<PAGE>    1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

                                       OR

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

  FOR THE TRANSITION PERIOD FROM _____________________ TO _____________________

                        COMMISSION FILE NUMBER 333-16453

                              SHOP VAC CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            NEW JERSEY                                           13-5609081
  (STATE OR OTHER JURISDICTION                                (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                     2323 REACH ROAD, WILLIAMSPORT, PA 17701
                                 (717) 326-0502
          (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)


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,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes [x] No [ ]

Common Shares, No Par Value,  Outstanding at September 30, 1998 -- 6,500 Class A
voting and 650,000 Class B non-voting.


<PAGE>    2
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands)

<TABLE>
<CAPTION>
========================================================================================================
Assets                                                         December 31, 1997     September 30, 1998
                                                                                        (Unaudited)
--------------------------------------------------------------------------------------------------------
<S>                                                            <C>                   <C>     
Current assets:
   Cash and cash equivalents ...............................         $ 34,450            $ 34,011
   Receivables, less allowance for doubtful
      accounts of $1,946 in 1997 and $1,335
      in 1998 ..............................................           25,265              21,724
    Inventories (note 2) ...................................           22,508              18,108
    Prepaid expenses and other current assets ..............            2,636               1,096
    Deferred income taxes ..................................            3,502               4,412
--------------------------------------------------------------------------------------------------------
Total current assets .......................................           88,361              79,351
    Property, plant, and equipment, net ....................           35,603              28,462
    Deferred income taxes ..................................           15,846              12,950
    Other assets ...........................................            5,588               4,794
--------------------------------------------------------------------------------------------------------
Total assets ...............................................         $145,398            $125,557
--------------------------------------------------------------------------------------------------------
</TABLE>
























                                                                     (Continued)

                                        1

<PAGE>    3
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands)

<TABLE>
<CAPTION>
=======================================================================================================
Liabilities and Stockholders' Equity (Deficit)                 December 31, 1997    September 30, 1998
                                                                                        (Unaudited)
-------------------------------------------------------------------------------------------------------
<S>                                                            <C>                  <C>      
Current liabilities:
   Current portion of long-term debt .......................         $   3,175           $      31
    Accounts payable .......................................            19,450              13,067
    Accrued expenses .......................................            17,701              10,300
-------------------------------------------------------------------------------------------------------
Total current liabilities ..................................            40,326              23,398
Long-term debt .............................................           102,492             100,016
Other liabilities ..........................................            13,652              13,332

Stockholders' equity (deficit):
    Common stock, Class A voting, no par,
       20,000 shares  authorized,  6,500 shares
       issued.  Class B non-voting,  no par,
       1,000,000 shares authorized, 650,000
       shares issued .......................................                85                  85
    Paid in capital ........................................               110                 110
    Accumulated deficit ....................................           (13,649)            (10,586)
    Other comprehensive income - foreign currency
       translation adjustment ..............................             2,382                (798)
-------------------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) .......................         $ (11,072)          $ (11,189)
-------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficit) .......         $ 145,398           $ 125,557
=======================================================================================================
</TABLE>

See accompanying notes to condensed consolidated financial statements.

















                                                                     (Continued)

                                        2

<PAGE>    4
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(dollars in thousands)

<TABLE>
<CAPTION>
============================================================================================================================
                                                                Three months ended                    Nine months ended
                                                                  September 30,                         September 30,
----------------------------------------------------------------------------------------------------------------------------
                                                             1997               1998               1997               1998
----------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>                <C>                <C>     
Net sales.........................................        $ 52,217           $ 40,916           $151,882           $137,477

Cost of sales.....................................          38,274             27,599            110,466             95,010
----------------------------------------------------------------------------------------------------------------------------
Gross profit......................................          13,943             13,317             41,416             42,467
Selling, general and administrative expense.......           9,835              8,200             27,506             28,210
Loss on sale of European operations...............           -----              -----              -----              1,540
----------------------------------------------------------------------------------------------------------------------------
Income from operations............................           4,108              5,117             13,910             12,717

Interest expense, net.............................           2,782              2,419              8,600              7,632
Other expense (income), net.......................              35               (122)               (30)               (99)
----------------------------------------------------------------------------------------------------------------------------
Income before income taxes........................           1,291              2,820              5,340              5,184

Income tax expense (benefit)......................         (22,120)             1,131            (21,968)             2,121
----------------------------------------------------------------------------------------------------------------------------
Net income .......................................      $   23,411           $  1,689         $   27,308          $   3,063
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to condensed consolidated financial statements.



















