<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM  10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarterly Period Ended   September 30, 1998  Commission File Number 0-21068
                             ------------------                         -------
                                        
                          SIGHT RESOURCE CORPORATION
--------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)

          Delaware                                                04-3181524
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              100 Jeffrey Avenue
                             Holliston,  MA 01746
--------------------------------------------------------------------------------
                   (Address of principal executive offices)

                                 508-429-6916
--------------------------------------------------------------------------------
                          (Issuer's telephone number)
                                        
                                      N/A
--------------------------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed since the last
                                    report)
                                        
Check whether the issuer (1)  filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
                                                      Yes  X     No  
                                                         ------    ------

APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

On  November 6, 1998, 8,905,730  shares of common stock, par value $0.01 per
share, were outstanding.

                                                        TOTAL PAGES           17
                                                        EXHIBIT INDEX AT PAGE 16

                                       1
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                                     INDEX
                                        
<TABLE> 
<CAPTION> 

                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
PART I.  FINANCIAL INFORMATION 

Item 1   Financial Statements

         Consolidated Balance Sheets as of September 30, 1998 and
         December 31, 1997                                                    3

         Consolidated Statements of Operations for the Three and
         Nine Months Ended  September 30, 1998 and 1997                       4
 
         Consolidated Statements of Cash Flows for the Nine
         Months Ended  September 30, 1998 and 1997                            5
 
         Notes to Consolidated Financial Statements                           6
 
Item 2   Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                               11

PART II. OTHER  INFORMATION 

Item 2   Changes in Securities and Use of Proceeds                           16

Item 6   Exhibits and Reports on Form 8-K                                    16

         Signatures                                                          17
</TABLE>

                                       2
<PAGE>

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
 
                          SIGHT RESOURCE CORPORATION
                          Consolidated Balance Sheets
                (In thousands, except share and per share data)
<TABLE> 
<CAPTION> 
                                                                      September 30,           December 31,
                                                                          1998                   1997        
                                                                      -------------         --------------   
ASSETS                                                                 (unaudited)                           
<S>                                                                 <C>                 <C>                
Current assets:                                                                                              
   Cash and cash equivalents                                                $ 1,570               $  6,076   
   Accounts receivable, net of allowance                                                                     
     of $410 and $478, respectively                                           3,320                  1,781   
   Inventories                                                                4,478                  4,434   
   Prepaid expenses and other current assets                                    170                    377   
                                                                      -------------         --------------   
      Total current assets                                                    9,538                 12,668   
                                                                      -------------         --------------   
Property and equipment                                                       12,830                 10,070   
Less accumulated depreciation                                                (6,610)                (4,406)  
                                                                      -------------         --------------   
      Net property and equipment                                              6,220                  5,664   
                                                                      -------------         --------------   
Other assets:                                                                                                
   Intangible assets, net                                                    16,954                 14,898   
   Other assets                                                               1,181                  1,277   
                                                                      -------------         --------------   
     Total other assets                                                      18,135                 16,175   
                                                                      -------------         --------------   
                                                                            $33,893               $ 34,507   
                                                                      =============         ==============   
LIABILITIES & STOCKHOLDERS' EQUITY                                                                           
Current liabilities:                                                                                         
   Current portion of long term debt                                        $   117               $  1,000   
   Accounts payable                                                           2,178                  1,797   
   Accrued expenses                                                           4,635                  5,628   
                                                                      -------------         --------------   
      Total current liabilities                                               6,930                  8,425   
                                                                      -------------         --------------   
Non-current liabilities:                                                                                     
  Long term debt, less current                                                  175                    ---   
   maturities                                                                                                
  Other liabilities                                                              94                    101   
                                                                      -------------         --------------   
     Total non-current liabilities                                              269                    101   
                                                                      -------------         --------------   
Redeemable convertible preferred stock                                                                       
      1,452,119 shares issued                                                 6,535                  6,535   
 
