<PAGE>

                                   UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
                                          
                                     FORM 10-Q
                                          
(Mark One)
/ X /     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
                EXCHANGE ACT OF 1934
For the quarterly period ended January 30, 1998
                                         OR
/   /     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934
For the transition period from                       to                    

                          Commission file number:  0-22717
                                          
                                ACORN PRODUCTS, INC.
               (Exact name of registrant as specified in its charter)

     DELAWARE                                          22-3265462
     (State or other jurisdiction of                 I.R.S. Employer 
     incorporation or organization)                 Identification No.)

                      500 DUBLIN AVENUE, COLUMBUS, OHIO 43215
           (Address of principal executive offices, including zip code)

                                   (614) 222-4400
                (Registrant's telephone number, including area code)
                                      
                                   NOT APPLICABLE
     (Former name, former address and former fiscal year, if changed since last
                                      report)
                                         
     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 the
filing requirements for at least the past 90 days.  YES   X     NO        
                                                        ----        ----

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date:  6,464,105 shares of
Common Stock, $.001 par value, were outstanding at March 11, 1998.

<PAGE>
                                     FORM 10-Q
                                          
                                ACORN PRODUCTS, INC.
                                          
                                  TABLE OF CONTENTS

<TABLE>
<S>                                                                                       <C>
                                                                                          PAGE NO.

PART I.   FINANCIAL INFORMATION

     Item 1.   Financial Statements.                             

                  Consolidated Balance Sheets                                                  3
                      August 1, 1997 and January 30, 1998

                  Consolidated Statements of Operations For the Quarter                        4
                      and the Six Months Ended January 31, 1997 and January 30, 1998

                  Consolidated Statements of Cash Flows For the Six Months Ended               5
                      January 31, 1997 and January 30, 1998

                  Interim Notes to Consolidated Financial Statements                           6

     Item 2.   Management's Discussion and Analysis of Financial                              7-9
                  Condition and Results of Operations.

PART II.  OTHER INFORMATION

     Item 4.   Submission of Matters to a Vote of Security Holders.                           10

     Item 6.   Exhibits and Reports on Form 8-K.                                              11

     Signatures                                                                               12
</TABLE>


                                         -2-
<PAGE>


                            PART 1. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                        ACORN PRODUCTS, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                          (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

         
                                                                                   AUGUST 1,      JANUARY 30,
                                                                                     1997            1998
                                                                                --------------- --------------
                                                                                                   (Unaudited)

<S>                                                                             <C>             <C>           
   
  ASSETS
CURRENT ASSETS:
   Cash  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $         1,509 $          578
   Accounts receivable, less allowance for
        doubtful accounts ($713 and $629, respectively). . . . . . . . . .               18,462         19,647
   Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               27,642         33,387
   Prepaids and other current assets . . . . . . . . . . . . . . . . . . .                3,773          2,125
                                                                                --------------- --------------
        Total current assets . . . . . . . . . . . . . . . . . . . . . . .               51,386         55,737
   Property, plant and equipment, net of accumulated depreciation. . . . .               15,650         16,357
   Goodwill, net of accumulated amortization . . . . . . . . . . . . . . .               29,374         28,968
   Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . .                2,480          2,902
   Net assets of discontinued operations . . . . . . . . . . . . . . . . .                   --             30
                                                                                --------------- --------------
        Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .       $       98,890  $     103,994
                                                                                --------------- --------------
                                                                                --------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Revolving credit facility . . . . . . . . . . . . . . . . . . . . . . .       $       12,837  $      17,315
   Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .                5,872          8,957
   Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .                4,707          4,065
   Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . .                  350           (158)
   Other current liabilities . . . . . . . . . . . . . . . . . . . . . . .                  711            712
                                                                                --------------- --------------
        Total current liabilities. . . . . . . . . . . . . . . . . . . . .               24,477         30,891
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                6,098          6,098
Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . .                4,496          4,380
Net liabilities of discontinued operations . . . . . . . . . . . . . . . .                  595             --
                                                                                --------------- --------------
        Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . .               35,666         41,369
Stockholders' equity:
        Common stock, par value of $.001 per share, 20,000,000 shares
         authorized, 6,464,105 shares issued and outstanding at August 1,
         1997 and January 30, 1998, respectively . . . . . . . . . . . . .               78,391         78,391
Contributed capital-stock options. . . . . . . . . . . . . . . . . . . . .                  460            460
Minimum pension liability. . . . . . . . . . . . . . . . . . . . . . . . .                 (133)          (133)
Retained earnings (deficit). . . . . . . . . . . . . . . . . . . . . . . .              (15,494)       (16,093)
                                                                                --------------- --------------
        Total stockholders' equity . . . . . . . . . . . . . . . . . . . .               63,224         62,625
                                                                                --------------- --------------
        Total liabilities and stockholders' equity . . . . . . . . . . . .       $       98,890  $     103,994
                                                                                --------------- --------------
                                                                                --------------- --------------

