<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

         For the quarterly period ended November 30, 2001.

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

         For the transition period from ___________ to ____________.

                         Commission file number: 0-4957

                       EDUCATIONAL DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                                         73-0750007
      (State or other jurisdiction of                        (I.R.S. Employer
      incorporation or organization)                        Identification No.)

10302 East 55th Place, Tulsa Oklahoma 74146-6515
(Address of principal executive offices)

Registrant's telephone number: (918) 622-4522

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

                           Yes  X    No
                              ----     ----

         As of November 30, 2001 there were 3,844,617 shares of Educational
Development Corporation Common Stock, $0.20 par value outstanding.


<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION

PART I. FINANCIAL INFORMATION

ITEM 1

BALANCE SHEETS

<Table>
<Caption>
                                                           November 30, 2001   February 28, 2001
                                                             (unaudited)
                                                           -----------------   -----------------
<S>                                                        <C>                 <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                               $     2,319,200     $       268,300
   Accounts receivable - (less
     allowances for doubtful accounts
     and sales returns: 11/30/01 - $176,500
     2/28/01 - $224,300)                                         2,672,500           1,478,400
   Inventories - Net                                             7,006,300           9,211,900
   Prepaid expenses and other assets                               193,700             247,100
   Income taxes receivable                                              --              72,600
   Deferred income taxes                                            82,800              97,800
                                                           ---------------     ---------------
         Total current assets                                   12,274,500          11,376,100

INVENTORIES                                                        813,900           1,005,000

PROPERTY AND EQUIPMENT
     at cost (less accumulated depreciation:
     11/30/01 - $1,424,200; 2/28/01 - $1,390,100)                  117,900              84,200

DEFERRED INCOME TAXES                                               28,600               6,300
                                                           ---------------     ---------------

                                                           $    13,234,900     $    12,471,600
                                                           ===============     ===============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Note payable to bank                                    $            --     $     1,084,000
   Accounts payable                                              2,266,200           1,703,100
   Accrued salaries and commissions                                501,500             325,700
   Income taxes                                                    141,700                  --
   Other current liabilities                                       267,800             118,700
                                                           ---------------     ---------------
         Total current liabilities                               3,177,200           3,231,500

DEFERRED INCOME TAXES                                                   --              24,300

COMMITMENTS

SHAREHOLDERS' EQUITY:
   Common Stock, $.20 par value (Authorized
     6,000,000 shares; Issued 5,429,240
     shares; Outstanding 3,844,617 and
     3,911,400 shares)                                           1,085,800           1,085,800
   Capital in excess of par value                                4,419,000           4,413,600
   Retained earnings                                             9,394,800           8,270,600
                                                           ---------------     ---------------
                                                                14,899,600          13,770,000
   Less treasury shares, at cost                                (4,841,900)         (4,554,200)
                                                           ---------------     ---------------

                                                                10,057,700           9,215,800
                                                           ---------------     ---------------

                                                           $    13,234,900     $    12,471,600
                                                           ===============     ===============
</Table>

See notes to financial statements.



                                       2
<PAGE>


EDUCATIONAL DEVELOPMENT CORPORATION


STATEMENTS OF EARNINGS (UNAUDITED)

<Table>
<Caption>
                                             Three Months Ended November 30,       Nine Months Ended November 30,
                                                 2001               2000               2001               2000
                                            --------------     --------------     --------------     --------------
<S>                                         <C>                <C>                <C>                <C>
GROSS SALES                                 $    8,261,700     $    7,704,300     $   23,498,500     $   21,743,000
   Less discounts & allowances                  (2,253,800)        (2,458,700)        (7,581,600)        (7,832,400)
                                            --------------     --------------     --------------     --------------
     Net sales                                   6,007,900          5,245,600         15,916,900         13,910,600
COST OF SALES                                    2,235,200          2,065,300          6,316,100          5,813,000
                                            --------------     --------------     --------------     --------------
     Gross margin                                3,772,700          3,180,300          9,600,800          8,097,600
                                            --------------     --------------     --------------     --------------
OPERATING EXPENSES:
   Operating & selling                             992,900            870,200          2,702,600          2,388,300
   Sales commissions                             1,632,500          1,329,500          3,770,100          2,894,800
   General & administrative                        366,800            341,900          1,082,700          1,111,200
   Interest                                             --             27,700             20,300             93,900
                                            --------------     --------------     --------------     --------------
                                                 2,992,200          2,569,300          7,575,700          6,488,200
                                            --------------     --------------     --------------     --------------