Stockholders' equity:
   Preferred Stock, $.01 par value.  Authorized 5,000,000
     shares; no shares issued and outstanding.                                  ---                    ---
   Common Stock, $.01 par value.  Authorized 20,000,000
     shares; issued 8,905,730 at September  30, 1998
     and 8,756,500 at  December 31, 1997.                                        90                     88
   Additional paid-in capital                                                36,807                 36,329
   Common stock issuable, 71,181 shares at
    September 30,
      1998 and December 31, 1997                                                432                    432
   Treasury stock at cost
         (30,600 shares in 1998 and 1997)                                      (137)                  (137)
   Accumulated deficit                                                      (17,033)               (17,266)
                                                                      -------------         --------------
      Total stockholders' equity                                             20,159                 19,446
                                                                      -------------         --------------
                                                                            $33,893               $ 34,507
                                                                      =============         ==============
</TABLE>
         See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                     Consolidated Statements of Operations
                (In thousands, except share and per share data)
 
<TABLE> 
<CAPTION> 
                                                  Three Months Ended                       Nine Months Ended 
                                           --------------------------------------------------------------------------
                                            September  30,   September  30,          September  30,   September  30,
                                                 1998             1997                    1998             1997
                                           --------------------------------------------------------------------------
                                                                          (unaudited)
<S>                                         <C>              <C>                  <C>                 <C>
Net revenue                                    $    14,299       $   12,674             $  42,377         $ 33,141
                                                                                   
Cost of revenue                                      4,877            4,463                14,700           12,058
                                             -------------    -------------         -------------    ------------- 
   Gross profit                                      9,422            8,211                27,677           21,083
                                                                                   
Selling, general and administrative expenses         9,265            8,364                27,471           22,102
 
                                             -------------    -------------         -------------    ------------- 
Income  (loss) from operations                         157             (153)                  206           (1,019)
 
                                             -------------    -------------         -------------    ------------- 
Other income (expense)                                                             
   Interest income                                      34               69                   162              292
   Interest expense                                    (45)             (89)                 (141)            (261)
   Gain on sale of assets                                -              251                    69              474
                                             -------------    -------------         -------------    ------------- 
     Total other income                                (11)             231                    90              505
                                             -------------    -------------         -------------    ------------- 
     Income (loss) before income tax expense           146               78                   296             (514)
                                                                                   
                                                                                   
Income tax expense                                       3                -                    63                -
                                             -------------    -------------         -------------    ------------- 
Net income (loss)                              $       143       $       78             $     233            ($514)
                                             =============    =============         =============    =============  
                                                                                    
Net earnings (loss) per common share:  
     Basic                                     $      0.02       $     0.01             $     0.03           ($0.06)
                                             =============    =============          =============    =============  
     Diluted                                   $      0.01       $     0.01             $     0.02           ($0.06)
                                             =============    =============          =============    =============  
 
Number of  shares used to compute net
  earnings per common share:
     Basic                                       8,890,000        8,782,000               8,853,000        8,639,000
                                             =============    =============           =============    =============  
     Diluted                                    10,380,000        8,782,000              10,352,000        8,639,000
                                             =============    =============           =============    =============  
 
 
</TABLE>

         See accompanying notes to consolidated financial statements.
 

                                       4
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                     Consolidated Statements of Cash Flows
                                (In thousands)
<TABLE> 
<CAPTION> 
                                                                           Nine Months Ended
                                                                  September  30,       September  30, 
                                                                       1998                1997
                                                              --------------------------------------------
                                                                               (unaudited)
<S>                                                           <C>                   <C>      
Operating activities:
   Net income (loss)                                                     $   233               ($514)
   Adjustments to reconcile net income (loss) to net cash    
         used in operating activities:                                                    
      Depreciation and amortization                                        1,952               1,482
      Gain on sale of assets                                                 (69)               (474)
      Changes in operating assets and liabilities:                                        
         Accounts receivable                                              (1,408)               (590)
         Inventories                                                         270                (727)
         Prepaid expenses and other current assets                           176                (530)
         Accounts payable and accrued expenses                            (1,350)               (527)
                                                                   -------------       -------------       
             Net cash used in operating activities                          (196)             (1,880)
                                                                   -------------       -------------       
                                                                                          
Investing activities:                                                                     
   Purchases of property and equipment                                    (1,183)             (1,284)
   Payments for acquisitions                                              (2,351)             (2,075)
   Proceeds from sale of assets                                              112               1,005
   Other assets                                                               48                (430)
                                                                   -------------       -------------       
         Net cash used in investing activities                            (3,374)             (2,784)
                                                                   -------------       -------------       
                                                                                          
