<PAGE>


                UNITED STATES 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 March 31, 1999

                                       OR

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

                 For the Transition period from ______ to ______


                        Commission File Number: 001-14843


                           THE BOYDS COLLECTION, LTD.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>

<S>                                                  <C>
                    Maryland                                       52-1418730
(STATE OR OTHER JURISDICTION OF INCORPORATION OR      (I.R.S. EMPLOYER IDENTIFICATION NO.)
                 ORGANIZATION)

</TABLE>

    350 South Street, McSherrystown,                                  17344
  Pennsylvania, Attn.: Christine L. Bell
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                            (ZIP CODE)

                                 (717) 633-9898
--------------------------------------------------------------------------------
              (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    No X 
                                    ---   ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

Common Stock, par value $.0001 per share                   61,838,238
                (CLASS)                         (OUTSTANDING AS OF MAY 12, 1999)


<PAGE>
                                                                               2


THE BOYDS COLLECTION, LTD.

TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                            PAGE

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS:

          Condensed Consolidated Balance Sheets as of
          March 31, 1999 and December 31, 1998                                 3

          Condensed Consolidated Statements of Income for the
          Three Months Ended March 31, 1999 and 1998                           4

          Condensed Consolidated Statements of Stockholders' Equity
          for the Three Months Ended March  31, 1999                           5

          Condensed Consolidated Statements of Cash Flows for the
          Three Months Ended March 31, 1999 and 1998                           6

          Notes to Condensed Consolidated Financial Statements                 7

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.                                12

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES
          ABOUT MARKET RISK.                                                  19


PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.                                                  19

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.                          19

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.                                    20

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                20

ITEM 5.   OTHER INFORMATION.                                                  21

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.                                   21

          SIGNATURES                                                          22

<PAGE>
                                                                               3


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS.

                           THE BOYDS COLLECTION, LTD.

                   CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
                MARCH 31, 1999 AND DECEMBER 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                           MARCH 31,    DECEMBER 31,
                                                                             1999          1998
                                                                                (IN THOUSANDS)
<S>                                                                     <C>           <C>
 ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                                               $  84,129     $  11,606
 Accounts receivable, less allowance for doubtful accounts of $180 in
  1999 and 1998, respectively                                               30,977        24,355
 Inventory--primarily finished goods                                        10,505         8,440
 Inventory in transit                                                          952         3,116
 Other current assets                                                          835           527
  Total current assets                                                     127,398        48,044
FURNITURE AND EQUIPMENT:
 Furniture and equipment                                                     3,404         2,662
 Less--accumulated depreciation                                             (1,248)       (1,143)
                                                                         ---------     ---------
  Total furniture and equipment                                              2,156         1,519
OTHER ASSETS:
 Deferred debt issuance costs                                                9,640        12,019
 Deferred tax asset                                                        230,305       234,403
 Other assets                                                                2,424         2,425
                                                                         ---------     ---------
  Total other assets                                                       242,369       248,847
                                                                         ---------     ---------
TOTAL ASSETS                                                             $ 371,923     $ 298,410
                                                                         =========     =========

 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable                                                        $   2,374     $   1,513
 Accrued taxes                                                               7,781         5,364
 Accrued expenses                                                            1,682         1,767
 Interest payable                                                            8,201         5,501
 Deferred income                                                               778            31
                                                                         ---------     ---------
  Total current liabilities                                                 20,816        14,176
LONG-TERM DEBT                                                             340,000       443,000
COMMITMENTS AND CONTINGENCIES (Notes 4 and 8)
STOCKHOLDERS' EQUITY:
 Capital stock (61,838 and 52,588 issued and outstanding at March 31,      (38,703)     (193,043)
  1999 and December 31, 1998, respectively) and paid-in capital in
  excess of par
 Retained earnings                                                          49,810        34,277
                                                                         ---------     ---------
  Total stockholders' equity (deficit)                                      11,107      (158,766)
                                                                         ---------     ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 371,923     $ 298,410
                                                                         =========     =========

</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE>
                                                                               4


                           THE BOYDS COLLECTION, LTD.


               CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE
             THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                       1999          1998
                                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                 <C>           <C>
NET SALES                                                            $ 57,185      $ 49,336
COST OF GOODS SOLD                                                     18,676        15,751
                                                                     --------      --------
Gross profit                                                           38,509        33,585
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                            4,319         2,785
OTHER OPERATING INCOME                                                    316           434
                                                                     --------      --------
INCOME FROM OPERATIONS                                                 34,506        31,234
                                                                     --------      --------
OTHER INCOME:
 Interest and dividend income                                             162           118
                                                                     --------      --------
INTEREST EXPENSE:
 Interest expense                                                       8,019           311
 Amortization of deferred debt issuance costs                             223          --
                                                                     --------      --------
TOTAL INTEREST EXPENSE                                                  8,242           311
                                                                     --------      --------
INCOME BEFORE PROVISION FOR INCOME TAXES AND
EXTRAORDINARY ITEM                                                     26,426        31,041

PROVISION FOR INCOME TAXES                                              9,513          --
                                                                     --------      --------
INCOME BEFORE EXTRAORDINARY ITEM                                     $ 16,913      $ 31,041
EXTRAORDINARY ITEM - WRITE OFF OF DEFERRED DEBT
ISSUANCE COSTS (NET OF $776 TAX BENEFIT)                                1,380          --
                                                                     --------      --------
NET INCOME                                                           $ 15,533      $ 31,041
                                                                     ========      ========

PRO FORMA DATA:

HISTORICAL INCOME BEFORE EXTRAORDINARY ITEM                          $ 16,913      $ 31,041
PRO FORMA PROVISION FOR INCOME TAXES                                     --          12,845
                                                                     --------      --------

PRO FORMA INCOME BEFORE EXTRAORDINARY ITEM                             16,913        18,196
EXTRAORDINARY ITEM - WRITE OFF OF DEFERRED DEBT
 ISSUANCE COSTS                                                         1,380           --
                                                                     --------      --------
PRO FORMA NET INCOME                                                 $ 15,533      $ 18,196
                                                                     ========      ========

PRO FORMA EARNINGS PER SHARE:
 Basic and Diluted Earnings Per Share
  Income Before Extraordinary Item                                   $   0.30      $   0.12
  Extraordinary Item - Write Off of Deferred Debt Issuance Costs        (0.02)         --
                                                                     --------      --------
  Net Income                                                         $   0.28      $   0.12
                                                                     ========      ========

</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE>
                                                                               5


                           THE BOYDS COLLECTION, LTD.

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    FOR THE THREE MONTHS ENDED MARCH 31, 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                            NUMBER OF    COMMON STOCK    RETAINED
                                                             SHARES       AND PAID-IN    EARNINGS
                                                                           CAPITAL
                                                                          IN EXCESS
                                                                            OF PAR
                                                                        (IN THOUSANDS)
<S>                                                           <C>        <C>            <C>
BALANCE, JANUARY 1, 1999                                       52,588     $(193,043)     $  34,277
Sale of common stock (net of related fees and expenses)         9,250       154,340           --
Net income                                                       --            --           15,533
                                                            ---------     ---------      ---------
BALANCE, MARCH 31, 1999                                        61,838     $ (38,703)     $  49,810
                                                            =========     =========      =========

</TABLE>


            See notes to condensed consolidated financial statements.

<PAGE>
                                                                               6


                           THE BOYDS COLLECTION, LTD.

             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
             THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                             1999           1998
                                                                               (IN THOUSANDS)
<S>                                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                $  15,533      $  31,041
Adjustments to reconcile net income to net cash provided by operating
 activities:
  Depreciation                                                                  105             63
  Amortization and write off of deferred debt issuance costs                  2,379           --
  Amortization of deferred tax asset                                          4,098           --
  Changes in assets and liabilities:
    Accounts receivable--net                                                 (6,622)        (2,906)
    Inventory                                                                (2,065)           505
    Inventory in transit                                                      2,164          1,857
    Other current assets                                                       (308)            (9)
    Other assets                                                                  1           --
    Accounts payable                                                            861            (39)
    Accrued taxes                                                             2,417            411
    Accrued expenses                                                            (85)          (389)
    Interest payable                                                          2,700            (23)
    Deferred revenue                                                            747            556
                                                                          ---------      ---------
     Net cash provided by operating activities                               21,925         31,067
                                                                          ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of equipment                                                         (742)          (387)
                                                                          ---------      ---------
     Net cash used in investing activities                                     (742)          (387)
                                                                          ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Repayment of note payable--stockholders                                       --          (30,000)
 Repayment of debt                                                         (103,000)          --
 Sale of common stock (net of related fees and expenses)                    154,340           --
                                                                          ---------      ---------
     Net cash used in financing activities                                   51,340        (30,000)
                                                                          ---------      ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                    72,523            680
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                               11,606         11,210
                                                                          ---------      ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                  $  84,129      $  11,890
                                                                          =========      =========
CASH PAID DURING THE PERIOD FOR INTEREST                                  $   5,300      $     333
                                                                          =========      =========
CASH PAID DURING THE PERIOD FOR INCOME TAXES                              $   2,103      $    --
                                                                          =========      =========

</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE>
                                                                               7


                           THE BOYDS COLLECTION, LTD.

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (AMOUNTS IN
                 THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1.       INTERIM FINANCIAL STATEMENTS

                  Boyds is a wholesaler and importer of giftware and imports
         substantially all of its products from foreign suppliers, primarily
         located in The People's Republic of China. The condensed consolidated
         balance sheet, as of March 31, 1999, the related condensed consolidated
         statements of income for the three months ended March 31, 1999 and 
         1998, the changes in stockholders' equity for the three months ended 
         March 31, 1999 and the cash flows for the three months ended 
         March 31, 1999 and 1998 are unaudited. In the opinion of management 
         all adjustments, consisting only of normal recurring adjustments, 
         necessary for a fair presentation of such interim financial 
         statements have been included. The results of operations for the 
         three months ended March 31, 1999 are not necessarily indicative 
         of the results to be expected for the full year. These financial 
         statements should be read in conjunction with the financial 
         statements and notes included in Boyds' 1998 Financial Statements, 
         which are included in the Registration Statement on Form
         S-1 (File No. 333-69535) filed with the Securities and Exchange
         Commission on March 4, 1999.

2.       INITIAL PUBLIC OFFERING

                  On March 5, 1999, Boyds issued and sold 9,250,000 shares of
         common stock at $18 per share in an initial public offering and listed
         its stock on the New York Stock Exchange. The proceeds to Boyds, after
         deducting the underwriting discount and attorney fees, were
         approximately $154.3 million. On March 12, 1999, $82.5 million of
         indebtedness under the credit facility with DLJ Capital Funding, Inc.
         and other lenders was repaid from the proceeds (see also Note 10).

