<PAGE>



                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-Q

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


For the quarter ended December 31, 1997        Commission File No. 1-13453
                      -----------------                            -------


                         TODHUNTER INTERNATIONAL, INC.
------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


DELAWARE                                                            59-1284057
------------------------------------------------------------------------------
(State or other jurisdiction of                IRS employer identification No.
incorporation or organization)

222 Lakeview Avenue,    Suite 1500,       West Palm Beach, FL            33401
------------------------------------------------------------------------------
  (Address of principal executive offices)                        (Zip Code)

Registrant's telephone number including area code:  (561) 655-8977


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 such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 30 days.

Yes   X     No 
    -----      -----
The number of shares outstanding of registrant's Common Stock, $.01 par value 
per share, as of  February 6, 1998 was 4,949,714.

<PAGE>

                         TODHUNTER INTERNATIONAL, INC.

                                     INDEX




PART I    FINANCIAL INFORMATION                                       Page No.
                                                                      --------
          Item 1  Financial Statements 

                  Consolidated Balance Sheets - 
                  December 31, 1997 and September 30, 1997                1

                  Consolidated Statements of Income -
                  Three Months Ended December 31, 1997 and 1996           3

                  Consolidated Statements of Cash Flows -
                  Three Months Ended December 31, 1997 and 1996           4

                  Notes to Consolidated Financial Statements              6

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

          Item 3  Quantitative and Qualitative Disclosures About 
                  Market Risk                                             *


PART II   OTHER INFORMATION

          Item 1  Legal Proceedings                                      16

          Item 2  Changes in Securities                                   *

          Item 3  Defaults Upon Senior Securities                         *

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

          Item 5  Other Information                                       *

          Item 6  Exhibits and Reports on Form 8-K                       16

          Signatures                                                     19

* Item is omitted because answer is negative or item is inapplicable.

<PAGE>

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
                         TODHUNTER INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                             December 31,             September 30,
                                                 1997                      1997 
                                            -------------             -------------
                                             (Unaudited)                     *
<S>                                        <C>                      <C>
             ASSETS
                                                                                                         
CURRENT ASSETS                                                                                                          
  Cash and cash equivalents                 $  4,424,269             $  4,904,804
  Trade receivables                            9,585,877               11,051,085
  Other receivables                            2,438,682                2,116,110
  Inventories                                 22,178,695               20,086,901
  Notes receivable, current maturities         1,377,137                1,435,868
  Deferred income taxes                        1,083,000                1,162,000
  Other current assets                         1,591,780                1,580,034
                                            -------------             -------------
      Total current assets                    42,679,440               42,336,802
                                            -------------             -------------
                                                                                                         
LONG-TERM NOTES  RECEIVABLE,                                                                                            
  less current maturities                      6,001,341                6,369,986
                                            -------------             -------------

PROPERTY AND EQUIPMENT                        71,817,284               71,180,129
  Less accumulated depreciation               29,287,504               28,236,375
                                            -------------             -------------
                                              42,529,780               42,943,754
                                            -------------             -------------

PROPERTY HELD FOR LEASE                        2,430,522                2,428,059
  Less accumulated depreciation                1,032,465                  998,882
                                            -------------             -------------
                                               1,398,057                1,429,177
                                            -------------             -------------
                                                                                                         
GOODWILL, less accumulated amortization          413,982                  422,168
                                            -------------             -------------
OTHER ASSETS                                   2,089,718                2,116,568
                                            -------------             -------------
                                            $ 95,112,318             $ 95,618,455
                                            -------------             -------------
                                            -------------             -------------
</TABLE>

*From audited financial statements.
See Notes to Consolidated Financial Statements.

                                       1
<PAGE>
                         TODHUNTER INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEETS
                                           
<TABLE>
<CAPTION>
                                                 December 31,             September 30,
                                                     1997                      1997 
                                                -------------             -------------
                                                 (Unaudited)                     *
<S>                                            <C>                      <C>
     LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES                                                                                                          
  Current maturities of long-term debt          $  1,968,872             $  2,937,744
  Accounts payable                                 3,872,248                5,039,252
  Accrued interest expense                           449,983                1,404,444
  Other accrued expenses                           1,964,154                1,315,600
                                                -------------             -------------
      Total current liabilities                    8,255,257               10,697,040
                                                                                                         
LONG-TERM DEBT, less current maturities           44,309,514               43,135,080

DEFERRED INCOME TAXES                              4,807,000                4,852,000

OTHER LIABILITIES                                    264,960                  225,713
                                                -------------             -------------
                                                  57,636,731               58,909,833
                                                -------------             -------------

MINORITY INTEREST                                     63,779                  418,249
                                                -------------             -------------

STOCKHOLDERS' EQUITY                                                                                                    
  Preferred stock, par value $.01 per share;                                                                              
     authorized 2,500,000 shares,                                                                                            
     no shares issued                                   --                        -- 
  Common stock, par value $.01 per share;                                                                                 
     authorized 10,000,000 shares; 
     issued and outstanding 
     December 31, 1997 and September 30, 1997;                                                                       
     4,949,714                                        49,497                   49,497
Additional paid-in capital                        11,945,777               11,945,777
Retained earnings                                 25,416,534               24,295,099
                                                -------------             -------------
                                                  37,411,808               36,290,373
                                                -------------             -------------
                                                $ 95,112,318             $ 95,618,455
                                                -------------             -------------
                                                -------------             -------------
</TABLE>

*From audited financial statements.
See Notes to Consolidated Financial Statements.