Financing activities:                                                                     
   Principal payments on long term debt                                   (1,058)             (1,279)
   Other liabilities                                                          (7)                 39
   Proceeds from issuance of stock                                           129                 ---
   Purchase of common stock for treasury                                     ---                (137)
                                                                   -------------       -------------       
            Net cash used in financing activities                           (936)             (1,377)
                                                                   -------------       -------------       
                                                                                          
Net decrease in cash and cash equivalents                                 (4,506)             (6,041)
                                                                                          
Cash and cash equivalents, beginning of period                             6,076               9,924
                                                                   -------------       -------------       
Cash and cash equivalents, end of period                                 $ 1,570             $ 3,883
                                                                   =============       =============
 
 
  
</TABLE>

         See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                        
(1)  THE COMPANY
     (a) Nature of Business
     Sight Resource Corporation (the "Company") manufactures, distributes and
     sells eyewear and related products and services.

     (b) Acquisitions
     Effective July 1, 1997, the Company acquired one hundred percent of the
     outstanding shares of stock of Vision Holdings, Ltd. (formerly known as Dr.
     Greenberg, an Optometry Corporation d/b/a Vision Plaza) ("Vision Plaza")).
     The purchase price paid in connection with this acquisition was $2,000 in
     cash and the assumption and repayment of notes payable outstanding as of
     July 1, 1997 of approximately $800. As of December 31, 1997, Vision Plaza
     operated 17 eye care centers in southeast Louisiana and Mississippi. The
     acquisition was accounted for using the purchase method of accounting.

     Effective April 1, 1998, the Company acquired one hundred percent of the
     outstanding shares of stock of Eye Glass Emporium, Inc. ("Eyeglass
     Emporium"). The purchase price paid in connection with this acquisition was
     $2,309 of cash on hand, $350 in notes payable in twelve equal quarterly
     installments commencing June 30, 1998, and 87,940 shares of common stock.
     As of April 1, 1998, Eyeglass Emporium operated nine eye care centers in
     Indiana. The acquisition was accounted for using the purchase method of
     accounting.

     The results of operations of the acquisitions have been included in the
     consolidated financial statements from their respective dates of
     acquisition. The excess of the purchase price and expenses associated with
     each acquisition over the estimated fair value of the net assets acquired
     has been recorded as goodwill. As a result of the acquisition, the Company
     has also recorded adjustments to increase liabilities and establish
     reserves for the closing of stores and related restructuring costs,
     including lease commitments and severance costs. Total acquisition related
     reserves at September 30, 1998 and December 31, 1997 were $1,350 and
     $1,420, respectively.

                                       6
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     (a) Basis of Presentation
     The accompanying consolidated financial statements have been prepared by
     the Company without audit, pursuant to the rules and regulations of the
     Securities and Exchange Commission. In the opinion of the Company, these
     consolidated financial statements contain all adjustments (consisting of
     only normal, recurring adjustments) necessary to present fairly the
     financial position of Sight Resource Corporation as of September 30, 1998
     and the results of its operations and cash flows for the periods presented.

     The accompanying consolidated financial statements and related notes should
     be read in conjunction with the audited consolidated financial statements
     which are contained in the Company's Annual Report on Form 10-K for the
     year ended December 31, 1997.

     (b) Principles of Consolidation
     The accompanying consolidated financial statements include the accounts
     of the Company, its wholly-owned subsidiaries and three professional
     corporations ("PC's") in which the Company's subsidiaries assume the
     financial risks and rewards of such entities through a management contract
     and a stock agreement. The Company has no direct equity ownership in the
     PC's. All significant intercompany balances and transactions have been
     eliminated.
 
     In preparation of these consolidated financial statements in conformity
     with generally accepted accounting principles, management of the Company
     has made estimates and assumptions that affect the reported amounts of
     assets and liabilities, such as accounts receivable, inventory, impairment
     of property and equipment, and intangibles. Actual results could differ
     from those estimates.

     (c) Revenue Recognition
     Revenue and the related costs from the sale of eyewear are recognized at
     the time an order is complete. Revenue from eye care services is recognized
     when the service is performed. The Company has fee for service arrangements
     with all of its third party payors. Revenue is reported net of contractual
     allowances.