3.       RECAPITALIZATION AND FINANCINGS

                  On March 6, 1998, Boyds entered into a Recapitalization and
         Stock Purchase Agreement with Bear Acquisition, Inc. ("Bear"). Bear was
         a subsidiary of KKR 1996 Fund L.P., a limited partnership formed at the
         direction of Kohlberg Kravis Roberts & Co. L.P. ("KKR"). In connection
         with the closing of the Recapitalization on April 21, 1998, Boyds used
         approximately $490 million of aggregate proceeds from certain
         financings described below (the "Financings") and approximately $8
         million of existing cash balances of Boyds to: (i) redeem (the
         "Redemption") a portion of Boyds' common stock held by the existing
         stockholders (the "Stockholders") for approximately $473 million and
         (ii) pay transaction fees and expenses of approximately $25 million. In
         addition, Bear acquired shares of common stock from the Stockholders
         for approximately $184 million (the "Stock Purchase"). The Stock
         Purchase, Redemption and Financings and related transactions have been
         recorded as a recapitalization (the "Recapitalization"). Upon
         completion of the Recapitalization, Bear owned approximately 80% of the
         Common Stock and the Stockholders retained approximately 20% of the
         Common Stock.

                  The Financings consisted of: (i) an aggregate of approximately
         $325 million of bank 

<PAGE>
                                                                               8


         borrowings by Boyds under senior secured term loans (the "Term Loans")
         and (ii) $165 million aggregate principal amount of senior subordinated
         notes (the "Notes"). In addition, Boyds entered into a $40 million
         senior secured revolving credit facility, which is available for Boyds'
         working capital requirements and to support trade letters of credit.
         Boyds does not have any borrowings under the revolving credit facility.

                  Financing costs of approximately $13,800 were classified as
         deferred debt issuance costs and will be amortized over the lives of
         the related debt facilities. In addition, Boyds incurred approximately
         $11,800 of costs associated with the Redemption, which were charged to
         paid-in capital in excess of par. Fees in the amount of $6,000 were
         paid to KKR in connection with the recapitalization.

4.       FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

                  At March 31, 1999 and at December 31, 1998, Boyds had letters
         of credit outstanding under bank credit agreements amounting to $3,426
         and $11,172, respectively. These letters of credit represent Boyds'
         commitment to purchase inventory which is to be produced and/or
         shipped.

5.       RELATED PARTY TRANSACTIONS AND NOTE PAYABLE - STOCKHOLDERS

                  The stockholders loaned $30,000 to Boyds at December 31, 1997,
         at an interest rate of 5.0%. These notes payable were repaid in 1998.
         Interest amounting to $333 was paid to the stockholders during the
         three months ended March 31, 1998.

                  For the first quarter ended March 31, 1999, Boyds paid to
         KKR approximately $134 for management fees and related expenses.

6.       LONG-TERM DEBT

                  Long-term debt is summarized as follows:

<TABLE>
<CAPTION>

                                                                                               MARCH 31,  DECEMBER 31,
                                                                                                 1999         1998
<S>                                                                                           <C>          <C>
         9% Senior Subordinated Notes due May 15, 2008                                         $165,000     $165,000
         
         Credit Agreement:
                   Secured Tranche A Term Loans due April 2005. Interest based on LIBOR or
                    base rate as defined                                                         88,250       88,250
                   Secured Tranche B Term Loans due April 2006. Interest based on LIBOR or
                    base rate as defined                                                         86,750      189,750
                   Secured revolving loan commitment of $40,000. Interest based on
                    LIBOR or base rate as defined                                                  --           --
                                                                                               --------     --------
                                                                                               $340,000     $443,000
                                                                                               ========     ========

</TABLE>

<PAGE>
                                                                               9


                  At March 31, 1999, the weighted average interest rate in
         effect for the Term Loans was 6.848%.

                  The Notes have an optional redemption feature any time after
         May 15, 2003. Interest on the Notes is payable semiannually on May 15
         and November 15.

                  The Credit Agreement contains certain covenants, including the
         requirement of a minimum interest coverage ratio as defined in the
         agreement and substantial restrictions as to dividends and
         distributions. The agreement also provides that the Term Loans and
         revolving loan commitment be secured by the capital stock of Boyds'
         future subsidiaries. In connection with the transfer of Boyds' assets
         to its wholly owned subsidiary, The Boyds Collection Ltd. L.P. ("Boyds
         L.P.") in 1998, Boyds pledged its interests in Boyds L.P. In addition,
         the Term Loans are subject to mandatory prepayment with the proceeds of
         certain asset sales and a portion of Boyds' excess cash flow as defined
         in the credit agreement. Boyds has the option of selecting its own
         interest period at one, two, three, six, nine or twelve month periods.

                  The scheduled maturities of the long-term debt are as follows:

<TABLE>
<S>                                                              <C>
                        1999                                      $   --
                        2000                                          --
                        2001                                         6,250
                        2002                                        14,000
                        2003                                        17,000
                        Thereafter                                 302,750

</TABLE>

7.       INCOME TAXES

                  Prior to April 21, 1998, Boyds had elected to be treated as an
         S Corporation for federal and state income tax purposes. Boyds
         subsequently elected to change its tax status from an S Corporation to
         a C Corporation. The income statement reflects a provision for income
         taxes for the period Boyds was a C Corporation. Pro forma income
         statement data reflects pro forma income tax information as if Boyds
         was a C Corporation for the entire periods presented.