                                       2
<PAGE>

                         TODHUNTER INTERNATIONAL, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                 Three Months Ended December 31,
                                                 -------------------------------
                                                      1997              1996
                                                 ------------       ------------
<S>                                             <C>                <C>
Sales                                            $ 26,360,592       $ 29,573,894
  Less excise taxes                                 8,619,370         10,659,633
                                                 ------------       ------------
  Net Sales                                        17,741,222         18,914,261

Cost of good sold                                  12,618,571         13,960,520
                                                 ------------       ------------
  Gross profit                                      5,122,651          4,953,741

Selling, general and administrative expenses        3,658,902          2,996,628
                                                 ------------       ------------
  Operating income                                  1,463,749          1,957,113
                                                 ------------       ------------

Other income (expense):
  Interest income                                     184,630            206,732
  Interest expense                                 (1,007,445)        (1,065,594)
  Other, net                                          521,424            506,928
                                                 ------------       ------------
                                                     (301,391)          (351,934)
                                                 ------------       ------------

Income before income taxes                          1,162,358          1,605,179
                                                 ------------       ------------

Income tax expense:
  Current                                               6,923             37,104
  Deferred                                             34,000            307,000
                                                 ------------       ------------
                                                       40,923            344,104
                                                 ------------       ------------

  Net income                                     $  1,121,435       $  1,261,075
                                                 ------------       ------------
                                                 ------------       ------------

Earnings per common share:
  Basic                                          $       0.23       $       0.26
                                                 ------------       ------------
                                                 ------------       ------------
  Diluted                                        $       0.22       $       0.25
                                                 ------------       ------------
                                                 ------------       ------------

Common shares and equivalents outstanding:
  Basic                                             4,949,714          4,923,749
                                                 ------------       ------------
                                                 ------------       ------------
  Diluted                                           4,995,387          4,964,733
                                                 ------------       ------------
                                                 ------------       ------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                       3
<PAGE>
                         TODHUNTER INTERNATIONAL, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                     Three Months Ended December 31,
                                                     -------------------------------
                                                         1997               1996
                                                     ------------       ------------
<S>                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income                                         $  1,121,435        $ 1,261,075
  Adjustments to reconcile net income 
    to net cash provided by (used in) 
    operating activities:
    Depreciation                                        1,031,947            986,937
    Amortization                                           23,527             64,827
    (Gain) on investment transactions                      --                 (8,000)
    (Gain) on sale of property and equipment               --                (13,175)
    Equity in earnings of affiliates                       --                  6,142
    Deferred income taxes                                  34,000            307,000
    Minority interest                                    (354,470)               465
    Changes in assets and liabilities:
    (Increase) decrease in:
      Receivables                                       1,142,636            462,548
      Inventories                                      (2,091,794)          (669,097)
      Other current assets                                (11,746)            34,720
    Increase (decrease) in:
      Accounts payable                                 (1,167,004)          (222,625)
      Accrued interest expense                           (954,461)          (708,079)
      Accrued expenses                                    648,554            233,279
      Other liabilities                                    39,247            (13,308)
    Discontinued operations                                 --               126,346
                                                     ------------       ------------
  Net cash provided by (used in)
    operating activities                                 (538,129)         1,849,055
                                                     ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES                                                                                    
  Proceeds from sale of property and equipment              --                24,486
  Proceeds from sale of marketable securities               --                 8,000
  Principal payments received on notes receivable         443,376            373,208
  Purchase of property and equipment                     (586,853)          (795,891)
  Disbursements for notes receivable                      (16,000)           (14,000)
  Redemption of certificates of deposit                     --             4,494,375
  Decrease in other assets                                 11,509             16,120
                                                     ------------       ------------
    Net cash provided by (used in)
      investing activities                           $   (147,968)       $ 4,106,298
                                                     ------------       ------------
</TABLE>
                                       4
<PAGE>
                         TODHUNTER INTERNATIONAL, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                           Three Months Ended December 31,
                                                           -------------------------------
                                                               1997               1996
                                                           ------------       ------------
<S>                                                      <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES                                                                                    
  Net borrowings (payments) on line of credit              $ 1,666,652        $ (2,779,611)
  Proceeds from issuance of common stock                        --                 157,500
  Principal payments on long-term borrowings                (1,461,090)           (300,000)
                                                           ------------       ------------
  Net cash provided by (used in) financing activities          205,562          (2,922,111)
                                                           ------------       ------------
  Net increase (decrease) in cash and cash equivalents        (480,535)          3,033,242
Cash and cash equivalents:
  Beginning                                                  4,904,804           2,594,246
                                                           ------------       ------------
  Ending                                                   $ 4,424,269        $  5,627,488
                                                           ------------       ------------
                                                           ------------       ------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash payments for:                                                                                                      
    Interest                                               $ 1,961,906        $  1,773,673
                                                           ------------       ------------
                                                           ------------       ------------
    Income taxes                                           $    12,107        $     --
                                                           ------------       ------------
                                                           ------------       ------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                       5
<PAGE>

                         TODHUNTER INTERNATIONAL, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)




Note 1. Basis of Presentation

The consolidated financial statements included herein have been prepared by 
the Company, without audit, pursuant to the rules and regulations of the 
Securities and Exchange Commission.  Certain information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles have been condensed or omitted 
pursuant to such rules and regulations.  In the opinion of management, all 
adjustments, consisting only of normal recurring adjustments necessary for a 
fair presentation of the financial information of the periods indicated have 
been included.  For further information regarding the Company's accounting 
policies, refer to the consolidated financial statements and related notes 
included in the Company's Annual Report on Form 10-K for the year ended 
September 30, 1997.