OTHER INCOME                                        19,600              8,400             38,300             29,200
                                            --------------     --------------     --------------     --------------

EARNINGS BEFORE INCOME TAXES                       800,100            619,400          2,063,400          1,638,600

INCOME TAXES                                       315,100            237,500            785,100            627,900
                                            --------------     --------------     --------------     --------------

NET EARNINGS                                $      485,000     $      381,900     $    1,278,300     $    1,010,700
                                            ==============     ==============     ==============     ==============
BASIC AND DILUTED EARNINGS
   PER SHARE:
   Basic                                    $         0.13     $         0.10     $         0.33     $         0.25
                                            ==============     ==============     ==============     ==============
   Diluted                                  $         0.12     $         0.10     $         0.32     $         0.25
                                            ==============     ==============     ==============     ==============

WEIGHTED AVERAGE NUMBER OF
   COMMON AND COMMON EQUIVALENT
   SHARES OUTSTANDING:
     Basic                                       3,851,496          3,914,806          3,877,764          3,974,920
                                            ==============     ==============     ==============     ==============
     Diluted                                     4,095,284          4,039,210          4,043,381          4,056,382
                                            ==============     ==============     ==============     ==============

DIVIDENDS DECLARED PER
   COMMON SHARE                             $           --     $           --     $         0.04     $         0.02
                                            ==============     ==============     ==============     ==============
</Table>


See notes to financial statements.



                                       3
<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION


STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

<Table>
<Caption>
                                        Common Stock
                                   (par value $.20 per share)
                                   -------------------------
                                           Number of                       Capital in
                                            Shares                         Excess of        Retained
                                            Issued          Amount         Par Value        Earnings
                                         -------------   -------------   -------------    -------------
<S>                                      <C>             <C>             <C>              <C>
BALANCE, MAR. 1, 2001                        5,429,240   $   1,085,800   $   4,413,600    $   8,270,600

Purchases of treasury
   stock                                            --              --              --               --

Sales of treasury stock                             --              --           5,600               --

Exercise of options at $3.00/share                  --              --            (200)              --

Dividends paid ($0.04 / share)                      --              --              --         (154,100)

Net earnings                                        --              --              --        1,278,300
                                         -------------   -------------   -------------    -------------
BALANCE, NOV. 30, 2001                       5,429,240   $   1,085,800   $   4,419,000    $   9,394,800
                                         =============   =============   =============    =============

<Caption>

                                              Treasury Stock
                                      -----------------------------
                                         Number
                                           of                           Shareholders'
                                          Shares          Amount            Equity
                                      -------------    -------------    -------------
<S>                                   <C>              <C>              <C>
BALANCE, MAR. 1, 2001                     1,517,840    $  (4,554,200)   $   9,215,800

Purchases of treasury
   stock                                     94,500         (371,400)        (371,400)

Sales of treasury stock                     (24,417)          73,600           79,200

Exercise of options at $3.00/share           (3,300)          10,100            9,900

Dividends paid ($0.04 / share)                   --               --         (154,100)

Net earnings                                     --               --        1,278,300
                                      -------------    -------------    -------------
BALANCE, NOV. 30, 2001                    1,584,623    $  (4,841,900)   $  10,057,700
                                      =============    =============    =============
</Table>


See notes to financial statements.