                  For federal income tax purposes, Boyds has elected to treat
         the Recapitalization and Stock Purchase as an asset acquisition by
         making a Section 338 Section (h)(10) election. As a result, there is a
         difference between the financial reporting and tax basis of Boyds'
         assets. The difference creates deductible goodwill for tax purposes,
         which creates a deferred tax asset for financial reporting purposes.
         The deferred tax asset will be realized as the goodwill is amortized
         over a period of fifteen years. In the opinion of management, Boyds
         believes it will have sufficient profits in the future to realize the
         deferred tax asset.

8.       CONTINGENCIES

                  Boyds is engaged in various lawsuits, either as plaintiff or
         defendant, involving alleged 

<PAGE>
                                                                              10


         patent infringement and breaches of contract. In the opinion of
         management, based upon advice of counsel, the ultimate outcome of these
         lawsuits will not have a material impact on Boyds' financial
         statements.

9.       PRO FORMA INFORMATION (UNAUDITED):

                  The following pro forma information for the periods presented
         give effect to the recapitalization and related transactions and the
         initial public offering as if such transaction was consummated on
         January 1, 1999. The pro forma information excludes the effects of the
         extraordinary item related to the write off of deferred debt issuance
         costs:

<TABLE>
<CAPTION>

                                                                     THREE MONTHS ENDED
                                                                         MARCH 31,
                                                                      1999        1998
                                                                      (IN THOUSANDS)
<S>                                                                <C>         <C>
         Historical Income from Operations                          $34,506     $31,234
         Pro Forma Interest Expense                                   5,395       7,099
                                                                    -------     -------
         Pro Forma Income Before Provision for Income Taxes and      29,111      24,135
                                                                    -------     -------
         Extraordinary Item
         Pro Forma Provision for Income Taxes                        10,480      10,016
                                                                    -------     -------
         Pro Forma Net Income Before Extraordinary Item             $18,631     $14,119
                                                                    =======     =======
         Pro Forma Basic and Diluted Earnings per Share             $  0.30     $  0.23
         Weighted Average Basic Shares Outstanding                   61,838      60,684
         Weighted Average Diluted Shares Outstanding                 62,515      60,684

</TABLE>

         The following is a reconciliation of the numerators and denominators of
the basic and diluted earnings per share computations:

<TABLE>
<CAPTION>

                                                                                       MARCH 31,
                                                                                   1999          1998
                                                                                     (IN THOUSANDS)
<S>                                                                             <C>          <C>
         Numerator for basic and diluted earnings per share:
                  Pro forma net income                                           $ 15,533     $ 18,196
                                                                                 ========     ========
         Denominator:
                  Denominator for basic earnings per share--weighted average
                    shares                                                         55,363      157,672
         Effect of dilutive securities:
                  Effect of shares issuable under stock option plans based
                    on treasury stock method                                          677         --
                                                                                 --------     --------
         Denominator for diluted earnings per share--weighted average shares       56,040      157,672
                                                                                 ========     ========

</TABLE>

<PAGE>
                                                                              11


10.      SUBSEQUENT EVENTS

                  On April 12, 1999, Boyds paid $71.9 million to the holders of
         the senior subordinated notes, leaving a balance outstanding of $99.0
         million. The payment comprised $5.9 million of redemption premium and
         $66.0 million of principal.

                  On April 21, 1999, Boyds repaid a further $10.0 million of the
         tranche B term loans, leaving a balance outstanding of $76.75 million.

                  As a consequence of these repayments total long term debt
         decreased from $340.0 million at March 31, 1999 to $264.0 million at
         April 21, 1999.

<PAGE>
                                                                              12


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

GENERAL

         Boyds has grown significantly to become a leading domestic designer,
importer and distributor of branded, high-quality, hand-crafted collectibles and
other specialty giftware products. Boyds' products include resin figurines,
plush animals, porcelain dolls and boxes and related clothing and accessories.
Boyds sells its products through an extensive network of approximately 19,950
accounts comprised of independent gift and collectibles retailers, premier
department stores, selected catalogue retailers and other electronic and retail
channels.

         Boyds' resin figurine and plush animal sales accounted for 86.5% of
first quarter 1999 net sales with other product sales, freight sales, collectors
club sales and distributor sales comprising the remainder. Freight sales
represent shipping and handling charges assessed on each order based on order
size. Collectors club sales are generated from annual dues collected directly
from consumers who become members of Boyds' collectors club, THE LOYAL ORDER OF
FRIENDS OF BOYDS, which began in July 1996 and currently has approximately
120,000 paying members. Distributor sales represent sales of Boyds' products
to independent distributors in other countries and to certain accounts in the
U.S., which are shipped directly from overseas suppliers.

         Selling, general and administrative expenses are comprised of
overhead, selling and marketing costs, administration, professional fees and
Pennsylvania capital stock taxes. Boyds exhibits its products at many 
national and regional tradeshows where orders are taken by Boyds' employees
and part-time help. Boyds operates almost exclusively out of a leased
office/distribution facility in McSherrystown, Pennsylvania where it believes
both labor and rental costs are attractive. These factors, combined with Boyds'
access to low-cost manufacturing sources located primarily in China, have
resulted in an operating income margin that Boyds believes is among the highest
in the industry.

         Boyds licenses its product designs to other companies for products
including stationery, greeting cards and home textiles. Boyds believes such
licensing, in addition to providing royalty income, helps to increase consumer
awareness of Boyds' designs and brand image. Boyds reports royalty income as
other operating income.