Note 2. Inventories


The major components of inventories are:
<TABLE>
<CAPTION>
                                  December 31, 1997         September 30, 1997
                                  -----------------         ------------------
                                     (Unaudited)
<S>                               <C>                       <C>
Finished goods                      $ 15,042,976               $ 12,318,664
Work in process                          967,602                  1,639,970
Raw materials and supplies             6,168,117                  6,128,267
                                  -----------------         ------------------

                                    $ 22,178,695               $ 20,086,901
                                  -----------------         ------------------
                                  -----------------         ------------------
</TABLE>

                                       6
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                        <C>
Note 3. Financing Arrangements

Long-term debt consists of the following as of December 31, 1997.


  Senior notes, interest payable semiannually at 8.905%, principal
    payments of $6,800,000 on October 30, 1999, $7,933,333 on
    October 30, 2000 and 2001, $4,533,334 on October 30, 2002 and
    $3,400,000 on October 30, 2003 and 2004, unsecured (1)                   $ 34,000,000

  Revolving credit note of $20,000,000, interest payable monthly at
    the prime rate for domestic loans and at 1.5% above the one month
    London Interbank Offered Rate ("LIBOR") for Eurodollar loans,
    principal is due in full November 1, 1999.  The maximum amount
    which can be drawn on the revolving note is based on the borrowing
    base as specified in the agreement, unsecured                               5,913,599

  Bank note payable, interest is calculated based upon a floating rate of
    2.5% above the one month LIBOR rate, quarterly principal payments
    of $250,000, collateralized by real property, equipment, machinery
    and trade receivables in the Virgin Islands (2)                             4,750,000

  Note payable, interest at 6%, principal and interest payments
    required through 1999                                                       1,614,787
                                                                             ------------
                                                                               46,278,386
  Less current maturities                                                       1,968,872
                                                                             ------------

                                                                             $ 44,309,514
                                                                             ------------
                                                                             ------------
</TABLE>

The Company uses interest swap agreements to change the fixed/variable 
interest rate mix of the debt portfolio to reduce the Company's aggregate 
risk to movements in interest rates. Amounts paid or received under interest 
rate swap agreements are accrued as interest rates change and are recognized 
over the life of the swap agreements as an adjustment to interest expense. 
The related amounts payable to, or receivable from, the counterparties are 
included in accrued interest expense. The fair value of the swap agreement 
noted in (2) below was not recognized in the consolidated financial 
statements since it is accounted for as hedge. The criteria required to be 
met for hedge accounting is that a) the item to be hedged exposes the Company 
to interest rate risk and b) the interest rate swap reduces that exposure and 
is designated a  hedge. The fair value and the related change in fair value 
of the agreement noted in (1) below is not significant to the financial 
statements. A summary of the interest rate swaps is as follows:

(1)  The Company has entered into an interest rate swap agreement with a bank 
calling for the Company to exchange, as of May 1 and November 1 through 2004, 
interest payment streams calculated on a principal balance starting at 
$4,000,000 and reducing starting in November 1999. The Company's interest is 
calculated based upon a floating rate of 1.06% above the six-month LIBOR 
rate. The bank's rate is 8.905%.

                                       7
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -  Continued
                                  (Unaudited)


(2)  The Company has entered into an interest rate swap agreement accounted 
for as a hedge with a bank. The agreement calls for the Company to exchange, 
as of  January 1, April 1,  July 1, and October 1, through 2002, interest 
payment streams calculated on a notional balance equal to the principal 
balance of the bank note payable. The Company's rate is fixed at 8.46%.

The long-term debt contains various restrictive covenants related to 
fixed-charge coverage, interest expense coverage, net worth and debt 
limitation. All covenants have been met as of December 31, 1997.

Note 4. Earnings Per Common Share

Basic earnings per common share are calculated by dividing net income by the 
average common shares outstanding. On a  Diluted basis, shares outstanding 
are adjusted to assume the exercise of stock options.

<TABLE>
<CAPTION>
                                                           Three Months Ended December 31,
                                                           -------------------------------
                                                               1997               1996
                                                           -------------------------------
<S>                                                       <C>                 <C>
Net income                                                 $ 1,121,435         $ 1,261,075
                                                           ------------        -----------
                                                           ------------        -----------
Determination of shares:
  Weighted average number of
    common shares outstanding                                4,949,714           4,923,749
  Shares issuable on exercise
    of stock options, net of shares
    assumed to be purchased out of proceeds                     45,673              40,984
                                                           ------------        -----------
  Average common shares outstanding for
    diluted computation                                      4,995,387           4,964,733
                                                           ------------        -----------
                                                           ------------        -----------
Earnings per common share
Basic                                                      $      0.23         $      0.26
                                                           ------------        -----------
                                                           ------------        -----------
Diluted                                                    $      0.22         $      0.25
                                                           ------------        -----------
                                                           ------------        -----------
</TABLE>

The Company's Virgin Islands operation has a five year tax exemption, 
expiring January 31, 2002 on 90% of the subsidiary's income as determined 
under United States Federal income tax laws. The impact of this benefit on 
the Company's earnings per share was $0.08 and $0.06 for the three months 
ended December 31, 1997 and December 31, 1996, respectively.

                                       8
<PAGE>

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

     The Company produces citrus-based brandy, distilled spirits, rum and 
fortified wine used as ingredients by producers of beverage alcohol; bottles 
coolers, prepared cocktails and other beverages on a contract basis; and 
produces a complete line of spirits. The Company also imports and markets 
beverage alcohol and produces vinegar, cooking wine and other alcohol-related 
products.

     Prior to March 31, 1997, the Company classified its sales of bulk 
alcohol products and case goods spirits as beverage ingredients and popular 
price spirits, respectively. The Company feels that the new terms for these 
lines of business are more meaningful to an understanding of the nature of 
its products.