</TABLE>
                              See accompanying notes.
                                          
                                         -3-
<PAGE>
                       ACORN PRODUCTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                     
                                                                        FOR THE QUARTER ENDED        FOR THE SIX MONTHS ENDED
                                                                       ------------------------------------------------------
                                                                       JANUARY 31,    JANUARY 30,    JANUARY 31,   JANUARY 30,
                                                                         1997           1998           1997          1998
                                                                       ---------      ---------      ---------     ---------
                                                                              (Unaudited)                    (Unaudited)
<S>                                                                    <C>            <C>            <C>           <C>     
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . .            $ 21,018        $21,143        $40,697       $ 41,559
Cost of goods sold . . . . . . . . . . . . . . . . . . . . .              15,635         16,340         30,142         31,617
                                                                        -----------------------        ----------------------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . .               5,383          4,803         10,555          9,942
Selling, general and administrative
     expenses. . . . . . . . . . . . . . . . . . . . . . . .               4,238          4,411          8,641          9,230
Interest expense . . . . . . . . . . . . . . . . . . . . . .               1,436            522          3,243          1,041
Amortization of intangibles. . . . . . . . . . . . . . . . .                 201            219            402            437
Other expenses, net. . . . . . . . . . . . . . . . . . . . .               1,207             38          1,258             79
                                                                        -----------------------        ----------------------
Income (loss) from continuing
  operations before income taxes . . . . . . . . . . . . . .              (1,699)          (387)        (2,989)          (845)
Income taxes (benefit) . . . . . . . . . . . . . . . . . . .                  --           (112)            --           (246)
                                                                        -----------------------        ----------------------
Income (loss) from continuing
  operations . . . . . . . . . . . . . . . . . . . . . . . .              (1,699)          (275)        (2,989)          (599)
                                                        
Discontinued operations: 
  Loss from operations . . . . . . . . . . . . . . . . . . .                 (78)            --         (1,063)            --
  Loss from disposal . . . . . . . . . . . . . . . . . . . .              (6,019)            --         (6,019)            --
                                                                        -----------------------        ----------------------
    Loss from discontinued
      operations . . . . . . . . . . . . . . . . . . . . . .              (6,097)            --         (7,082)            --
                                                                        -----------------------        ----------------------
Net income (loss). . . . . . . . . . . . . . . . . . . . . .            $ (7,796)        $ (275)      $(10,071)       $  (599)
                                                                        -----------------------        ----------------------
Net income (loss) applicable to common stock . . . . . . . .            $ (8,075)        $ (275)      $(10,629)       $  (599)
                                                                        -----------------------        ----------------------
                                                                        -----------------------        ----------------------
PER SHARE DATA (Basic and Diluted):
Income (loss) from continuing
  operations . . . . . . . . . . . . . . . . . . . . . . . .             $ (1.14)       $ (0.04)      $  (2.00)       $ (0.09)
Loss from discontinued operations. . . . . . . . . . . . . .               (4.07)            --          (4.74)            --
Preferred stock dividend . . . . . . . . . . . . . . . . . .               (0.18)            --          (0.37)            --
                                                                        -----------------------        ----------------------
Net income (loss) applicable to common stock . . . . . . . .             $ (5.39)       $ (0.04)      $  (7.11)       $ (0.09)
                                                                        -----------------------        ----------------------
                                                                        -----------------------        ----------------------
Weighted average shares
  outstanding. . . . . . . . . . . . . . . . . . . . . . . .           1,496,864      6,464,105      1,493,845      6,464,105
                                                                       ------------------------      ------------------------
                                                                       ------------------------      ------------------------
</TABLE>
                               See accompanying notes.