                                                                     (Continued)

                                        3

<PAGE>    5
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

<TABLE>
<CAPTION>
===================================================================================================
                                                                            Nine months ended
                                                                               September 30,
---------------------------------------------------------------------------------------------------
                                                                          1997              1998
---------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>     
Cash flows from operating activities:
    Net income ..................................................      $ 27,308          $  3,063
    Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation and amortization ...........................         4,230             3,914
        Amortization included in interest expense ...............           437               437
        Retirement of fixed assets ..............................          --                 265
        Loss on sale of assets ..................................          --               1,540
        Changes in assets and liabilities:
           Receivables ..........................................          (986)           (3,599)
           Inventories ..........................................        (5,733)           (3,489)
           Prepaid expenses and other current assets ............          (273)             (165)
           Other assets .........................................           (98)               53
           Deferred income taxes ................................       (22,369)            1,257
           Accounts payable and accrued expenses ................         3,176            (3,144)
           Accrued restructuring charges ........................        (1,021)              (46)
           Other liabilities ....................................         1,625               620
---------------------------------------------------------------------------------------------------
Net cash provided by continuing operations ......................         6,296               706
Net cash provided (used) by discontinued operations .............         1,310              (944)
---------------------------------------------------------------------------------------------------
Net cash provided by operating activities .......................         7,606              (238)
---------------------------------------------------------------------------------------------------
Cash flows from investing activities:
        Net proceeds from sale of assets ........................          --               6,718
        Capital expenditures ....................................        (3,156)           (3,120)
---------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities ................        (3,156)            3,598
---------------------------------------------------------------------------------------------------
Cash flows from financing activities:
    Long-term debt and capital lease payments ...................        (2,192)           (3,805)
---------------------------------------------------------------------------------------------------
Net cash used by financing activities ...........................        (2,192)           (3,805)
---------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash .........................          (474)                6
---------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents .......................         1,784              (439)
Cash and cash equivalents, beginning of year ....................        21,141            34,450
---------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of quarter .......................        22,925            34,011
---------------------------------------------------------------------------------------------------
Supplemental cash flow information:
    Cash paid for interest ......................................        10,106            10,220
    Cash paid for income taxes ..................................           694               664
===================================================================================================
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                        4

<PAGE>    6
SHOP VAC CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(dollars in thousands)

(1)     The accompanying  interim  unaudited  condensed  consolidated  financial
        statements  include the accounts of Shop Vac  Corporation and its wholly
        owned  subsidiaries  (the  "Company").  All  intercompany  accounts  and
        transactions are eliminated in consolidation.

        These  condensed  financial  statements have been prepared in accordance
        with generally  accepted  accounting  principles  for interim  financial
        information  and with the  instructions  to Form 10-Q and  Article 10 of
        Regulation S-X. Accordingly,  they do not include all of the information
        and footnotes required by generally accepted  accounting  principles for
        complete  financial  statements.  In the  opinion  of  management,  such
        interim  statements  reflect  all  adjustments   (consisting  of  normal
        recurring  accruals)  necessary to present fairly the financial position
        and the results of  operations  and cash flows for the  interim  periods
        presented.  The results of  operations  for the interim  periods are not
        necessarily  indicative of the results to be expected for the full year.
        These  financial  statements  should  be read in  conjunction  with  the
        audited consolidated  financial statements and footnotes included in the
        Company's  Annual  Report on Form 10-K dated March 30, 1998 for the year
        ended December 31, 1997.

(2)     Inventories are classified as follows:

<TABLE>
<CAPTION>
=========================================================================================
                                                 December 31, 1997   September 30, 1998
                                                                         (Unaudited)
----------------------------------------------------------------------------------------
<S>                                              <C>                 <C>    
Raw materials ...............................         $ 8,518             $ 7,267
Work-in-process .............................           4,821               6,134
Finished goods ..............................           9,169               4,707
----------------------------------------------------------------------------------------
                                                      $22,508             $18,108
========================================================================================
</TABLE>

(3)  The Company will be required to adopt  Statement  of  Financial  Accounting
     Standards  No. 130  "Reporting  Comprehensive  Income"  for its 1998 annual
     financial statements.  Comprehensive income for the periods ended September
     30, 1997 and 1998 are presented below:

<TABLE>
<CAPTION>
=============================================================================================================
                                                          Three months ended            Nine months ended
                                                             September 30,                 September 30,
-------------------------------------------------------------------------------------------------------------
                                                         1997           1998           1997           1998
-------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>            <C>     
Net income .......................................    $ 23,411       $  1,689       $ 27,308       $  3,063

Other comprehensive income (loss):
   Foreign currency translation adjustment .......        (588)          (280)        (1,907)          (550)
Less: reclassification adjustment for gain
   included in net income resulting from the
   sale of the European operations ...............          --             --             --         (2,630)
-------------------------------------------------------------------------------------------------------------
Comprehensive income (loss) ......................    $ 22,823       $  1,409       $ 25,401       $   (117)
=============================================================================================================
</TABLE>




                                        5

<PAGE>    7
SHOP VAC CORPORATION AND SUBSIDIARIES

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

RESULTS OF OPERATIONS

Net sales in the third quarter were $40.9  million,  a decrease of $11.3 million
or 21.6%  compared  to the third  quarter  of 1997.  Net sales  were down  $14.0
million in the third quarter due to the  disposition  of the Company's  European
operations in the second  quarter of 1998. Net sales of the North American Group
were $2.7 million  higher in the third  quarter  compared to 1997.  New products
introduced in the fall of 1997, increased  advertising,  and generally favorable
business conditions all had a positive impact on North American revenues.

Net sales in the first nine  months  were  $137.5  million,  a decrease of $14.4
million  or 9.5%  compared  to the first nine  months of 1997.  Net sales of the
European  Group were $30.5 million lower in the first nine months  primarily due
to the disposition of the Company's European operations in the second quarter of
1998 and a large  promotional order in the first half of last year. Net sales of
the North  American  Group were $16.1 million higher in the first nine months of
1998 compared to 1997.

Gross profit in the quarter  totaled  $13.3  million,  a decrease of $600,000 or
4.5% compared to the third quarter of 1997.  Gross profit  declined $2.6 million
due to the reduced  European  Group sales,  partially  offset by improved  North
American  gross profits of $2.0  million.  Gross profit in the first nine months
totaled $42.5  million,  an increase of $1.1 million or 2.5% over the first nine
months of 1997.  The  improvement  in the first  nine  months  was due to a more
favorable  product  mix,  continued  cost  improvements  and  the  sales  volume
increases in the North American Group,  partially offset by reduced gross profit
from the European Group of $6.5 million.

Selling, general and administrative ("SG&A") expense in the quarter totaled $8.2
million,  a decrease of $1.6 million or 16.6%  compared to the third  quarter of
1997. SG&A expenses in the first nine months totaled $28.2 million,  an increase
of  $700,000  or 2.6% over the first  nine  months  of 1997.  Increases  in SG&A
expenses  in the  quarter  and the  first  nine  months  were  primarily  due to
increased  advertising and sales promotional  expenditures,  partially offset by
reduced European operating expenses.

Income from  operations  in the quarter  was $5.1  million,  an increase of $1.0
million  or 24.6%  compared  to the third  quarter  of 1997.  This  increase  is
primarily attributable to the improvements in the North American operations.

The Company  incurred a loss this year of $1,540,000 on the sale of its European
operations and other assets computed as follows:

<TABLE>
<CAPTION>
=============================================================================
(Amounts in thousands)
-----------------------------------------------------------------------------
<S>                                                                 <C>      
Cash proceeds (net of expenses)..............................       $   7,575
Less net assets sold and fees incurred.......................           9,115
-----------------------------------------------------------------------------
Loss on sale                                                        $   1,540
=============================================================================
</TABLE>

Income  from  operations  in the first nine  months  totaled  $12.7  million,  a
decrease of $1.2 million or 8.6% compared to the first nine months of 1997. This
decrease is primarily  attributable to the European  operations  where operating
income was $3.0 million  lower in the first nine months than the same period for
the  prior  year as well as the loss on sale of the  European  operations.  This
decline in European operating income was due to the significant decline in sales
compared to the prior year.  These  decreases were partially  offset by improved
North American operating income.


