(TM) 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. In the event that the
Kansas   location  is   successful,   the  Company  and  Andersen  may  consider
establishing additional stores.

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 in the process
of implementation.  The Company has approved a total capital expenditure of $3.4
million  for  the new  management  information  system  project,  which  will be
financed  through a  combination  of  capital  leases and  borrowings  under the
Company's revolving line of credit. 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.

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 5, 1997 was $92.8  million,  with a ratio of  current
assets to current  liabilities of 4.7 to 1.0, while at December 31, 1996 working
capital was $77.1 million with a ratio of current assets to current  liabilities
of 3.5 to 1.0.  The  increase  in working  capital  reflects  seasonality,  with
accounts  receivable  increasing  $7.8  million in the quarter  compared to $7.7
million in the  comparable  1996  period.  In  addition,  inventories  rose $1.9
million as a consequence of the  consolidation of  manufacturing  operations and
the delay in the start-up of the new  high-speed  door assembly  line.  Accounts
payable and other  working  capital  dropped in the first  quarter of 1997 by an
aggregate  $5.3 million,  primarily as a  consequence  of the payment of accrued
bonuses  and  commissions  and a large drop in the  amount of checks  issued and
outstanding.

Long-term  debt, net of cash,  increased to $65.9 million at April 5, 1997, from
$47.4 million at December 31, 1996. The Company's  ratio of long-term  debt, net
of cash, to total  capitalization  increased  from 43.3% at December 31, 1996 to
52.3% at April 5,  1997.  The $18.5  million  increase  is  attributable  to the
aforementioned  $15.7 million change in working capital, a final payment of $2.2
million related to the acquisition of TBP, and $1.0 million of capital spending.

Cash used by operating  activities  totaled  $15.8  million for the three months
ended  April 5, 1997,  as compared to $5.9  million for the three  months  ended
March 30, 1996. Investing activities in the first three months of 1997 used $3.2
million, compared to the corresponding period in 1996, when investing activities
were cash neutral. 1997 activities included $1.0 million expended to acquire new
equipment and the final payment for the purchase of TBP,  while 1996  activities
consisted of $.9 million used for asset acquisitions and $.9 million provided by
the surrender of life insurance policies.  Financing  activities generated $18.4
million through April 5, 1997,  with $18.2 million  provided by increases in the
revolving  line of credit and $.4  million by  short-term  financing.  Cash used
during the first quarter 1997 was $.2 million for the payment of long-term debt.
During the same period in 1996, financing activities generated $1.2 million from
increased  long-term and short-term  debt.  The $17.2 million  difference in the
financing  requirements  between first quarter 1997 and the comparable period in
1996  reflects  the need to finance  the $15.8  million  cash used by  operating
activities and the aforementioned investing activities.

The Company  maintains a credit agreement with a bank group which provides for a
revolving credit facility of up to $65 million through July 13, 1998,  including
a letter of credit facility of up to $9 million.

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<PAGE>

On each of March 13,  1997 and May 16,  1997,  the  Company  and the bank  group
entered into an amendment  altering the  restrictive  covenants under the credit
agreement.  The amendments  have terms similar to those  previously in effect or
more  favorable to the Company.  At April 5, 1997, the Company had borrowings of
$59.4 million under the revolving credit facility. The credit agreement requires
the Company,  among other  things,  to maintain  minimum  tangible net worth and
interest  coverage  ratios  and a maximum  leverage  ratio.  The  Company  is in
compliance with the financial covenants under the credit agreement.

The  Company  believes  that  it may  require  additional  financing  to  pursue
attractive acquisition candidates, depending upon the size of the acquisitions.

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. At Morgan Manufacturing,  the Company has
consolidated all of its door manufacturing  operations into its Oshkosh facility
and has committed  approximately  $6 million in capital  expenditures  for a new
high-speed  door  assembly  line.  In  addition,   management  is  committed  to
controlling   manufacturing  costs,  achieving  a  substantial  savings  through
innovative raw material purchasing and manufacturing practices, and developing a
more  customer-focused   business  approach.   The  Company  believes  that  its
relationship with Andersen has improved in recent years. At Morgan Distribution,
the Company has  strengthened  its business  through a broad series of operating
initiatives  and plans to achieve  additional  growth both  through its existing
operations and by acquisition,  as opportunities permit. Primarily as the result
of  the   implementation  of  its  strategic  plan,  the  Company  has  incurred
substantial  restructuring charges. 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  Morgan  Manufacturing,   Company-wide   management
structure  changes  (including  terminations  and  the  elimination  of  certain
positions),  the  restructuring  of  the  Morgan  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,  Wisconsin  door  manufacturing
facility.  The Company recorded  restructuring charges in 1996 of $4.71 million,
primarily related to the sale of the Lexington facility and the consolidation of
door manufacturing operations into the Oshkosh facility.

Management  believes  that  with  the  installation  and  start-up  of  the  new
high-speed  door assembly line at the Oshkosh  facility,  which  occurred in the
first  quarter  of  1997,  lead  time  increases  experienced  due to  increased
production  requirements  and  related  inefficiencies  encountered  during  the
consolidation  process may be reversed and, in fact, may be reduced by up to two
weeks.  The new  high-speed  door  assembly  line is not yet operating at normal
capacity;  however, management believes that the line should be functioning at a
normal  capacity by June 1997.  When the new  high-speed  door  assembly line is
fully  operational,  management  believes  that  the  Oshkosh  facility  will be
operating  at  approximately  70% of  capacity,  based upon  current  production
levels.  It is  believed  that  the  consolidation  of  all  door  manufacturing
facilities at a single facility will offer the Company  significant cost savings
as well as provide  customers with the advantage of purchasing the full range of
solid wood door products and wood species from a single manufacturing facility.

In the first quarter of 1997, the Company  recorded an additional  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 assembly  line. The equipment has been installed and management
believes that the line should be functioning at a normal  capacity by June 1997.
The Company expects that it will incur an additional  restructuring charge of up
to $2.0 million in the second quarter of 1997 prior to the new  high-speed  door
assembly line reaching capacity. At April 5, 1997, the

                                  Page 11 of 14

<PAGE>

restructuring  reserve  balance was $.9  million as compared to $1.1  million at
December 31, 1996,  primarily due to costs incurred in connection with severance
and other employee benefit related payments.

Additionally,  the Company recorded a $1.1 million  reorganization charge in the
first quarter of 1997 in connection  with the  termination  of the employment of
the 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. At April 5, 1997, the reorganization  reserve balance
was $1.1 million.



                                  Page 12 of 14

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                                            PART II.  OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         10   Ninth Amendment to Loan and Security Agreement, dated May 16, 1997
              among the Company,  certain banks and Barclay's  Business  Credit,
              Inc. (succeeded by Fleet Capital), dated July 14, 1994.

         27  Financial Data Schedule

(b)  No Current Reports on Form 8-K were filed during the first quarter of 1997.



                                  Page 13 of 14

<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: May 22, 1997            By: /s/ Mitchell J. Lahr
                                 ---------------------
                                 Mitchell J. Lahr

                                 Vice President, Secretary and
                                 Chief Financial Officer
                                 (For the Registrant and as
                                 Principal Finance Officer)






                                  Page 14 of 14

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