                                       4
<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION


STATEMENTS OF CASH FLOWS (UNAUDITED)

<Table>
<Caption>
                                                           Nine Months Ended November 30
                                                          --------------------------------
                                                               2001              2000
                                                          --------------    --------------
<S>                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES                      $    3,648,700    $    1,302,700

CASH FLOWS FROM INVESTING ACTIVITIES -
   Purchases of property and equipment                           (77,400)          (58,500)
                                                          --------------    --------------

     Net cash used in investing activities                       (77,400)          (58,500)
                                                          --------------    --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under revolving credit agreement                 2,347,000         5,801,000
   Payments under revolving credit agreement                  (3,431,000)       (6,289,000)
   Cash received from exercise of stock option                     9,900                --
   Cash received from sale of treasury stock                      79,200            41,000
   Cash paid to acquire treasury stock                          (371,400)         (800,100)
   Dividends paid                                               (154,100)          (78,800)
                                                          --------------    --------------

     Net cash used in financing activities                    (1,520,400)       (1,325,900)
                                                          --------------    --------------

Net Increase (Decrease) in Cash and Cash Equivalents           2,050,900           (81,700)
Cash and Cash Equivalents, Beginning of Period                   268,300           214,300
                                                          --------------    --------------
Cash and Cash Equivalents, End of Period                  $    2,319,200    $      132,600
                                                          ==============    ==============

Supplemental Disclosure of Cash Flow Information:
   Cash paid for interest                                 $       26,400    $       92,400
                                                          ==============    ==============
   Cash paid for income taxes                             $      602,300    $      631,000
                                                          ==============    ==============
</Table>

See notes to financial statements.



                                       5
<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 1 - The information shown with respect to the three months and nine months
ended November 30, 2001 and 2000, which is unaudited, includes all adjustments
which in the opinion of Management are considered to be necessary for a fair
presentation of earnings for such periods. There were no adjustments, other than
normal recurring accruals, entering into the determination of the results shown
except as noted in this report. The results of operations for the three months
and nine months ended November 30, 2001 and 2000, respectively, are not
necessarily indicative of the results to be expected at year end due to
seasonality of the product sales.

These financial statements and notes are prepared pursuant to the rules and
regulations of the Securities and Exchange Commission for interim reporting and
should be read in conjunction with the Financial Statements and accompanying
notes contained in the Company's Annual Report to Shareholders for the Fiscal
Year ended February 28, 2001.

Note 2 - Effective June 30, 2001 the Company signed a Second Amendment to the
Credit and Security Agreement with State Bank which provides a $3,500,000 line
of credit. This line of credit is evidenced by a promissory note in the amount
of $3,500,000 payable June 30, 2002. This note bears interest at the Wall Street
Journal prime floating rate minus 0.25% payable monthly. The note is
collateralized by substantially all the assets of the Company. There were no
borrowings under the revolving credit agreement at November 30, 2001.

Note 3 - Inventories consist of the following:

<Table>
<Caption>
                                                         November 30, 2001   February 28, 2001
                                                         -----------------   -----------------
<S>                                                      <C>                 <C>
                Current:
                  Book Inventory                           $    7,052,700     $    9,258,300
                  Reserve for Obsolescence                        (46,400)           (46,400)
                                                           --------------     --------------

                Inventories net - current                  $    7,006,300     $    9,211,900
                                                           ==============     ==============

                Non-current:
                  Book Inventory                           $      938,500     $    1,051,600
                  Reserve for Obsolescence                       (124,600)           (46,600)
                                                           --------------     --------------

                Inventories - non-current                  $      813,900     $    1,005,000
                                                           ==============     ==============
</Table>

                  The Company occasionally purchases book inventory in
                  quantities in excess of what will be sold within the normal
                  operating cycle due to minimum order requirements of the
                  Company's primary supplier. These amounts are included in
                  non-current inventory.