                                       7
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Contractual allowances are estimated in the period the related services are
rendered and adjusted in future periods as final settlements are determined. The
provision and related allowance are adjusted periodically, based upon an
evaluation of historical collection experience, industry reimbursement trends
and other relevant factors. The Company has not had any material settlements
with third-party payors nor is it aware of any material claims, disputes or
unsettled matters with any third-party payor.

Under revenue sharing arrangements for refractive surgery where the Company is
not responsible for patient billing, the Company receives a specified payment
from the hospital or center for each refractive surgical procedure performed.
Accordingly, the Company recognizes revenue on a per procedure basis at the time
procedures are performed. Under existing revenue-sharing arrangements for
refractive surgery where the Company is responsible for the collection from the
patient and payment to the ophthalmologist and other operating costs, the total
patient charge is recorded as revenue with the corresponding expenses recorded
in cost of revenue.

(d)Inventories
Inventories primarily consist of the costs of eyeglass frames, contact lenses,
ophthalmic lenses, sunglasses and other optical products and are valued at the
lower of cost (using the first-in, first-out method) or market.

(e)Property and Equipment
Property and equipment is stated at cost. The Company provides for depreciation
at the time the property and equipment is placed in service. The straight-line
method is used over the estimated useful life of the assets. The Company
assesses the recoverability of the undepreciated property and equipment on an
ongoing basis by comparing anticipated profits and future, undiscounted cash
flows to net book value. In performing this analysis, management considers such
factors as current results, trends, and future prospects, in addition to other
economic factors.

(f) Intangible Assets
Intangible assets resulting from the business acquisitions consist of patient
lists, trademarks, non-compete agreements and the excess cost of the acquisition
over the fair value of the net assets acquired (goodwill). Certain values
assigned are based upon independent appraisals and are amortized on a straight-
line basis over a period of 5 to 25 years. The Company assesses the
recoverability of unamortized intangible assets on an ongoing basis by comparing
anticipated operating profits and future, undiscounted cash flows to net book
value. If anticipated operating profits and future, undiscounted cash flows are
less than net book value, then an impairment charge is recorded to reduce the
carrying value of the assets to fair value. In performing this analysis,
management considers such factors as current results, trends, and future
prospects, in addition to other economic factors.

(g) Deferred Revenue
The Company offers a contact lens purchasing program in which, for a set fee,
customers may purchase contacts at discounted rates for a 12 month period. The

                                       8
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Company recognizes revenue from the sales of its contact lens purchasing program
on a monthly basis over the life of the program.

(h) Net Earnings (Loss) Per Share
Earnings per share are computed based on Statement of Financial Accounting
Standards No. 128 "Earnings per Share" ("SFAS 128"). SFAS 128 requires
presentation of basic earnings per share ("Basic EPS") and diluted earnings per
share ("Diluted EPS") by all entities that have publicly traded common stock or
potential common stock (options, warrants, convertible securities or contingent
stock arrangements). Basic EPS is computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
during the period. The computation of Diluted EPS does not assume conversion,
exercise or contingent exercise of securities that would have an antidilutive
effect on earnings.

The following table provides a reconciliation of the numerators and denominators
of the basic and diluted earnings (loss) per share computations for the three
and nine months ended September 30, 1998 and 1997:


<TABLE>
<CAPTION>
                                                                     Three Months Ended        Nine Months Ended
                                                                       September  30,           September  30,
                                                                      1998         1997        1998         1997
                                                                 -------------  ----------  -----------  ---------   
<S>                                                             <C>            <C>         <C>          <C>
BASIC INCOME (LOSS) PER SHARE
Net income (loss)                                                          143          78          233       (514)
                                                                 -------------  ----------  -----------  ---------   
Net income (loss) available to common shareholders                         143          78          233       (514)
                                                                 =============  ==========  ===========  =========
Weighted average common shares outstanding                           8,890,000   8,782,000    8,853,000  8,639,000
Net income (loss) per share                                        $      0.02  $     0.01  $      0.03     ($0.06)
                                                                 =============  ==========  ===========  =========
DILUTED INCOME PER SHARE
Net income                                                                 143          78          233       (514)
                                                                 -------------  ----------  -----------  ---------   
Net income available to common shareholders                                143          78          233       (514)
                                                                 =============  ==========  ===========  =========
Weighted average common shares outstanding                           8,890,000   8,782,000    8,853,000  8,639,000
Convertible preferred stock                                          1,452,000           -    1,452,000          -
Options                                                                 38,000           -       47,000          -
                                                                 -------------  ----------  -----------  ---------   
Weighted average common shares outstanding and potential shares     10,380,000   8,782,000   10,352,000  8,639,000
                                                                 =============  ==========  ===========  =========
Net income per share                                               $      0.01  $     0.01  $      0.02     ($0.06)
                                                                 =============  ==========  ===========  =========
</TABLE>