                                         -4-

<PAGE>

                         ACORN PRODUCTS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      FOR THE SIX MONTHS ENDED
                                                                                    ----------------------------
                                                                                    JANUARY 31,      JANUARY 30,
                                                                                       1997             1998
                                                                                    ------------     -----------
                                                                                             (Unaudited)
<S>                                                                                   <C>            <C>
CASH FLOWS FROM OPERATING Activities:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $ (10,071)     $    (599)
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) continuing operations:
  Loss from discontinued operations. . . . . . . . . . . . . . . . . . . . . . .          7,082             --
  Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . .          1,780          1,849
  Issuance of stock options. . . . . . . . . . . . . . . . . . . . . . . . . . .            120             --
  Changes in operating assets and liabilities:
   Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (5,945)        (1,185)
   Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (8,354)        (5,745)
   Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (497)         1,195
   Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . .          4,400          2,288
   Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (432)          (508)
   Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (538)          (116)
                                                                                       ---------      ---------
Net cash provided by (used in) continuing operations . . . . . . . . . . . . . .        (12,455)        (2,821)
Net cash provided by (used in) discontinued operations . . . . . . . . . . . . .          9,568           (469)
                                                                                       ---------      ---------
Net cash provided by (used in) operating activities. . . . . . . . . . . . . . .         (2,887)        (3,290)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . . . . . . . . . . . .           (887)        (2,119)
                                                                                       ---------      ---------
Net cash provided by (used in) investing activities. . . . . . . . . . . . . . .           (887)        (2,119)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net activity on term loan. . . . . . . . . . . . . . . . . . . . . . . . . . . .          2,000             --
Net activity on revolving loan . . . . . . . . . . . . . . . . . . . . . . . . .          1,686          4,478
Issuance of stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             88             --
                                                                                       ---------      ---------
Net cash provided by (used in) financing activities. . . . . . . . . . . . . . .          3,774          4,478
                                                                                       ---------      ---------
Net increase (decrease) in cash. . . . . . . . . . . . . . . . . . . . . . . . .             --           (931)
Cash at beginning at period. . . . . . . . . . . . . . . . . . . . . . . . . . .             --          1,509
                                                                                       ---------      ---------
Cash at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $      --      $     578
                                                                                       ---------      ---------
                                                                                       ---------      ---------
Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $   1,665      $     834
                                                                                       ---------      ---------
                                                                                       ---------      ---------
</TABLE>
                               See accompanying notes.

                                       -5-
<PAGE>

                        ACORN PRODUCTS, INC. AND SUBSIDIARIES
                  INTERIM NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     1.   Footnote disclosure which would substantially duplicate the disclosure
contained in the Annual Report to Stockholders for the year ended August 1, 1997
has not been included.  The unaudited interim consolidated financial statements
reflect all adjustments, in the opinion of management, that are necessary to a
fair statement of results for the periods presented and to present fairly the
consolidated financial position of Acorn Products, Inc. (the "Company") as of
January 30, 1998.  All such adjustments are of a normal recurring nature.

     2.   Inventories of the Company are stated at the lower of cost or market. 
Cost is determined using the first-in, first-out (FIFO) method.  Inventories
consist of the following:
<TABLE>
<CAPTION>
                                                    August 1,   January 30,
                                                      1997          1998
                                                      ----          ----
                                                         in thousands
<S>                                                 <C>           <C>
Finished goods . . . . . . . . . . . . . . . . . .  $ 14,460      $ 17,930
Work in process. . . . . . . . . . . . . . . . . .     7,041         7,572
Raw materials and supplies . . . . . . . . . . . .     6,741         8,656
                                                     -------       -------
                                                      28,242        34,158
Valuation reserves . . . . . . . . . . . . . . . .      (600)         (771)
Total inventories. . . . . . . . . . . . . . . . .    27,642        33,387
                                                     -------       -------
                                                     -------       -------
</TABLE>