RESULTS OF OPERATIONS

<PAGE>
                                                                              13


         The following table sets forth the components of net income as a
percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED
                                                         MARCH 31,
                                                      1999       1998
<S>                                                 <C>        <C>
Net sales                                            100.0%     100.0%
Gross profit                                          67.3       68.1
Selling, general and administrative expenses           7.6        5.7
Other operating income                                 0.6        0.9
                                                     -----      -----
Income from operations                                60.3       63.3
                                                     -----      -----
Other income                                           0.3        0.2
Interest expense                                      14.4        0.6
Provision for income taxes                            16.6         --
                                                     -----      -----
Income before extraordinary item                      29.6%      62.9%
                                                     -----      -----
Extraordinary item (net of $776 tax benefit)           2.4         --
                                                     -----      -----
Net income                                            27.2%      62.9%
                                                     =====      =====
PRO FORMA INFORMATION:
Historical income from operations                     60.3%      63.3%
Pro forma interest expense                             9.4       14.4
Pro forma provision for income taxes                  18.3       20.3
                                                     -----      -----
Pro forma net income before extraordinary item        32.6%      28.6%
                                                     =====      =====

</TABLE>

THREE MONTHS ENDED MARCH 31, 1999 VS. THREE MONTHS ENDED MARCH 31, 1998

         NET SALES - Net sales increased $7.8 million or 15.9% to $57.2 million
in the first quarter of 1999 from $49.3 million for the first quarter of 1998.
Sales of Boyds' resin figurines increased $0.9 million, or 4.0%, while sales of
plush products increased $5.4 million, or 26.1%, in a quarter-over-quarter
comparison. Resin figurines and plush products represented 41% and 46%,
respectively, of Boyds' net sales during the first quarter of 1999. The variance
between plush and resin product sales growth is primarily attributable to timing
differences in merchandise available to ship. First quarter 1998 sales of resin
were unusually high and plush was below normal. First quarter 1999 sales of
resin and plush categories more closely reflect the full year product mix Boyds
generated in 1998.

         GROSS PROFIT - Gross profit increased $4.9 million, or 14.7%, to $38.5
million in the first quarter of 1999 from $33.6 million for the first quarter of
1998. Gross profit as a percent of sales decreased to 67.3% for the period from
68.1% for the same period in 1998. The dollar increase in gross profit was
primarily attributable to the increase in sales volume. The decrease in gross
profit as a percent of sales was primarily attributable to increased warehousing
costs due to higher inventory levels needed to satisfy customer demand.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - SG&A expenses 
increased $1.5 million, or 55.1%, to $4.3 million in the first quarter of 
1999 from $2.8 million for the first quarter of 1998. SG&A expenses as a 
percent of sales increased to 7.6% for the period from 5.7% for the same 
period in 1998. The dollar increase in SG&A expenses, and the increase in 
SG&A expenses as a percent of sales, was primarily attributable to increased 
administrative costs, including increased wages incurred in adding additional 
management and the cost of additional directors and officers insurance as a 
result of the initial public offering.

         INCOME FROM OPERATIONS - Income from operations increased $3.3 million,
or 10.5%, to $34.5 million in the first quarter of 1999 from $31.2 million for
the first quarter of 1998. The operating income margin decreased to 60.3% for
the period from 63.3% for the same period in 1998. The dollar increase in 

<PAGE>
                                                                              14


income from operations was primarily attributable to the increase in net sales
for the period. The decrease in operating income margin was due to a decrease in
gross profit margin and an increase in SG&A expenses as a percent of sales for
the period. 

         INTEREST EXPENSE - Interest expense increased to $8.2 million in the
first quarter of 1999 from $0.3 million in the first quarter of 1998. This
increase was due to the debt incurred in connection with the Recapitalization
which took place in April, 1998.

         INCOME TAXES - The $9.5 million charge for the first quarter of 1999
compares with zero for the first quarter of 1998, reflecting the change in
Boyds' tax status from an S Corporation to a C Corporation.

         EXTRAORDINARY ITEM - An extraordinary item of $1.4 million, net of tax,
for the amortization of deferred debt issuance costs related to the early
paydown of $82.5 million of long term debt with the proceeds of the I.P.O. was
incurred in the first quarter of 1999.

         NET INCOME - Net income decreased 50.0% to $15.5 million in the first
quarter of 1999 from $31.0 million in the first quarter of 1998. The decrease in
net income was attributable to $19.0 million of additional costs in 1999 that
did not occur in 1998, including:

         -        interest expense of $7.9 million

         -        income tax expense of $8.7 million due to Boyds becoming a tax
                  paying entity

         -        $2.3 million of expenses related to the amortization of
                  deferred debt issuance costs relating to the early paydown of
                  $82.5 million of long-term debt from the proceeds of the
                  I.P.O.

The net income margin decreased to 27.2% in the first quarter of 1999 from 62.9%
in the first quarter of 1998. The decrease in net income margin was attributable
to the tax and interest expenses as discussed above.

         PRO FORMA INTEREST EXPENSE - Pro forma interest expense for 1999 was
calculated assuming the initial public offering occurred on January 1, 1999, and
for 1998 assuming the recapitalization and the initial public offering occurred
on January 1, 1998. Pro forma interest expense decreased $1.7 million, or 24.0%,
in the first quarter of 1999 to $5.4 million from $7.1 million in the first
quarter of 1998. Pro forma interest expense as a percent of sales decreased to
9.4% for the period from 14.4% for the same period in 1998. The decrease in pro
forma interest in both dollars and as a percent of sales was due to the
reduction of debt from excess cash and reduction of interest rates due to the
deleveraging of Boyds.