     BULK ALCOHOL PRODUCTS.  The Company distills citrus brandy, citrus and 
cane spirits and rum, produces fortified citrus wine, and sells these 
products to over 30 producers of beverage alcohol in the United States and 
other foreign countries. The Company also sells bulk grain alcohol, primarily 
to export customers. Grain alcohol is purchased from several suppliers 
located in the Midwest. Citrus brandy and spirits are distilled from citrus 
juice by-products purchased from manufacturers of citrus juice concentrate. 
The Company's citrus brandy is used primarily as an ingredient in flavored 
brandies. Citrus spirits are used primarily as a fortifying ingredient to 
increase the alcohol content of the Company's citrus wine and the wine of 
other manufacturers. The Company's citrus wine is fermented from citrus juice 
and fortified to increase its alcohol content to approximately 20% by volume. 
Known as fortified citrus wine, this product is used primarily as an 
ingredient in cordials, whiskies and other beverage alcohol. Rum and cane 
spirits are distilled from sugar cane molasses and are sold to other bottlers 
of rum, producers of beverage alcohol, food companies and flavor 
manufacturers. Rum is also used in the Company's spirits line.

     CASE GOODS SPIRITS.  The Company produces, bottles and sells a complete 
line of spirits under its own proprietary labels and under the private labels 
of major retailers of liquor located in the Southeast. These products 
currently include rum, gin, vodka, tequila, cordials and various whiskies, 
and the Company continues to add additional products to this line. Since the 
acquisition of the Virgin Islands operations in 1994, the Company also 
produces and sells case goods spirits in the U.S. Virgin Islands under the 
Cruzan Rum label. The Company's proprietary labels include Cruzan Estate 
Rums, Cruzan Rums, Ron Carlos Rums, Conch Republic Rums and "James's Harbor" 
(gin, rum and vodka). The Company distills its own rum, but generally 
produces its other spirits from grain alcohol purchased from third parties. 
Depending on the particular formula for a product, the Company adds flavoring 
and/or sugar, reduces the product's proof and then filters and bottles the 
finished product. In 1996, the Company began to import and market Cruzan Rum, 
Porfidio Tequila and several brands from the former Blair product line which 
was discontinued in 1995. Since 1996, management's strategy has been to focus 
on marketing and building premium brands in its case goods spirits business 
with an initial emphasis on the rum and tequila categories.

     CONTRACT BOTTLING.   The Company bottles coolers, prepared cocktails and 
other beverage alcohol on a contract basis for other producers. The Company 
also bottles non-alcohol beverage on a contract basis, including fruit 
juices, carbonated and non-carbonated fruit-flavored beverages, flavored 
sparkling water and ready-to-drink brewed iced teas.

     VINEGAR AND COOKING WINE.  To complement its distilling, winery and 
bottling operations, the Company produces vinegar and cooking wine for sale 
to condiment manufacturers, food service distributors and major retailers. 
The Company's sales to retailers are sold under its own proprietary labels 
and under the private labels of major retailers in the Southeast.

                                       9
<PAGE>

     During the quarter ended September 30, 1995, the Company discontinued 
the operations of Blair, sold substantially all of its assets, terminated its 
employees, closed its facilities and began liquidating its remaining assets. 
The Company acquired Blair in August 1994. At that time management believed 
that Blair would enhance the Company's national sales capabilities and 
provide an entry to the imported wine and spirits segment of the beverage 
alcohol market. However, beginning in January 1995, Blair incurred 
substantial operating losses. In 1995, the losses from Blair amounted to 
$10,740,124 (net of tax benefit of $935,883), including operating losses 
during the phase out period of $1,871,173. These losses resulted from, among 
other things, the failure to meet exaggerated sales and gross profit 
projections furnished to the Company, unrecorded liabilities, surplus 
inventories, and inadequate reserves for uncollectible receivables, all of 
which were uncovered subsequent to the acquisition. The Company is reserving 
all rights that it has to indemnification from the selling shareholders of 
Blair under the merger agreement relating to the acquisition.

     The Company's net sales and gross margins (gross profit as a percentage 
of net sales) vary depending on the mix of business among the Company's 
products. Historically, gross margins have been highest in bulk alcohol 
products and lower in case goods spirits, contract bottling, vinegar and 
cooking wine operations. Within its contract bottling operations, sales and 
gross margins have varied substantially based upon the mix of business from 
the Company's "Type A" and "Type B" bottling customers. Type A bottling 
customers pay the Company to purchase their raw materials and these costs are 
passed through to the customer.  Type B bottling customers supply their own 
raw materials and are only charged for bottling charges. Although gross 
profit per case for the Company's Type A and Type B bottling customers is 
approximately equal, given the same case volume, net sales and cost of goods 
sold with respect to products bottled for Type A bottling customers are 
higher, and gross margins are lower, than for Type B bottling customers. As 
a result, significant fluctuations in volume of Type A bottling customers can 
distort the Company's gross margin.

     The Company has a limited number of customers, and these customers often 
purchase bulk alcohol products in significant quantities or place significant 
orders for contract bottling services. Accordingly, the size and timing of 
purchase orders and product shipments can cause operating results to 
fluctuate significantly from quarter to quarter. Additionally, some Company 
products generate higher profit margins than others, and changes in the 
Company's product mix will cause gross margins to fluctuate. Certain aspects 
of the Company's business are also seasonal, with increased demand for the 
Company's contract bottling services from April to October and increased 
production of the Company's bulk alcohol products during the months from 
October to June, corresponding to the Florida citrus-harvest season. As a 
result of these factors, the Company's operating results vary significantly 
from quarter to quarter.