     3.   In February 1998, the Company completed the acquisition of H.B.
Sherman Manufacturing Company ("Sherman") for approximately $3.1 million, with
up to an additional $366,000 payable subject to the achievement of certain
profit levels in 1998.  The Company will account for the acquisition as a
purchase.  Based in Poplar Bluff, Missouri, Sherman manufactures and markets
high-quality hose attachments and related products, such as spray nozzles,
sprinklers and couplings.

     4.   In 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("Statement 
128").  Statement 128 replaced the previously reported primary and fully 
diluted earnings per share with basic and diluted earnings per share.  Unlike 
primary earnings per share, basic earnings per share excludes any dilutive 
effects of options, warrants and convertible securities.  Diluted earnings 
per share is very similar to the previously reported fully diluted earnings 
per share.  The Company adopted the provisions of Statement 128, as required, 
for the quarter ended January 30, 1998.  All earnings per share amounts for 
all periods have been presented and, where necessary, restated to conform to 
the Statement 128 requirements.


                                         -6-
<PAGE>
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

     The following discussion should be read in conjunction with the
consolidated financial statements of the Company and the notes thereto and the
other financial information included elsewhere in this Quarterly Report on Form
10-Q, as well as the factors set forth under the caption "Forward-Looking
Information" below.

FORWARD-LOOKING INFORMATION

     Statements in the following discussion that indicate the Company's or
management's intentions, hopes, beliefs, expectations or predictions of the
future are forward-looking statements.  It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements.  Additional information concerning factors that
could cause actual results to differ materially from those suggested in the
forward-looking statements is contained under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's Annual Report on Form 10-K for the year ended August 1, 1997, as well
as in the Company's Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 18, 1997, as the same may be amended from time
to time.

THREE MONTHS ENDED JANUARY 30, 1998 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1997

     NET SALES.  Net sales increased 0.6%, or $125,000, to $21.1 million in the
second quarter of fiscal 1998 compared to $21.0 million in the second quarter of
fiscal 1997.  The increase in net sales reflected $1.4 million of net sales by
the Company's injection molding division, which was acquired in February 1997,
and increased net sales of the Company's core products, partially offset by a
decline in net sales of snow tools of approximately $1.8 million.

     GROSS PROFIT.  Gross profit decreased 10.8%, or $580,000, to $4.8 million
in the second quarter of fiscal 1998 compared to $5.4 million in the second
quarter of fiscal 1997.  Gross margin decreased to 22.7% in the second quarter
of fiscal 1998 compared to 25.6% in the comparable period in fiscal 1997.  The
decrease in gross margin primarily was due to increased manufacturing
administration costs related to new product development, as well as lower gross
margins realized on sales by the Company's injection molding division.  Gross
margin also was adversely affected by lower overhead absorption rates realized
as the Company decreased production to prevent inventory build-up.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased 4.1%, or $173,000, to $4.4 million in the
second quarter of fiscal 1998 compared to $4.2 million in the second quarter of
fiscal 1997.  As a percentage of net sales, selling, general and administrative
expenses increased to 20.9% in the second quarter of fiscal 1998 from 20.2% in
the second quarter of fiscal 1997.  The increase primarily resulted from the
addition of selling expenses related to the Company's injection molding division
and increased administrative expenses resulting from the Company's public
reporting requirements and pursuit of the Company's acquisition strategy.

     OTHER EXPENSES, NET.  Other expenses, net, decreased to $38,000 in the
second quarter of fiscal 1998 compared to $1.2 million in the second quarter of
fiscal 1997.  The Company incurred bank fees of $951,000 in the second quarter
of fiscal 1997.