         PRO FORMA INCOME TAXES - Due to a change in Boyds' state tax status,
its tax rate fell from 41.5% in 1998 to 36% in 1999.

         PRO FORMA NET INCOME BEFORE EXTRAORDINARY ITEM - Pro forma net income
before extraordinary item increased $4.5 million, or 32.0%, to $18.6 million in
the first quarter of 1999 from $14.1 million in 

<PAGE>
                                                                              15


the first quarter of 1998. The pro forma net income before extraordinary item
margin increased to 32.6% for the period from 28.6% for the same period in 1998.
The increase in pro forma net income before extraordinary item in both dollars
and as a percent of sales was primarily attributable to the increase in net
sales and the decrease in pro forma interest expense.

LIQUIDITY AND CAPITAL RESOURCES

         Historically, Boyds utilized its operating cash flow to support working
capital and ongoing capital expenditures. Cash flow from operations decreased
29.4% to $21.9 million for the three months ended March 31, 1999 from $31.1
million for the three months ended March 31, 1998. The cash flow decrease was
primarily attributable to the decrease in net income and the increase in
accounts receivable and inventory, partially offset by increases in interest
payable and accrued taxes. Net cash received from financing activities was $51.3
million for the three months ended March 31, 1999, while for the three months
ended March 31, 1998, net cash used in financing activities was $30.0 million.
The funds obtained were realized from the sale of Company stock, partially
reduced by the repayment of outstanding debt and the fees and expenses related
to the stock sale.

         Boyds' primary sources of liquidity are cash flow from operations and
borrowings under its credit agreement, which includes a revolving credit
facility. Boyds' primary uses of cash are to fund working capital and to service
debt.

         In connection with the recapitalization, Boyds issued 9% Senior
Subordinated Notes due 2008 in an amount of $165.0 million and entered into the
credit agreement. On April 12, 1999, Boyds repaid $66.0 million of the notes,
leaving a balance outstanding of $99.0 million. Boyds has repaid $150.0 million
of the $325.0 million of term loans under the credit agreement through March 31,
1999, and a further $10.0 million was repaid on April 21, 1999, leaving a
balance outstanding of $165.0 million. The revolving credit facility provides
loans in an aggregate amount of up to $40.0 million. Boyds has not borrowed
under the revolving credit facility. Thus, the amount available under the
revolving credit facility will be available to fund the working capital
requirements of Boyds.

         Borrowings under the credit agreement bear interest at a rate per
annum, equal to a margin over either a base rate or LIBOR, at Boyds' option. The
revolving credit facility commitment will terminate seven years after the date
of the initial funding of the credit agreement. The term loans will be amortized
over an eight-year period with no amortization in the first two years. The
credit agreement contains customary covenants and events of default, including
substantial restrictions on Boyds' ability to declare dividends or make
distributions. The term loans are subject to mandatory prepayment with the
proceeds of certain asset sales and a portion of Boyds' excess cash flow, as
defined in the credit agreement.

         Boyds does not expect to incur significant capital expenditures for the
foreseeable future. Boyds does not incur significant capital expenditures due to
its sourcing arrangements with suppliers.

         Management believes that cash flow from operations and availability
under the revolving loan will provide adequate funds for Boyds' foreseeable
working capital needs, planned capital expenditures and debt service
obligations. Any future acquisitions, joint ventures or other similar
transactions may require additional capital and there can be no assurance that
any such capital will be available to Boyds on acceptable terms or at all.
Boyds' ability to fund its working capital needs, planned capital 

<PAGE>
                                                                              16


expenditures and scheduled debt payments, to refinance indebtedness and to
comply with all of the financial covenants under its debt agreements, depends on
its future operating performance and cash flow, which in turn are subject to
prevailing economic conditions and to financial, business and other factors,
some of which are beyond Boyds' control.

SEASONALITY

         Boyds does not have significant seasonal variation in its orders. Boyds
receives orders throughout the year and generally ships merchandise out on a
first-in, first-out basis. Approximately 40% of orders are taken between
November and April while approximately 60% of orders are placed between May and
October in anticipation of the holiday season. Boyds does not build a large
receivables balance relative to sales because it typically does not offer its
customers long payment terms or dating programs.

EFFECTS OF RECENTLY ISSUED ACCOUNTING STANDARDS

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income."
Comprehensive income includes net income and several other items that current
accounting standards require to be recognized outside of net income. This
standard requires enterprises to display comprehensive income and its components
in financial statements, to classify items of comprehensive income by their
nature in financial statements, and to display the accumulated balances of other
comprehensive income in stockholders' equity separately from retained earnings
and additional paid-in capital. Boyds adopted SFAS No. 130 for the year ended
December 31, 1998. There were no items of other comprehensive income for all
periods presented.

         In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments
of an Enterprise and Related Information." This statement is effective for
fiscal years beginning after December 15, 1997. As provided by SFAS No. 131,
disclosures are not required for interim periods of the initial year of
application, but comparative information will be reported in financial
statements for interim periods during the second year of application. Management
has determined that Boyds operates in a single industry segment.

         During 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for periods beginning
after June 15, 1999. Boyds is currently evaluating the impact, if any, of this
statement.

FOREIGN EXCHANGE

         The dollar value of Boyds' assets abroad is not significant. Boyds'
sales are denominated in United States dollars and, as a result, are not subject
to changes in exchange rates.