     Net sales represent the Company's gross sales less excise taxes. Excise 
taxes are generally payable on products bottled by the Company. In addition, 
excise taxes are payable on sales of industrial alcohol to certain customers. 
Accordingly, excise taxes vary from period to period depending upon the 
Company's product and customer mix.

RECENT ACCOUNTING PRONOUNCEMENTS

     In February 1997, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per 
Share" (EPS), which simplifies existing computational guidelines, revises 
disclosure requirements, and increases the comparability of earnings per 
share on an international basis. The Company adopted SFAS No. 128 in its 
first quarter of fiscal year 1998.

     In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments 
of an Enterprise and Related Information," which changes the way public 
companies report information about operating segments. SFAS No. 131, which is 
based on the management approach to segment reporting, establishes 
requirements to report selected segment information quarterly and to report 
entity-wide disclosures about products and services, major customers, and the 
material countries in which the entity holds assets and reports revenue. 
Management has not yet evaluated the effects of these changes on its 
reporting of segment information. The Company will adopt SFAS No. 131 in its 
fiscal year 1999.

                                      10
<PAGE>

YEAR 2000 COMPLIANCE

     Management has initiated a program to prepare the Company's information 
systems for the year 2000, and to upgrade its information systems generally. 
The Company is assessing the impact of the year 2000 issue on its operations, 
including the extent of the cost of programming changes required to address 
this issue. At the present time, it is not expected that the costs to prepare 
the Company's information systems for the year 2000 will have any material 
adverse impact on the Company's results of operations, liquidity or capital 
resources.

FORWARD-LOOKING STATEMENTS

     Management's Discussion and Analysis of Financial Condition and Results 
of Operations contains, among other things, information regarding revenue 
growth, expenditure levels and plans for development. These statements could 
be considered forward-looking statements that involve a number of risks and 
uncertainties. The following is a list of factors, among others, that could 
cause actual results to differ materially from the forward-looking 
statements; business conditions and growth in certain market segments and 
industries and the general economy; competitive factors including increased 
competition and price pressures; availability of third party component 
products at reasonable prices; excise taxes; foreign currency exposure; 
changes in product mix; lower than expected customer orders and quarterly 
seasonal fluctuation of those orders; and product shipment interruptions.

     Certain amounts presented in this Item 2 have generally been rounded to 
the nearest thousand and hundred thousand, as applicable, but the percentages 
calculated are based on actual amounts without rounding.

                                      11
<PAGE>

                            RESULTS OF OPERATIONS

     The following tables set forth  statement of operations items as a 
percentage of net sales and information on net sales of certain Company 
products.
<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED DECEMBER 31,
                                                   -------------------------------
                                                    1997                     1996 
                                                   ------                   ------
<S>                                               <C>                      <C>
   Net sales                                        100.0%                   100.0%
   Cost of goods sold                                71.1                     73.8
                                                   ------                   ------
   Gross margin                                      28.9                     26.2
   Selling, general and                                                                  
     administrative expenses                         20.6                     15.9
                                                   ------                   ------
   Operating income                                   8.3                     10.3
   Interest expense                                  (5.7)                    (5.6)
   Other income (expense), net                        4.0                      3.8
                                                   ------                   ------
   Income before income taxes                         6.6                      8.5
   Income tax expense                                (0.3)                    (1.8)
                                                   ------                   ------
   Net income                                         6.3%                     6.7%
                                                   ------                   ------
                                                   ------                   ------
</TABLE>
<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED DECEMBER 31,
                                                   -------------------------------
                                                    1997                     1996                 % CHANGE
                                                  --------                 --------               --------
                                                            (in thousands)                          97/96
<S>                                             <C>                      <C>                     <C>
Bulk alcohol products                            $  7,210                 $  7,913                     (8.9)
Case goods spirits                                  4,917                    5,064                     (2.9)
Contract bottling                                   1,358                    2,206                    (38.4)
Vinegar and cooking wine                            2,585                    2,231                     15.8
Other                                               1,671                    1,500                     11.4
                                                  --------                 --------                --------
                                                  $ 17,741                 $ 18,914                    (6.2)
                                                  --------                 --------                --------
                                                  --------                 --------                --------
</TABLE>
The following table provides unit sales volume data for certain Company 
products.
<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED DECEMBER 31,
                                                   -------------------------------
                                                    1997                     1996                 % CHANGE
                                                  --------                 --------                --------
                                                            (in thousands)                          97/96
<S>                                             <C>                      <C>                     <C>
Bulk alcohol products:
Distilled products, in proof gallons
  Citrus Brandy                                        403                     529                    (23.9)
  Citrus Spirits                                       172                     244                    (29.8)
  Rum                                                1,045                     991                      5.5
  Cane Spirits                                         117                     157                    (25.5)
  Grain alcohol                                      1,077                     992                      8.6
Fortified citrus wine, in gallons                    1,522                   1,646                     (7.5)
Case goods spirits, in cases                           268                     288                     (7.0)
Contract bottling, in cases                            628                     706                    (11.1)
Vinegar
  Bulk, in 100 grain gallons                         1,131                   1,017                     11.2
  Cases                                                128                     109                     17.0
  Drums, in 100 grain gallons                          166                      93                     78.1
Cooking Wine
  Bulk, in gallons                                      20                      12                     72.3
  Cases                                                 73                      70                      3.8
</TABLE>

                                      12
<PAGE>

                      RESULTS OF OPERATIONS - CONTINUED



     THREE MONTHS ENDED DECEMBER 31, 1997 VS. THREE MONTHS ENDED DECEMBER 31, 
1996. Unless otherwise noted, references to 1997 represent the three month 
period ending December 31, 1997 and references to 1996 represent the three 
month period ending December 31, 1996.