                                       9
<PAGE>
 
                          SIGHT RESOURCE CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
 
(3) DEBT
    Debt consists of the following:
<TABLE> 
<CAPTION> 
                                                     SEPTEMBER 30,  DECEMBER 31,
                                                         1998           1997
                                                     -------------  ------------
<S>                                                  <C>            <C> 
Unsecured note payable, 7% interest rate, payable 
in equal quarterly  installments of $29 principal 
plus accrued interest                                        $ 292        $    -
 
Unsecured notes payable, 7% interest rate, $1,000 
paid on March 18, 1998; due on demand if the 
Company's cash balance is less than $2,800                       -         1,000
                                                     -------------  ------------
                                                               292         1,000
Less current maturities                                        117         1,000
                                                     -------------  ------------
Long term debt, less current maturities                      $ 175        $    -
                                                     =============  ============

</TABLE> 
On February 20, 1997, the Company entered into a Credit Agreement (the
"Agreement") with a bank pursuant to which the Company can borrow $5,000 on a
term loan basis and $5,000 on a revolving credit basis, subject to certain
performance criteria. The performance criteria include, among others, financial
condition covenants such as rolling EBITDA levels, indebtedness to EBITDA
ratios, current ratio of 1:1 and minimum net worth requirements. The term loan
facility bears interest at the bank's prime rate plus 1.5% or LIBOR plus 3% at
the Company's election and the revolving credit facility bears interest at the
bank's prime rate plus 1.25% or LIBOR plus 2.75% at the Company's election.
These loans are secured by all assets of the Company and its wholly owned
subsidiaries.  As of  September 30, 1998, there were no borrowings under the
term loan and revolving note. Amounts borrowed under the agreement will be used
to finance future acquisitions, provide ongoing working capital and for other
general corporate purposes. As part of the Agreement, the Company issued to the
bank warrants to purchase 150,000 shares of the common stock at a purchase price
of $4.625 per share.  The warrants expire December 31, 2003. The warrants were
accounted for as additional paid in capital based upon the fair value of the
securities. Fair market value was determined by using the relationship of the
interest rate charged with the warrants versus the rate to be charged without
the warrants. This value approximated that obtained using the Black Scholes
Method.

                                       10
<PAGE>
 
PART I:
ITEM 2:            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 Statements contained in this document which are not historical fact are
forward-looking statements based upon management's current expectations that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by forward-looking statements.
These risks are described in the Company's Form 10-K for the fiscal year ended
December 31, 1997 filed with the Securities and Exchange Commission.

OVERVIEW

Sight Resource Corporation (the "Company") manufactures, distributes and sells
eyewear and related products and services. The Company's operations currently
consist of 94 eye care centers, with three regional optical laboratories and
distribution centers, and is one of the seventeen largest providers in the
United States' primary eye care industry based upon sales. The Company's eye
care centers operate primarily under the brand names Cambridge Eye Doctors, E.B.
Brown Opticians, Eyeglass Emporium, Vision Plaza, and Vision World. The Company
also provides, or where necessary to comply with applicable law administers the
business functions of optometrists, ophthalmologists and professional
corporations that provide, vision related professional services. In addition, as
of September 30, 1998 the Company operated three laser vision correction ("LVC")
centers.

The Company operates three regional optical laboratories and distribution
centers. The regional optical laboratories provide complete laboratory services
to the Company's eye care centers, including polishing, cutting and edging,
tempering, tinting and coating of ophthalmic lenses. The distribution centers
provide and maintain an inventory of all accessories and supplies necessary to
operate the primary eye care centers in their regions, as well as "ready made"
eye care products, including contact lenses and related supplies. The inventory
of eyeglass lenses, frames, contact lenses, accessories and supplies is acquired
through a number of sources, domestic and foreign. Management believes that the
regional optical laboratories and distribution centers have the capacity to
accommodate additional multi-site eye care centers.