     LOSS FROM CONTINUING OPERATIONS.  Loss from continuing operations before
income taxes decreased 77.2%, or $1.3 million, to $387,000 in the second quarter
of fiscal 1998 compared to $1.7 million in the same period in fiscal 1997.  The
Company recognized a tax benefit of $112,000 in the second quarter of fiscal
1998, bringing the loss from continuing operations to $275,000 in the second
quarter of fiscal 1998 compared to a loss from continuing operations of 
$1.7 million in the second quarter of fiscal 1997.  The decrease in loss from
continuing operations primarily was due to a $1.2 million reduction in other
expenses, net and a $914,000 reduction in interest expense as a result of the
retirement of indebtedness in connection with the Company's initial public
offering in July 1997.

     NET LOSS.  Net loss decreased $7.5 million to $275,000 in the second
quarter of fiscal 1998 compared to $7.8 million in the second quarter of fiscal
1997.  The Company incurred a loss from discontinued operations of $6.1 million
in the second quarter of fiscal 1997.

SIX MONTHS ENDED JANUARY 30, 1998 COMPARED TO SIX MONTHS ENDED JANUARY 31, 1997

     NET SALES.  Net sales increased 2.1%, or $862,000, to $41.6 million in the
first six months of fiscal 1998 compared to $40.7 million in the first six
months of fiscal 1997.  The increase in net sales reflected $3.1 million of net
sales by the Company's injection molding division, which was acquired in
February 1997, partially offset by a decline in net snow tool sales of
approximately $2.4 million.

                                -7-
<PAGE>

     GROSS PROFIT.  Gross profit decreased 5.8%, or $613,000, to $9.9 million in
the first six months of fiscal 1998 compared to $10.6 million in the first six
months of fiscal 1997.  Gross margin decreased to 23.9% in the first six months
of fiscal 1998 compared to 25.9% in the first six months of fiscal 1997.  The
decrease in gross margin primarily was due to increased manufacturing
administration costs related to new product development, as well as lower gross
margins realized on sales by the Company's injection molding division.  Gross
margin also was adversely affected by lower overhead absorption rates realized
as the Company decreased production to prevent inventory build-up.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased 6.8%, or $589,000, to $9.2 million in the
first six months of fiscal 1998 compared to $8.6 million in the first six months
of fiscal 1997.  As a percentage of net sales, selling, general and
administrative expenses increased to 22.2% in the first six months of fiscal
1998 from 21.2% in the same period of fiscal 1997.  The increase primarily
resulted from the addition of selling expenses related to the Company's
injection molding division and increased administrative expenses resulting from
the Company's public reporting requirements and pursuit of the Company's
acquisition strategy.

     OTHER EXPENSES, NET.  Other expenses, net, decreased $1.2 million to
$79,000 in the first six months of fiscal 1998 compared to $1.3 million in the
first six months of fiscal 1997.  The Company incurred bank fees of $951,000 in
the second quarter of fiscal 1997.

     LOSS FROM CONTINUING OPERATIONS.  Loss from continuing operations before
income taxes decreased $2.1 million to $845,000 in the first six months of
fiscal 1998 from $3.0 million in the first six months of fiscal 1997.  The
Company recognized a tax benefit of $246,000 in the first six months of fiscal
1998, bringing the loss from continuing operations to $599,000 for the first six
months of fiscal 1998 compared to a loss from continuing operations of $3.0
million in the comparable period of fiscal 1997.  The decrease in loss from
continuing operations primarily was due to a $2.2 million reduction in interest
expense as a result of the retirement of indebtedness in connection with the
Company's initial public offering in July 1997 and a $1.2 million reduction in
other expenses, net.

     NET LOSS.  Net loss decreased $9.4 million to $599,000 in the first six
months of fiscal 1998 compared to $10.1 million in the first six months of
fiscal 1997.  The Company incurred a loss from discontinued operations of 
$7.1 million in the first six months of fiscal 1997.

ACQUISITIONS

     In February 1998, the Company completed the acquisition of H.B. Sherman
Manufacturing Company ("Sherman") for approximately $3.1 million, with up to an
additional $366,000 payable subject to the achievement of certain profit levels
in 1998.  Based in Poplar Bluff, Missouri, Sherman manufactures and markets
high-quality hose attachments and related products, such as spray nozzles,
sprinklers and couplings.  The Company borrowed approximately $3.3 million
through the acquisition line of its bank credit facility to finance the Sherman
acquisition.