     NET SALES. Net sales were $17.7 million in 1997, a decrease of 6.2% from 
net sales of $18.9 million in 1996.

     Net sales of bulk alcohol products were $7.2 million in 1997, a decrease 
of 8.9% from net sales of $7.9 million in 1996. Bulk alcohol products 
produced by the Company include citrus brandy, citrus and cane spirits, rum 
and fortified citrus wine. The Company also buys grain alcohol which it 
resells, primarily to export customers. Unit sales of citrus brandy decreased 
23.9% in 1997, primarily due to the timing of customer orders. The Company's 
citrus brandy is used primarily as an ingredient in flavored brandies. Unit 
sales of citrus brandy have also declined as a result of a decline in demand 
of brandy products which management believes is due to changing demographics. 
Management expects this trend to continue in the future. Unit sales of citrus 
spirits decreased 29.8% in 1997. Citrus spirits are used primarily as a 
fortifying ingredient to increase the alcohol content of citrus wine.  Unit 
sales of cane spirits decreased 25.5% in 1997. Cane spirits are sold to 
flavor manufacturers. The decrease in sales of citrus and cane spirits in 
1997 was primarily due to the timing of customer orders. Unit sales of rum 
increased 5.5% in 1997. Unit sales of grain alcohol increased 8.6% in  1997. 
Grain alcohol is purchased from several suppliers located in the Midwest and 
resold primarily to export customers, the largest of which are in Eastern 
Europe and Russia. Unit sales of fortified citrus wine decreased 7.5% in 
1997. Fortified citrus wine is used as an ingredient in cordials, whiskies 
and other beverage alcohol. Shipments of fortified citrus wine decreased in 
1997 due to weak demand for certain products of one of the Company's largest 
wine customers as well as increased competition from other wine manufacturers.

     Net sales of case goods spirits were $4.9 million in 1997, a decrease of 
2.9% from net sales of $5.1 million in 1996. Beginning in fiscal 1996, 
management's strategy has been to focus on marketing and building premium 
brands in its case goods spirits business with an initial emphasis on the rum 
and tequila categories. However, the Company experienced a volume decrease in 
unit sales of case goods spirits of 7.0% in 1997.  The volume decrease in 
case goods spirits is attributable to the value-priced and private label 
component of this category which declined due to increased competition from 
other low cost bottlers. The decrease in volume of value-priced and private 
label business was partially offset by an increase in the Company's premium 
Cruzan Rum business.  

     Net sales of contract bottling services were $1.4 million in 1997, a 
decrease of 38.4% from net sales of $2.2 million in 1996. The Company's 
contract bottling volume decreased 11.1% in 1997. The decrease in volume is 
primarily attributable to a decrease in business with one of the Company's 
largest Type A bottling customers. The decrease in contract bottling volume 
with this customer was partially offset by increased volume with existing 
customers.

     Net sales of vinegar and cooking wine were $2.6 million in 1997, an 
increase of 15.8% from net sales of $2.2 million in 1996. The increase in net 
sales of vinegar and cooking wine was due to increased manufacturing 
efficiencies, which allowed the Company to increase sales to existing and new 
customers, and an improved product mix.

     GROSS PROFIT.  Gross profit was $5.1 million in 1997, an increase of 
3.4% from gross profit of $5.0 million in 1996. Gross margin increased to 
28.9% in 1997 from 26.2% in 1996. The improvement in gross margin is 
primarily attributable to increased gross margins of the Company's bulk rum 
products in the Virgin Islands, reduced raw material costs in the Company's 
domestic distilling operations  and a decrease in contract bottling volume 
with a large Type A bottling customer.

                                      13
<PAGE>

                          RESULTS OF OPERATIONS - CONTINUED



     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses were $3.7 million in 1997, an increase of 22.1% from 
$3.0 million in 1996. Selling, general  and administrative expenses were 
20.6% of net sales in 1997 and 15.9% in 1996. The increase in selling, 
general and administrative expenses in 1997 is primarily attributable to the 
Company's increased emphasis on marketing its premium brands and imported 
products and legal fees relating to the lawsuit against the former Blair 
stockholders.

     INTEREST EXPENSE.  Interest expense was $1.0 million in 1997 and $1.1 
million in 1996. The decrease in interest expense was due to lower levels of 
debt outstanding during 1997.

     OTHER INCOME.  Included in other income is rental income from the 
Bahamian subsidiary and a gain of $.4 million in 1997 and $.3 million in 1996 
relating to insured hurricane damage.

     INCOME TAX EXPENSE.  The Company's effective income tax rate was 4% in 
1997 and 21% 1996. The low tax rate is attributable to the Virgin Islands 
operations which has a 90% exemption from income taxes. Also, the Company 
recently amended its 1994 and 1995 federal income tax returns which has 
resulted in loss carryforwards available in the current year and a request 
for refund of income tax previously paid.

                           LIQUIDITY AND CAPITAL RESOURCES

     During the three months ended December 31, 1997, the Company increased 
production and inventory of its citrus brandy and citrus spirits products due 
to the availability of citrus molasses. Citrus molasses is the primary raw 
material the Company uses in its citrus brandy and spirits products at its 
two Florida distilleries. The Company buys citrus molasses, a by-product of 
citrus juice production, from local manufacturers of citrus juice and 
concentrate during the citrus harvest season, which generally runs from 
October to June.

     The Company's inventory of citrus wine increased slightly although sales 
of citrus wine decreased. Inventory of the Company's cooking wine increased 
along with sales.

     The Company's inventory of case goods increased during the quarter for 
two reasons:  The Company imported an approximately three month supply of 
premium and super-premium tequila; and the Company replenished inventory 
levels depleted as of September 30, 1997 to normal operating levels.  