RESULTS OF OPERATIONS

 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

NET REVENUE.  The Company generated net revenue of approximately $14.3 million
and $42.4 million during the three and nine months ended September 30, 1998,
respectively, from the operation of its 94 eye care centers and three LVC
centers as compared to net revenue of approximately $12.7 million and $33.1
million from its 88 eye care centers and six LVC centers for the same period in
1997.  The $1.6 million, or 12.8%, increase in net revenue for the three months
ended September 30, 1998 as compared to the three months ended September 30,
1997, primarily relates to the additional nine eye care centers acquired
effective April 1, 1998.  The $9.2 million, or  27.9%, increase in net

                                       11
<PAGE>
 
revenue for the nine months ended September 30, 1998 as compared to the nine
months ended September 30, 1997, relates primarily to the additional seventeen
eye care centers acquired effective July 1, 1997 and the nine eye care centers
acquired effective April 1, 1998.

COST OF REVENUE.  Cost of revenue increased from approximately $4.5 million for
the three months ended September 30, 1997 to approximately $4.9 million for the
three months ended September 30, 1998.  Cost of revenue as a percentage of net
revenue decreased from 35.2% for the three months ended September 30, 1997 to
34.1% for the three months ended September 30, 1998. Cost of revenue increased
from approximately $12.1 million for the nine months ended September 30, 1997 to
approximately $14.7 million for the nine months ended September 30, 1998.  Cost
of revenue as a percentage of net revenue decreased from 36.4% for the nine
months ended September 30, 1997 to 34.7% for the nine months ended September 30,
1998. The improvement as a percentage of net revenue is primarily due to the
improved profit margin resulting from sales from both the additional seventeen
eye care centers acquired effective July 1, 1997 and the nine eye care centers
acquired effective April 1, 1998.  Cost of revenue principally consisted of (i)
the cost of manufacturing, purchasing and distributing optical products to its
customers and (ii) the cost of delivering LVC services, including depreciation
and maintenance on excimer lasers.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses were approximately $9.3 million and $27.5 million for
the three and nine months ended September 30, 1998 as compared to approximately
$8.4 million and $22.1 million for the three and nine months ended September 30,
1997.  The increase primarily relates to payroll and facility costs incurred in
operating additional eye care centers for the three and nine months ended
September 30, 1998.  Selling, general and administrative expenses, as a
percentage of net revenue, declined from 66.7% for the nine months ended
September 30, 1997 to 64.8% for the nine months ended September 30, 1998.  This
decrease is primarily a result of (i) the nine eye care centers acquired
effective April 1, 1998, which operate with a level of selling, general and
administrative expenses as a percentage of net revenue that is lower than that
of the Company and its other subsidiaries, and (ii) the Company's ability to
better leverage its fixed expenses in connection with the acquisition of multi-
site eye care centers.

OTHER INCOME AND EXPENSE.  Interest income totaled $34,000 and $162,000 for the
three and nine months ended September 30, 1998, respectively, as compared to
$69,000 and $292,000 for the three and nine months ended September 30, 1997,
respectively.  This decrease resulted from the investment of a lower average
cash balance during the first three quarters of 1998 as compared to the same
periods in 1997.  Interest expense totaled $45,000 and $141,000 for the three
and nine months ended September 30, 1998, respectively,  as compared to $89,000
and $261,000 for the three and nine months ended September 30, 1997,
respectively.  The decrease is associated with a higher average balance of debt
outstanding during the first three quarters of 1997 as compared to the same
periods in 1998. The sale of certain ophthalmic equipment during the nine months
ended September  30, 1998 generated a gain of approximately $69,000.  The sale
of certain ophthalmic equipment during the three and nine months ended September
30, 1997 generated a gain of approximately $251,000 and $474,000, respectively.