SEASONAL AND QUARTERLY FLUCTUATIONS; IMPACT OF WEATHER

     The lawn and garden industry is seasonal in nature, with a high proportion
of sales and operating income generated in January through May.  Accordingly,
the Company's sales tend to be greater during its third and fourth fiscal
quarters.  As a result, the Company's operating results depend significantly on
the spring selling season.  To support this sales peak, the Company must
anticipate demand and build inventories of finished goods throughout the fall
and winter.  Accordingly, the Company's levels of raw materials and finished
goods inventories tend to be at their highest, relative to sales, during the
Company's first and second fiscal quarters.  These factors increase variations
in the Company's quarterly results of operations and potentially expose the
Company to greater adverse effects of changes in economic and industry trends. 
Moreover, actual demand for the Company's products may vary substantially from
the anticipated demand, leaving the Company with excess inventory or
insufficient inventory to satisfy customer orders.

     Weather is the single most important factor in determining market demand
for the Company's products and also is the least predictable.  For example,
while floods in the Midwest adversely affected the sale of most types of lawn
and garden equipment in 1992, the severe winter of 1994 resulted in a surge in
demand for snow shovels.  In addition, bad weather during the spring gardening
season, such as that experienced throughout most of the U.S. in the spring of
1995, can adversely affect overall annual sales.

LIQUIDITY AND CAPITAL RESOURCES

     There have been no significant changes in the Company's liquidity and
capital resources as of January 30, 1998 from those discussed in the Company's
Annual Report on Form 10-K for the year ended August 1, 1997.

                                     -8-
<PAGE>

     In July 1997, the Company used approximately $9.6 million of the net
proceeds from its initial public offering to redeem outstanding preferred stock
and pay accumulated dividends thereon, approximately $11.0 million of the net
proceeds from its initial public offering to repay a portion of certain
subordinated notes and accrued interest thereon and approximately $20.6 million
of the net proceeds from its initial public offering to repay a portion of the
indebtedness outstanding under its bank credit facility and accrued interest
thereon.  The Company also exchanged the remaining $24 million aggregate
principal amount of its outstanding subordinated notes for 1,716,049 shares of
its Common Stock.

DISPOSITION OF NON-LAWN AND GARDEN BUSINESS OPERATIONS

     In December 1996, the Company sold substantially all of the assets of VSI
Fasteners, Inc. ("VSI"), a distributor of packaged fasteners, for approximately
$6.9 million, plus the assumption of approximately $2.3 million of related
liabilities.  In August 1997, the Company sold substantially all of the assets
of McGuire-Nicholas Company, Inc. ("McGuire-Nicholas"), a manufacturer and
distributor of leather, canvas and synthetic fabric tool holders and work
aprons, for approximately $4.3 million, plus the assumption of approximately 
$4 million of related liabilities.  VSI's and McGuire-Nicholas' results of
operations are shown as "Loss from Discontinued Operations" in the consolidated
financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. 
Net liabilities of the discontinued VSI and McGuire-Nicholas operations are
shown as "net liabilities of discontinued operations" on the consolidated
balance sheets appearing elsewhere in this Quarterly Report on Form 10-Q.

IMPACT OF THE YEAR 2000 ON COMPUTER SYSTEMS

     Some of the Company's older computer programs were written using two 
digits rather than four to define the applicable year.  As a result, those 
computer programs have time-sensitive software that recognize a date using 
"00" as the year 1900 rather than the year 2000.  This could cause a system 
failure or miscalculations causing disruptions of operations, including a 
temporary inability to process transactions, send invoices or engage in 
similar normal business activities.

     The Company has determined that it will have to modify or replace 
portions of its computer software and hardware so that its computer systems 
will function properly with respect to dates in the year 2000 and thereafter. 
In addition, the Company has initiated communications with its significant 
customers and suppliers to determine the extent to which the Company's 
interface systems are vulnerable to the failure of such customers and 
suppliers to remediate their own year 2000 issues.