         Boyds imports most of its products from manufacturers in China. Boyds'
costs could be adversely affected on a short-term basis if the Chinese renminbi
appreciates significantly relative to the United States dollar. Conversely, its
costs would be favorably affected on a short-term basis if the Chinese renminbi
depreciates significantly relative to the United States dollar. Although Boyds
generally pays for its products in United States dollars, the cost of such
products fluctuates with the value of the 

<PAGE>
                                                                              17


Chinese renminbi. In the future Boyds may, from time to time, enter into foreign
exchange contracts or prepay inventory purchases as a partial hedge against
currency fluctuations. Differences between the amounts of such contracts and
costs of specific material purchases are included in inventory and cost of
sales. Boyds intends to manage foreign exchange risks to the extent appropriate.

YEAR 2000 COMPLIANCE

         The Year 2000 issue is the result of computer programs being written to
use two digits to define year dates. Computer programs running date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in systems failure or miscalculations causing
disruptions of operations. Boyds currently uses information technology for
processing orders and tracking inventory.

         Management believes that Boyds' systems are Year 2000 compliant. Boyds
has purchased Year 2000 compliant software and currently has Year 2000
compliance certificates from its key software suppliers. In addition, Boyds has
substantially completed the internal testing of its information technology
systems and will continue to monitor such systems through the summer of 1999.
Boyds has also specifically addressed internally its non-information technology
related systems and believes that there will be no significant operational
problems relating to the Year 2000 issue. Boyds has not obtained, and does not
intend to obtain, an independent verification and validation of its Year 2000
compliance.

         Other than system replacements due to planned upgrades, Boyds has not
replaced any of its information technology or non-information technology systems
as a result of the Year 2000 issue.

         Boyds depends heavily on its relationships with customers, buying
agencies, manufacturers and shippers. It is communicating with customers, buying
agencies, manufacturers and shippers to determine the extent to which these
third parties are moving toward Year 2000 compliance. To assess Year 2000
compliance and any potential exposure to the Year 2000 problem, Boyds is in the
process of sending surveys to such third parties. Boyds is also seeking Year
2000 compliance certificates from third parties it has identified as "critical"
to its operations, which include all of its buying agencies and manufacturers
and its most important customers and shippers. To date, all of these critical
third parties have been contacted, and Boyds has not been made aware of any Year
2000 compliance problems.

         Boyds believes that any adverse effect on its relationship with
customers, buying agencies, manufacturers and shippers due to the Year 2000
problem will be lessened by the fact that it does not share information
technology. However, failure of any of these parties to have their systems
timely converted may have a material adverse effect on Boyds' business and
operations.

         Boyds believes it has substantially completed its Year 2000 project.
Boyds did not incur significant incremental costs specifically in connection
with seeking to achieve Year 2000 compliance and all upgrades and system
replacements made in connection with its Year 2000 project were part of
previously planned software and hardware upgrades. Furthermore, in order to
achieve Year 2000 compliance, Boyds has needed, and expects that it will
continue to need, only existing employees who otherwise have been assigned to
the planned upgrade of Boyds' software and hardware.

         Notwithstanding Boyds' progress to date, there are several ways in
which its systems could still be affected by the Year 2000 problem. First, the
software code Boyds uses in its information systems 

<PAGE>
                                                                              18


may not in fact be Year 2000 compliant in all instances. Second, Boyds may be
unable to complete the remaining upgrades to its information technology systems
by the Year 2000. Third, even if Boyds completes the system upgrade by the Year
2000, it may be unable to fully test and monitor the upgrades, making it
difficult for Boyds to identify and remedy any problems that might exist.
Fourth, Boyds' customers, buying agencies, independent manufacturers and
shippers may be unable to achieve Year 2000 compliance in time.

         The most reasonably likely worst-case scenario resulting from Boyds'
inability, or the inability of its customers, buying agencies, manufacturers or
shippers, to become Year 2000 compliant, includes the following adverse effects:

         -        SUPPLY PROBLEMS. Boyds would be unable to receive products due
                  to year 2000-related failures on the part of its manufacturers
                  and suppliers causing Boyds to be unable to fulfill the orders
                  of many of its customers for Boyds' products.

         -        ORDER DIFFICULTIES. Boyds' customers would be unable to place
                  their orders with Boyds because of its own system failures or
                  those of its customers resulting in delayed or potentially
                  lost orders for Boyds' products.

         -        DELIVERY DELAYS. Boyds would be unable to deliver ordered
                  products to its customers on a timely basis due to a system
                  failure at Boyds or at one of its product shippers leading to
                  delays in arrival of Boyds' products and possibly dissatisfied
                  customers.

         Boyds has not developed, and does not intend to develop, contingency
plans relating to the Year 2000 problem unless Boyds becomes aware of a Year
2000 compliance problem in its own systems or those of its manufacturers, buying
agencies, customers or shippers.

         Boyds' assessment of its Year 2000 compliance is based on numerous
assumptions about future events, including third party modification plans and
other factors. However, there can be no guarantee that this assessment is
correct and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes and similar
uncertainties.

INFLATION

         Boyds does not believe that inflation has had a material impact on its
operations.

FORWARD LOOKING STATEMENTS

         Some of the matters discussed in this report include forward-looking
statements. Statements that are predictive in nature, that depend upon or refer
to future events or conditions or that include words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates" and similar
expressions are forward-looking statements.