Note 4- Basic earnings per share is computed by dividing net earnings by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share is based on the combined weighted average number of common
shares outstanding increased, when appropriate, for the number of common shares
issuable upon exercise of stock options, computed using the treasury stock
method.




                                       6
<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION

The computation of weighted average common and common equivalent shares used in
the calculation of basic and diluted earnings per share ("EPS") is shown below.


<Table>
<Caption>
                                                 Three Months Ended November 30,   Nine Months Ended November 30,
                                                     2001              2000            2001              2000
                                                 -------------    -------------    -------------    -------------
<S>                                              <C>              <C>              <C>              <C>
Net Earnings                                     $     485,000    $     381,900    $   1,278,300    $   1,010,700
                                                 =============    =============    =============    =============

Basic EPS:
Weighted Average Shares Outstanding                  3,851,496        3,914,806        3,877,764        3,974,920
                                                 =============    =============    =============    =============
Basic EPS                                        $        0.13    $        0.10    $        0.33    $        0.25
                                                 =============    =============    =============    =============

Diluted EPS:
Weighted Average Shares Outstanding                  3,851,496        3,914,806        3,877,764        3,974,920
Assumed Exercise of Options                            243,788          124,404          165,617           81,462
                                                 -------------    -------------    -------------    -------------
Shares Applicable to Diluted Earnings                4,095,284        4,039,210        4,043,381        4,056,382
                                                 =============    =============    =============    =============
Diluted EPS                                      $        0.12    $        0.10    $        0.32    $        0.25
                                                 =============    =============    =============    =============
</Table>

Since March 1, 1998, when the Company began its stock repurchase program,
1,634,674 shares of the Company's common stock at a total cost of $5,020,989
have been acquired. The Board of Directors has authorized purchasing up to
2,000,000 shares as market conditions warrant.

Note 5 - On December 12, 2001 the Company paid an earnest money deposit of
$89,500 and entered into an agreement to purchase its current leased office and
warehouse facility for cash of approximately $1,790,000. Closing is anticipated
to occur in January 2002.

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

Certain statements contained in this Management Discussion and Analysis are not
based on historical facts, but are forward-looking statements that are based
upon numerous assumptions about future conditions that may ultimately prove to
be inaccurate. Actual events and results may materially differ from anticipated
results described in such statements. The Company's ability to achieve such
results is subject to certain risks and uncertainties. Such risks and
uncertainties include but are not limited to, product prices, continued
availability of capital and financing, and other factors affecting the Company's
business that may be beyond its control.

With the exception of the overall impact on the general economy, the tragic
events of September 11, 2001 have not had a direct material effect on the
Company.

FINANCIAL CONDITION

The financial condition of the Company remains strong. Working capital at
November 30, 2001 was $9,097,300 compared with working capital of $8,144,600 at
the end of fiscal year 2001. Cash provided by increased sales in the Home
Business Division resulted in cash and cash equivalents increasing $2,050,900
over fiscal year 2001 year end balances. Accounts receivable increased 67.3%
during the first nine months of fiscal year 2002. The Company's "fall special",
which began in the second quarter and continued during the third quarter,
extended the payment terms until the fourth quarter of fiscal year 2002.
Inventory levels declined 22.5% during the first nine months of fiscal year
2002. The level of inventory will fluctuate throughout the year, depending upon
sales and the timing of shipments from the Company's principal supplier. The
Company continuously monitors inventory to assure it has adequate supplies on
hand to meet sales requirements. Accounts payable increased 33.1% over accounts
payable at the end of last fiscal year. The major component of accounts payable
is the amount due to the Company's principal supplier. Increases and decreases
in inventory levels as well as the timing of purchases and the payment terms
offered by various suppliers affect the levels of accounts payable. The Company
paid off its short term bank borrowings during the second quarter using cash
generated by increased sales in the Home Business Division.

Pre-tax margins were 13.3% and 13.0% for the three months and nine months ended
November 30, 2001, respectively and 11.8% and 11.8% for the same comparable
periods last year.