     The Company anticipates completing its year 2000 project by December 31, 
1998, which is prior to any anticipated impact on its operating systems.  The 
total cost of the year 2000 project is estimated at approximately $500,000, 
which includes approximately $300,000 for the purchase of new computer 
software and hardware that will be capitalized and approximately $200,000 
that will be expensed as incurred.

     The cost of the Company's year 2000 project and its anticipated date of 
completion are based on management's current estimates.  There can be no 
assurance that the Company will not experience cost overruns or delays in the 
completion of its year 2000 project.  Factors that could cause such cost 
overruns or delays include, among other things, an unavailability of properly 
trained personnel, unforeseen difficulty locating and correcting relevant 
computer codes and similar uncertainties.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     None.


                                -9-
<PAGE>

                            PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.

     None.

ITEM 2.   CHANGES IN SECURITIES.

     None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

     None.

Item 4.   Submission of Matters to a Vote of Security Holders.

     The Company held an Annual Meeting of Stockholders on December 9, 1997 for
the following purposes:

          1.   To elect six (6) directors of the Company, each to serve for 
               one-year terms expiring at the  1998 Annual Meeting of 
               Stockholders.

          2.   To ratify the appointment of Ernst & Young LLP as the Company's
               independent certified public accountants for fiscal 1998.

     Each of management's proposals as presented in the proxy statement were
approved with the following vote:

          Proposal 1:    The election of directors of the Company, to serve
                         until the 1998 Annual Meeting of Stockholders or until
                         their successors are elected and qualified.

<TABLE>
<CAPTION>
                                         Number of Shares Voted
                               ------------------------------------------
                                               WITHHOLD
                                 FOR           AUTHORITY          TOTAL
                               ---------       ---------        ---------
        <S>                    <C>              <C>             <C>
        William W. Abbott      6,170,501        25,004          6,195,505

        Matthew S. Barrett     6,170,501        25,004          6,195,505

        Stephen A. Kaplan      6,170,501        25,004          6,195,505

        John I. Leahy          6,170,501        25,004          6,195,505

        Gabe Mihaly            6,170,501        25,004          6,195,505

        Conor D. Reilly        6,170,501        25,004          6,195,505

</TABLE>
          Proposal 2:    To ratify appointment of Ernst & Young LLP to serve as
                         the Company's independent certified public accountants
                         for the 1998 fiscal year.

<TABLE>
<CAPTION>
                              Number of Shares Voted
                 ---------------------------------------------------
                   FOR         AGAINST    ABSTAINED          TOTAL
                ---------     --------    ---------        ---------
                <S>           <C>         <C>              <C>
                6,191,080        765        3,660          6,195,505

</TABLE>

ITEM 5.  OTHER MATTERS.

     None.


                                       -10-
<PAGE>

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

     (a)  EXHIBITS.

            EXHIBIT             EXHIBIT
            NUMBER            DESCRIPTION

             27           Financial Data Schedule.

     (b)  REPORTS ON FORM 8-K.

          The Registrant did not file any Current Reports on Form 8-K with the
Securities and Exchange Commission for the quarter ended January 30, 1998.


                                      -11-
<PAGE>

                                  SIGNATURES

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

                                   ACORN PRODUCTS, INC.


Date:  March 12, 1998              By:   /s/ Gabe Mihaly
                                         -------------------------------------
                                         Gabe Mihaly, President and Chief
                                         Executive Officer (Principal Executive
                                         Officer)

Date:  March 12, 1998              By:   /s/ Stephen M. Kasprisin
                                         --------------------------------------
                                         Stephen M. Kasprisin, Vice President 
                                         and Chief Financial Officer (Principal
                                         Financial and Accounting Officer)


                                   -12-
<PAGE>

                   ACORN PRODUCTS, INC. AND SUBSIDIARIES
                                FORM 10-Q 
                               EXHIBIT INDEX

<TABLE>
<CAPTION>


      EXHIBIT                    EXHIBIT
      NUMBER                   DESCRIPTION
      <S>               <C>
        27              Financial Data Schedule.

</TABLE>