<PAGE>
                                                                              19


         The forward-looking statements in this report are based on a number of
assumptions and estimates which are inherently subject to significant
uncertainties and contingencies, many of which are beyond the control of Boyds,
and reflect future business decisions that are subject to change. A variety of
factors could cause actual results to differ materially from those anticipated
in Boyds' forward-looking statements, including: the effects of economic
conditions; the inability to grow Boyds' business as planned; the loss of either
of either of Boyds' two independent buying agencies or any of its manufacturing
sources; economic or political instability in the countries with which Boyds
does business; changes to, or the imposition of new, regulations, duties, taxes
or tariffs associated with the import or export of goods from or to the
countries with which Boyds does business; the impact of Year 2000 compliance by
Boyds or those entities with which it does business; and other risk factors that
are discussed in this report and, from time to time, in other Securities and
Exchange Commission reports and filings. One or more of the factors discussed
above may cause actual results to differ materially from those expressed in or
implied by the statements in this report.

         Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of such statement.
Boyds undertakes no obligation to publicly release the results of any revisions
to these forward-looking statements that may be made to reflect events or
circumstances after the date of this report, or the date of such statements, as
the case may be, or to reflect the occurrence of unanticipated events.

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.

                                     PART II
                               OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS.

         Not applicable.

ITEM 2.        CHANGES IN SECURITIES AND USE OF PROCEEDS.

         On March 5, 1999, Boyds commenced the initial public offering of its
common stock, par value $.0001 per share, pursuant to its Registration Statement
on Form S-1 (File No. 333-69535), which was declared effective by the Securities
and Exchange Commission on March 4, 1999. Boyds registered 18,400,000 shares of
common stock at an aggregate maximum offering price of $368,000,000 pursuant to
the registration statement. Pursuant to the offering, 16,000,000 shares were
sold for an aggregate offering price of $288,000,000, including 9,250,000 shares
issued and sold by Boyds and 6,750,000 shares sold by selling stockholders. The
managing underwriters for the offering were Donaldson Lufkin & Jenrette
Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

         The aggregate expenses incurred by Boyds in connection with the
offering totaled $11,990,000. All such payments were direct payments to others
as follows (all amounts followed by an asterisk are estimates):

<PAGE>
                                                                              20


<TABLE>

<S>                                                                              <C>

         UNDERWRITING FEES PAID TO THE UNDERWRITERS                             $ 9,990,000
         
         OTHER FEES AND EXPENSES AS FOLLOWS:
         
              Securities and Exchange Commission registration fee               $    102,304
              National Association of Securities Dealers, Inc. filing fee             30,500
              New York Stock Exchange listing application fee                        133,600
              Printing and engraving fees and expenses                              300,000*
              Legal fees and expenses                                               501,000*
              Accounting fees and expenses                                         1,051,819
              Blue Sky fees and expenses                                               7,500
              Transfer Agent and Registrar fees and expenses                          25,200
              Miscellaneous expenses                                                  18,077*
                                                                                ------------
                    Total other fees and expenses                               $  2,170,000

         Boyds did not receive any proceeds from the sale of stock by the
selling stockholders in the offering. The net proceeds received by Boyds in the
offering were $154,340,000 as follows:

         Aggregate offering proceeds to Boyds                                   $166,500,000
         Underwriting fees                                                        (9,990,000)
         Other fees and expenses                                                  (2,170,000)
                                                                                ------------
         Net proceeds to Boyds                                                  $154,340,000

</TABLE>

         Boyds applied $71.9 million of the net proceeds to the redemption of
$66.0 million principal amount of its outstanding 9% Senior Subordinated Notes
due 2008 and applied the remaining net proceeds to the repayment of a term loan
under its credit facility.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         On February 26, 1999, a resolution was unanimously adopted by the
stockholders of Boyds electing the following individuals to Boyds' Board of
Directors:

         Gary M. Lowenthal
         Robert T. Coccoluto
         Henry R. Kravis
         George R. Roberts
         Scott M. Stuart
         Marc S. Lipschultz
         Timothy Brady

The resolution was adopted by unanimous written consent in lieu of a meeting
pursuant to Section 2-505 of the Maryland General Corporation Law.

<PAGE>
                                                                              21


ITEM 5.           OTHER INFORMATION.

         Not applicable.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits:

                     Exhibit
                     Number      Description
                     -------     -----------

                         3.1     Amendment and Restated Articles of
                                 Incorporation (incorporated by reference from
                                 Exhibit 3.1 of Amendment No. 1 to Boyd's
                                 Registration Statement on Form S-1, filed on
                                 February 8, 1999, File No. 333-69535).

                         3.2     Bylaws of Boyds (incorporated by reference from
                                 Exhibit 3.2 of Amendment No. 4 to Boyd's
                                 Registration Statement on Form S-1, filed on
                                 March 3, 1999, File No.
                                 333-69535).

                         4       Indenture, dated as of April 21, 1998, between
                                 Boyds and The Bank of New York, as trustee
                                 (incorporated by reference from Exhibit 4.3 of
                                 Amendment No. 1 to Boyd's Registration
                                 Statement on Form S-1, filed on February 8,
                                 1999, File No.
                                 333-69535).

                       27        Financial Data Schedule

         (b)      Reports on Form 8-K:

                  Not applicable.

<PAGE>
                                                                              22


                                    SIGNATURE

         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.

Date:    May 14, 1999                THE BOYDS COLLECTION, LTD.


                                     By: /s/ Christine L. Bell
                                         ---------------------------------------
                                         Christine L. Bell
                                         Chief Operating Officer, Controller and
                                         Secretary


                                     By: /s/ Peter H. Frost
                                         ---------------------------------------
                                         Peter H. Frost
                                         Vice President--Finance