                                       7
<PAGE>



EDUCATIONAL DEVELOPMENT CORPORATION

RESULTS OF OPERATIONS

Revenues - Net sales from the Home Business Division were $10,231,400 for the
nine months ended November 30, 2001 compared with $7,904,900 for the nine months
ended November 30, 2000, an increase of 29.4%. Sales for the three months ended
November 30, 2001 increased 22.5% to $4,474,800 compared with $3,652,000 for the
three months ended November 30, 2000. The Company attributes these increases to
the addition of new sales consultants and the retention of existing sales
consultants. The Company continues to offer new and exciting incentive programs,
travel contests and regional seminars to help stimulate sales and recruiting.
The Company also continues to offer its leadership skills program for
supervisors. This training program is designed to help supervisors build their
business. Management is optimistic that the Home Business Division will continue
to grow.

Net sales for the Publishing Division were $5,685,500 for the nine months ended
November 30, 2001 compared with $6,005,700 for the same period a year ago, a
decline of 5.3%. Net sales for the three months ended November 30, 2001 and 2000
were $1,533,100 and $1,593,600 respectively, a decrease of 3.8%. The Company
attributes this decline to a 45% decrease in purchasing by one of the Company's
major wholesale distributors who closed down two distribution centers during the
last six months of fiscal year 2002. This wholesaler's consolidation has been
completed and their purchases have begun to return to a more normal level. The
juvenile paperback market is highly competitive. Industry sales last year were
$753 million. The Publishing Division's annual sales are approximately 1% of
industry sales. Competitive factors include product quality, price and
deliverability. National chains continue to dominate the market. The Company has
taken a very aggressive approach towards increasing sales in this market segment
by the use of cooperative advertising, joint promotional efforts and
institutional advertising in trade publications. Management believes the Company
can maintain its 1% market share.

Cost of Sales - The Company's cost of sales for the nine months ended November
30, 2001 was $6,316,100, an increase of 8.7% over cost of sales of $5,813,000
for the nine months ended November 30, 2000. Cost of sales expressed as a
percentage of gross sales was 26.9% for the nine months ended November 30, 2001
and 26.7% for the same nine month period a year ago. Cost of sales for the three
months ended November 30, 2001 was $2,235,200 compared with $2,065,300 for the
same three month period last year, an increase of 8.2%. When expressed as a
percentage of gross sales, cost of sales for the three months ended November 30,
2001 was 27.1% and was 26.8% for the three months ended November 30, 2000.

Operating Expenses - Operating and selling expenses increased 13.2% to
$2,702,600 for the nine months ended November 30, 2001 compared with $2,388,300
for the nine months ended November 30, 2000. These expenses expressed as a
percentage of gross sales were 11.5% and 11.0% for the nine months ended
November 30, 2001 and 2000 respectively. Operating and selling expenses for the
three months ended November 30, 2001 were $992,900, an increase of 14.1% over
these expenses of $870,200 for the same period a year ago. When expressed as a
percentage of gross sales, these expenses for the three months ended November
30, 2001 and 2000 were 12.0% and 11.3% respectively. Increased costs for special
promotions and incentives in the Home Business Division contributed to the
increase in operating and selling expenses for both the three months and nine
months ended November 30, 2001.

Sales commissions for the nine months ended November 30, 2001 were $3,770,100
compared with $2,894,800 for the same nine month period last year, an increase
of 30.2%. Sales commissions for the third quarters ended November 30, 2001 and
2000, respectively, were $1,632,500 and $1,329,500, an increase of 22.8%. When
expressed as a percentage of gross sales, sales commissions for the three months
and nine months ended November 30, 2001 were 19.8% and 16.0% respectively and
were 17.3% and 13.3% for the three months and nine months ended November 30,
2000, respectively. Sales commissions will fluctuate depending upon the product
being sold and the division making the sale. The Home Business Division and the
Publishing Division have separate and distinct commission programs and rates.
Sales commissions increased in both periods for the Home Business Division and
declined in both periods for the Publishing Division.