     The Company's inventory of vinegar increased due to increased capacity 
and sales.

     The Company's overall net sales decreased during the quarter ended 
December 31, 1997, compared to the quarter ended September 30, 1997. The 
overall sales decrease led to a decrease in trade receivables and also 
contributed to inventory increases in some divisions.

     The Company uses its line of credit (described below) to fund its U.S. 
manufacturing, importing and marketing operations. The amount drawn on the 
line of credit was $5,913,599 as of December 31, 1997, and $4,246,947 as of 
September 30, 1997. The increase in the line of credit relates to the 
Company's increased level of production during the citrus harvest season, 
increased imports of tequila, payment of accrued interest and the payment of 
current maturities of long-term debt. The line of credit was reduced during 
the quarter with repatriated previously taxed funds from the Bahamian 
subsidiary.

                                      14
<PAGE>

                     LIQUIDITY AND CAPITAL RESOURCES - CONTINUED

     At September 30, 1997, the Company had an unsecured bank line of credit 
of $20,000,000, which expires November 1, 1999. The first $5 million of 
borrowings bear interest at 1.5% above the one-month LIBOR rate, borrowings 
in excess of $5 million bear interest at the prime rate. The amount which can 
be borrowed on the line is based on the borrowing base, as defined in the 
agreement. The agreement requires the Company to maintain a tangible net 
worth, as defined, a maximum leverage ratio and a minimum fixed charge, 
interest coverage and current ratio. In addition, the agreement prohibits the 
payment of cash dividends. The Company was in compliance with these covenants 
at December 31, 1997.
                                           
     The Company's total debt was $46.3 million as of December 31, 1997, and 
its ratio of debt to equity was 1.2 to 1.

     During the quarter the Company purchased $586,853 of property and 
equipment. The Company has no material commitments for capital expenditures.

     The Company has operated in the Bahamas since 1964. Under Bahamian law, 
the Company pays no taxes on the profits from these operations, and such 
profits have generally been retained in the Bahamas. In addition, the Company 
has generally not paid United States federal income taxes on such profits. 
Repatriation of these profits could result in a significant United States 
federal income tax liability to the Company. 

     Based on current plans and business conditions, management expects that 
its cash and cash equivalents, together with any amounts generated from 
operations and available borrowings, will be sufficient to meet the Company's 
cash requirements for at least the next 12 months.

                                      15
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is party to various legal proceedings as reported in the 
Company's Annual Report on Form 10-K for the year ended September 30, 1997. 
There have been no material developments during the quarter ended December 
31, 1997, other than those previously reported.

Item 6. Exhibits and Reports on Form 8-K

    (a)  Exhibit Index
          
     2.1   Subscription Agreement dated as of January 5, 1994 between 
           Todhunter International, Inc. and Virgin Islands Rum Industries, 
           Ltd. (2)
     2.2   Stock Purchase Agreement dated as of January 5, 1994 between 
           Virgin Islands Rum Industries, Ltd. and VI Acquisition Partnership 
           (2)
     2.3   Agreement and Plan of Merger dated as of April 22, 1994 by and 
           among Todhunter International, Inc., Todhunter Acquisition, Inc., 
           Blair Importers, Ltd. and the Stockholders of Blair Importers, 
           Ltd. (3)
     2.4   Agreement dated August 31, 1994 between Todhunter-Mitchell and 
           Company Limited and Todhunter-Mitchell Distilleries Limited. (4)
     2.5   Agreement of Purchase and Sale of Assets dated September 21, 1995 
           between Todhunter International, Inc. and David Sherman 
           Corporation (11)
     3.1   Amended and Restated Certificate of Incorporation of Todhunter 
           International, Inc. (1)
     3.2   Amended and Restated By-Laws of Todhunter International, Inc. (17)
     4.1   Form of Todhunter International, Inc. Common Stock Certificate (1)
    10.1   Amended and Restated Loan Agreement, dated as of November 22, 
           1991, among Todhunter International, Inc., First Union Commercial 
           Corporation, First Union National Bank of Florida and Sun 
           Bank/South Florida, National Association (1)
  10.1(a)  Second Amended and Restated Loan Agreement between Todhunter 
           International, Inc. and First Union National Bank of Florida dated 
           as of October 13, 1993 (5)
  10.1(b)  First Amendment to Second Amended and Restated Loan Agreement 
           dated as of January 31, 1994, among Todhunter International, Inc., 
           A. Kenneth Pincourt, Jr. and First Union National Bank of Florida 
           (6)
  10.1(c)  Second Amendment to Second Amended and Restated Loan Agreement 
           dated as of August 4, 1994, among Todhunter International, Inc., 
           A. Kenneth Pincourt, Jr. and First Union Bank of Florida (7)
  10.1(d)  Third Amendment to Second Amended and Restated Loan Agreement 
           dated as of September 26, 1994, among Todhunter International, 
           Inc., A. Kenneth Pincourt, Jr. and First Union Bank of Florida (8)
    10.2   Bulk Malt Purchase Agreement, dated as of September 25, 1991, 
           between Todhunter International, Inc. and Joseph E. Seagram & 
           Sons, Inc. (1)
    10.3   Cooler Production Agreement dated as of October 15, 1987, between 
           Todhunter International, Inc. and Joseph E. Seagram & Sons, Inc., 
           as amended May 1, 1990 and August 27, 1991 (1)
    10.4   Agreement, dated October 1, 1990, among Todhunter International, 
           Inc., Bacardi Imports, Inc. and Castleton Beverage Corporation, as 
           amended by an Amendment dated December 12, 1991 (1)
    10.5   Letter Agreement, dated August 11, 1992, between Todhunter 
           International, Inc. and A. Kenneth Pincourt, Jr. (1)
    10.6   Todhunter International, Inc. 1992 Stock Option Plan, as amended (18)
    10.7   Todhunter International, Inc. Defined Contribution Pension Plan (1)
    10.8   Lease, dated March 24, 1988, as amended, between Todhunter 
           International, Inc. and Especially West Palm Beach, Inc. (1)
    10.9   Sublease dated June 6, 1994, between SunBank/South Florida, 
           National Association and Todhunter International, Inc. (8)
   10.10   Loan Agreement dated as of January 31, 1994, between Virgin 
           Islands Rum Industries, Ltd. and First Union National Bank of 
           Florida (8)
 10.10(a)  Modification of Loan Agreement dated as of January 5, 1996, 
           amending Loan Agreement dated January 31, 1994 (13)