                                       12
<PAGE>
 
NET INCOME (LOSS).  The Company realized net income of $143,000, or $0.02 per
share, and $233,000 or $0.03 per share, on a basic weighted average diluted
basis, for the three and nine months ended September 30, 1998, respectively, as
compared to net income of $78,000, or $0.01 per share, and a loss of ($514,000),
or ($0.06) per share for the three and nine months ended September 30, 1997,
respectively.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1998, the Company had approximately $1.6 million in cash and
cash equivalents included in working capital of approximately $2.6 million, in
comparison to approximately $6.0 million in cash and cash equivalents included
in working capital of approximately $4.2 million as of December 31, 1997.  The
decrease in working capital is primarily due to the purchase of the nine eye
care centers on April 1, 1998,  the payment in March 1998 of the $1.0 million
note payable, and an increase in accounts receivable due to the acquisitions.

As of September 30, 1998, the Company had securities outstanding which provide
it with potential sources of financing as outlined below:

Securities                                      Potential 
                                                 proceeds
------------------------------------    ------------------
Warrants                   2,472,100           $14,800,000
Class A Warrants              85,000               500,000
Class II Warrants            290,424             2,032,968
Creditanstalt Warrants       150,000               694,000
Representative Warrants      170,000             1,400,000
                                        ------------------
                                               $19,426,968
                                        ==================

The Company also has outstanding 842,294 Class I Warrants. The Class I Warrants
entitle the holder to purchase an amount of shares of the Company's common stock
equal to an aggregate of up to 19.9% of the shares of common stock purchasable
under the Company's outstanding warrants and options on the same terms and
conditions of existing warrant and option holders. The purchaser is obligated to
exercise these warrants at the same time the options and warrants of existing
holders are exercised, subject to certain limitations. The amount of proceeds
from the exercise of these warrants cannot be estimated at this time.

There can be no assurance that the Company will obtain any such proceeds from
the exercise of the above securities.

In connection with the acquisition of Eyeglass Emporium, the Company issued an
unsecured note payable for $350,000. The note bears interest at 7% and is
payable in twelve equal quarterly installments of $29,000 principal plus accrued
interest.

On February 20, 1997, the Company entered into a Credit Agreement (the
"Agreement") with a bank pursuant to which the Company can borrow up to $5.0
million on a term loan basis and up to $5.0 million on a revolving credit basis,
subject to certain performance criteria. Such performance criteria include,
among others, financial condition covenants such as rolling EBITDA levels,
indebtedness to EBITDA ratios, current ratio of 1:1 and minimum net worth
ratios.  The term loan facility bears interest at the bank's prime rate 

                                       13
<PAGE>
 
plus 1.5% or LIBOR plus 3% at the Company's election, and the revolving credit
facility bears interest at the bank's prime rate plus 1.25% or LIBOR plus 2.75%
at the Company's election. These loans are secured by all assets of the Company
and its wholly owned subsidiaries. Amounts borrowed under the Agreement have
been and will continue to be used to refinance existing debt, finance future
acquisitions, provide ongoing working capital and for other general corporate
purposes. As part of the Agreement, the Company issued to the bank warrants to
purchase 150,000 shares of the common stock at a purchase price of $4.625 per
share. The warrants expire December 31, 2003.

The Company anticipates that its working capital and sources of capital, such as
the existing credit facility, will be adequate to fund the Company's currently
proposed activities for at least the next twelve months.  The Company
anticipates using financing vehicles such as bank debt and other sources of
funding, such as additional equity offerings, to achieve its business plan,
including the acquisition of eye care centers.

The Company has an acquisition strategy to acquire and integrate the assets of
multi-site eye care centers and the practices of eye care professionals and to
employ or enter into management services contracts with these professionals.
This strategy includes both expanding existing regional markets and entering new
regional markets. The Company will also target acquisitions in strategic markets
that will serve as platforms from which the Company can consolidate a given
service area by making and integrating additional "in-market" acquisitions. The
Company is currently evaluating potential acquisition candidates. Without
additional funding, the Company's rate of acquisition and size of acquisition
could be limited.

NEW PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued SFAS 131,
"Disclosures about Segments of an Enterprise and Related Information," which
established standards for the way that public business enterprises report
selected information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports to stockholders.  It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. SFAS 131, which becomes effective for the Company in its
year ending December 31, 1998, is not expected to have a material impact on the
Company's results of operations.  The Company is in the process of determining
the impact of SFAS 131 on its footnote disclosures.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes accounting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as "derivatives") and for hedging
activities. This statement requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The statement also sets forth the criteria for determining
whether a derivative may be specifically designated as a hedge of a particular
exposure with the intent of measuring the effectiveness of that hedge in the
statement of operations. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. Management does not believe that the
adoption of this statement will have a material 

                                       14
<PAGE>
 
impact on the Company's consolidated financial position, results of operations
or cash flows as the Company does not utilize derivative instruments.