General and administrative expenses were $1,082,700 for the nine months ended
November 30, 2001 versus $1,111,200 for the nine months ended November 30, 2000,
a decrease of 2.6%. These costs expressed as a percentage of gross sales were
4.6% for the current nine month period and 5.1% for the same nine month period a
year ago. General and administrative expenses for the three months ended
November 30, 2001 were $366,800, an increase of 7.3% over $341,900, for the same
three months last year. When expressed as a percentage of gross sales, these
costs for the three months ended November 30, 2001 and 2000 were 4.4% and 4.4%
respectively. A decrease in depreciation expense contributed to the decrease in
general and administrative expenses for the nine months ended November 30, 2001.

The Company did not incur any interest expenses for the three months ended
November 30, 2001 as the bank loan had been paid off in the previous quarter.
Interest expense for the nine months ended November 30, 2001 decreased 78.4%
when compared with the same nine month period a year ago. Reduced borrowings and
lower interest rates contributed to the lower interest costs.



                                       8
<PAGE>


EDUCATIONAL DEVELOPMENT CORPORATION


BUSINESS SEGMENTS

The Company has two reportable segments: Publishing and Usborne Books at Home
("UBAH"). These reportable segments are business units that offer different
methods of distribution to different types of customers. They are managed
separately based on the fundamental differences in their operations. The
Publishing Division markets its products to retail accounts, which include book,
school supply, toy and gift stores and museums, through commissioned sales
representatives, trade and specialty wholesalers and an internal telesales
group. The UBAH Division markets its product line through a network of
independent sales consultants through a combination of direct sales, home shows
and book fairs.

The accounting policies of the segments are the same as those of the Company.
The Company evaluates segment performance based on operating profits of the
segments which is defined as segment net sales reduced by direct cost of sales
and direct expenses. Corporate expenses, including interest and depreciation,
and income taxes are not allocated to the segments. The Company's assets are not
allocated on a segment basis.

Information by industry segment for the three months and nine months ended
November 30, 2001 and 2000 is set forth below:


<Table>
<Caption>
                                                Publishing           UBAH             Other              Total
                                              --------------    --------------    --------------     --------------
<S>                                           <C>               <C>               <C>                <C>
NINE MONTHS ENDED NOVEMBER 30, 2001

     Net sales from external customers        $    5,685,500    $   10,231,400    $           --     $   15,916,900
     Earnings before income taxes             $    2,022,700    $    2,312,000    $   (2,271,300)    $    2,063,400

THREE MONTHS ENDED NOVEMBER 30, 2001

     Net sales from external customers        $    1,533,100    $    4,474,800    $           --     $    6,007,900
     Earnings before income taxes             $      526,300    $    1,058,000    $     (784,200)    $      800,100

NINE MONTHS ENDED NOVEMBER 30, 2000

     Net sales from external customers        $    6,005,700    $    7,904,900    $           --     $   13,910,600
     Earnings before income taxes             $    2,173,100    $    1,790,600    $   (2,325,100)    $    1,638,600

THREE MONTHS ENDED NOVEMBER 30, 2000

     Net sales from external customers        $    1,593,600    $    3,652,000    $           --     $    5,245,600
     Earnings before income taxes             $      556,600    $      810,600    $     (747,800)    $      619,400
</Table>


Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company does not have any material market risk.

PART II OTHER INFORMATION

Item 5. OTHER INFORMATION

         None


                                       9
<PAGE>


EDUCATIONAL DEVELOPMENT CORPORATION



                                   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.


                       EDUCATIONAL DEVELOPMENT CORPORATION
                                  (Registrant)



                                   By      /s/ Randall W. White
                                     --------------------------------
                                           Randall W. White
                                           President


Date:   December 20, 2001
     ------------------------



                                       10