                                      16
<PAGE>

   10.11   Loan Agreement dated as of August 4, 1994, among Todhunter
           International, Inc., Blair Importers, Ltd. and certain banks (8)
   10.12   Guaranteed Subordinated Note Agreement dated as of August 4, 1994, 
           among Todhunter International, Inc., Blair Importers, Ltd., 
           Charmer Industries, Inc. and certain shareholders thereof (3)
   10.13   Note Purchase Agreement dated as of October 30, 1994, among 
           Todhunter International, Inc., Blair Importers, Ltd. and certain 
           purchasers (8)
 10.13(a)  First Amendment Agreement and Waiver dated as of February 1, 1996, 
           amending Note Purchase Agreement dated as of October 30, 1994 (14)
   10.14   Loan Agreement dated as of November 22, 1994, among Todhunter 
           International, Inc., Blair Importers, Ltd. and First Union 
           National Bank of Florida (8)
 10.14(a)  Modification of Loan Agreement dated as of February 26, 1996, 
           amending Loan Agreement dated as of November 22, 1994 (14)
 10.14(b)  Modification of Loan Agreement dated as of August 19, 1996, 
           amending Loan Agreement dated as of November 22, 1994, as amended 
           (15)
 10.14(c)  Third Modification of Loan Agreement dated as of December 18, 
           1996, amending Loan Agreement dated as of November 22, 1994, as 
           amended (16)
   10.15   Note dated December 30, 1994, between Todhunter International, 
           Inc. and First Union National Bank of Florida (9)
   10.16   Note dated April 28, 1995, between Todhunter International, Inc. 
           and First Union National Bank of Florida (10)
   10.17   Amended and Restated Employment Agreement dated as of July 31, 
           1995, between Todhunter International, Inc. and Jay S. Maltby (12)
    11.1   Statement of Computation of Per Share Earnings (19)
    21.1   Subsidiaries of Todhunter International, Inc. (12)
    23.1   Consent of McGladrey & Pullen, LLP (18)
    24.1   Powers of Attorney (18)
    27.1   Financial Data Schedule (20)

 (1)  Incorporated herein by reference to the Company's Registration 
      Statement on Form S-1 (File No. 33-50848). 

 (2)  Incorporated herein by reference to the Company's Current Report on 
      Form 8-K for February 4, 1994, as amended. 

 (3)  Incorporated herein by reference to the Company's Current Report on 
      Form 8-K for August 5, 1994, as amended. 

 (4)  Incorporated herein by reference to the Company's Current Report on 
      Form 8-K for August 31, 1994, as amended.

 (5)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for quarter ended December 31, 1993, as amended. 

 (6)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for quarter ended March 31, 1994, as amended. 

 (7)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for quarter ended June 30, 1994, as amended. 

 (8)  Incorporated herein by reference to the Company's Annual Report on Form 
      10-K for the year ended September 30, 1994. 

 (9)  Incorporated herein by reference to the Company Quarterly Report on
      Form 10-Q for the quarter ended December 31, 1995. 

(10)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for the quarter ended June 30, 1995. 

                                      17
<PAGE>

(11)  Incorporated herein by reference to the Company's Current Report on 
      Form 8-K for September 21, 1995. 

(12)  Incorporated herein by reference to the Company's Annual Report on Form 
      10-K for the year ended September 30, 1995. 

(13)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for the quarter ended December 31, 1995. 

(14)  Incorporated herein by reference to the Company's Quarterly Report on
      Form 10-Q for the quarter ended March 31, 1996.

(15)  Incorporated herein by reference to the Company's Annual Report on Form 
      10-K for the year ended September 30, 1996.

(16)  Incorporated herein by reference to the Company's Quarterly Report on 
      Form 10-Q for the quarter ended December 31, 1996.

(17)  Incorporated herein by reference to the Company's Quarterly Report on 
      Form 10-Q for the quarter ended March 31, 1997.

(18)  Incorporated herein by reference to the Company's Annual Report on Form 
      10-K for the year ended September 30, 1997.

(19)  Filed herewith and incorporated herein by reference to Note 4 of notes 
      to consolidated financial statements, included in Item 1 of the 
      Company's Quarterly Report on Form 10-Q for the quarter ended December 
      31, 1997.

(20)  Filed herewith.

  (b) Reports on Form 8-K

      No reports on From 8-K have been filed during the quarter ended 
      December 31, 1997.

                                      18
<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.


Date: February 12, 1998                   /s/ A. Kenneth Pincourt, Jr.
                                        --------------------------------
                                          A. Kenneth Pincourt, Jr.
                                          Chairman
                                          and Chief Executive Officer


Date: February 12, 1998                   /s/ Troy Edwards
                                        --------------------------------
                                          Troy Edwards
                                          Chief Financial Officer,
                                          Treasurer and Controller

                                      19