YEAR 2000 ISSUE

The "Year 2000" issue refers to the inability of certain computer systems, as
well as certain hardware and equipment containing embedded microprocessors with
date sensitive data, to recognize accurate dates commencing on or after January
1, 2000. This has the potential to affect the operation of these systems
adversely and materially. The Company has identified four phases in its Year
2000 compliance efforts: discovery, assessment, remediation and applicable
testing and verification. The Company has substantially completed the discovery
and assessment phases for its own systems and applications and believes that by
modifying and upgrading existing software it can prevent the Year 2000
transition from posing significant internal operational problems.  To date the
costs related to the discovery and assessment phase have not been material to
the Company's financial position or results of operation.

The Company plans to complete the remediation phase by the second quarter of
1999 and complete the applicable testing and verification phase by the end of
the third quarter of fiscal year 1999. The Company is currently evaluating total
incremental costs related to the Year 2000 issue. The Company does not
anticipate that the costs of these modifications and conversions will be
material to its financial position or results of operations in any given year.

The Company is surveying its vendors, customers and others on whom it relies to
assure that their systems will be Year 2000 compliant and that they will be able
to continue their business with the Company without interruption. However, there
can be no assurance that the systems of other parties on which the Company's
systems rely will also be compliant or that any failure to be compliant in this
area by another party would not have an adverse effect on the Company's systems.
Furthermore, no assurance can be given that any or all of the Company's systems
are or will be Year 2000 compliant, that the ultimate costs required to address
the Year 2000 issue will not exceed the amounts indicated above, or that the
impact of any failure to achieve substantial Year 2000 compliance will not have
a material adverse effect on the Company's financial condition.

The Company has not yet developed a contingency plan in the event that it is
unable to successfully address the Year 2000 issue.  The Company plans to
develop a contingency plan by the end of the third quarter of 1999.

                                       15
<PAGE>
 
PART II.  OTHER INFORMATION
 
   Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

            (a) Not applicable
            (b) Not applicable
            (c) (1) Securities sold. On September 9, 1998, the Company issued a
                    total of 20,000 shares (the "Option Shares") of its Common
                    Stock.
                (2) Underwriter and other purchasers. No underwriters were
                    involved in the transaction. The Company issued the Option
                    Shares pursuant to the exercise of a stock option held by a
                    former employee.
                (3) Consideration. The Option Shares were issued at an exercise
                    price of $.43 per share for an aggregate exercise price of
                    $8,600.
                (4) Exemption from registration claimed. The Option Shares were
                    issued in reliance upon Section 4(2) of the Securities Act
                    of 1933, as amended, because the transaction did not involve
                    any public offering by the Company.
                (5) Terms of conversion or exercise.  Not applicable.
                (6) Use of Proceeds.  Not applicable
            (d) Not applicable.
 
   Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
            (a) Exhibits
 
                Exhibit
                  No         Title
                -------      -----
 
                 +10a        Employment Agreement between the Company and James
                             Norton, dated as of August 17, 1998.

                 +10b        Letter Agreement regarding employment between the 
                             Company and William McLendon, dated as of 
                             July 27, 1998.

                 +10c        Letter Agreement regarding employment between the 
                             Company and Stephen M. Blinn, dated as of 
                             August 3, 1998.

                 27          Financial Data Schedule
 
                -------------
                + - Management contract or compensatory plan, contract or
                    arrangement.
 
                (b) Reports on Form 8-K.
 
                No reports on Form 8-K were filed during the quarter covered by
                this report.

                                       16
<PAGE>
 
                                  SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    Sight Resource Corporation


 

Date:       November 12, 1998      
            -----------------                               
                                    By: /s/ WILLIAM T. SULLIVAN
                                    ---------------------------
                                    William T. Sullivan
                                    President and Chief Executive Officer
                                    (principal executive officer)


 

Date:       November 12, 1998       
            -----------------                               
                                    By: /s/ JAMES NORTON
                                    --------------------
                                    James Norton  
                                    Chief Financial Officer
                                    (principal financial officer)

                                       17