                                        6

<PAGE>    8
Net interest expense was $2.4 million in the quarter,  a decrease of $400,000 or
13.0% compared to the third quarter of 1997.  Net interest  expense in the first
nine months was $7.6  million,  a decrease of $1.0 million or 11.3%  compared to
the first nine months of 1997. The lower net interest expense was due to reduced
borrowings and increased interest income on higher cash investments.

Income  tax  expense  for the  quarter  increased  approximately  $23.3  million
compared  to the third  quarter of 1997 and year to date  income tax expense was
approximately  $24.1 million  higher than the comparable  prior year period.  In
1997 tax expense was  significantly  reduced  because the Company  recognized an
income tax benefit of $22.1 million  resulting  from a reduction of a previously
recorded  valuation  allowance  which had reduced the value of the Company's net
deferred  tax assets to zero.  In 1998 tax expense has returned to a more normal
relationship to pre-tax income.

LIQUIDITY AND CAPITAL RESOURCES

The  consolidated  balance sheet as of September 1998 reflects the reductions in
assets and liabilities that were transferred with the European  operations.  The
accompanying condensed consolidated statement of cash flows excludes the changes
in assets and  liabilities  that were  transferred.  The  following  comments on
liquidity  are based on  operating  performance  and do not  include  changes in
balance sheet line items resulting from the sale of the European operations.

During the nine months ended September 30, 1998, cash equivalents  declined from
$34.5 million to $34.0 million due to cash used for capital expenditures of $3.1
million,  debt reduction of $3.8 million,  European cash transferred to buyer as
part of the sale of  $900,000  and cash used  through  operations  of  $200,000,
partially  offset by cash  received on the sale of the European  operations  and
other assets of $7.6 million. Debt reduction primarily resulted from the payment
of capital leases with cash received from the sale of the European operations.

At September  30, 1998 accounts  receivable  increased by $3.6 million over 1997
year end balances due to September  sales which were  substantially  higher than
previous  months,  consistent  with  historical  seasonal  patterns of the North
American  business.  North American  inventories at year end 1997 were unusually
low due to unexpectedly heavy demand in December.  Inventories  increased during
the first nine months of 1998,  returning to more seasonal  levels and consuming
cash of $3.5  million.  Accounts  payable and  accrued  expenses  consumed  $3.1
million  during  the first nine  months of 1998 due to  reductions  in  European
accounts  payable  prior to the sale and the payment of North  American  accrued
expenses. Other operating activities generated cash of $10.0 million.

The  Company  believes  that  it  will  be able  to  satisfy  its  debt  service
requirements and its working capital and capital  expenditure  requirements from
operating cash flows.

YEAR 2000 STATUS

The  Company is in the  process of  changing  computer  hardware  platforms  and
application  software for its business management systems.  The new software has
been  installed and tested to be century  compliant.  The  conversion to the new
system is expected to be completed during the second quarter of 1999.

The Company is also in the process of reviewing  its systems other than business
management  systems to identify  and assess  operational  issues that may result
from date sensitive equipment.

The Company is early in the process of contacting its significant  suppliers and
larger  customers to determine  the extent to which the Company is vulnerable to
third party compliance with Year 2000 issues.

Through the third quarter of 1998 the Company has spent  approximately  $200,000
to address the Year 2000 issues. The Company believes that the total cost of its
Year 2000 identification,  assessment,  remediation and testing efforts will not
exceed $500,000 which will be funded from operating cash flows.

A contingency  plan has not been developed for dealing with the most  reasonably
likely worst case scenario.


                                        7

<PAGE>    9
FORWARD-LOOKING INFORMATION  -- RISK FACTORS

To the extent the Registrant has made "forward-looking statements," certain risk
factors could cause results to differ  materially from those anticipated in such
forward-looking statements.  Competition from new entrants in the wet/dry vacuum
market or the loss of significant customers could adversely effect the Company's
share of the  wet/dry  vacuum  market.  Increases  in raw  material  costs could
adversely impact the future  profitability of the Company. The Company's ability
to  successfully  address Year 2000 issues could also  adversely  impact  future
profits. Overall anticipated performance of the Company could be affected by any
serious economic downturns.

NEW ACCOUNTING STANDARDS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities".  This statement  establishes  accounting and reporting
standards for derivative  instruments and hedging activities.  This statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
The Company is currently evaluating the impact of this statement.














                                       8

<PAGE>    10
                           PART II - OTHER INFORMATION


Items 1 - 5.  NOT APPLICABLE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.   Exhibits

27.1    Financial Data Schedule

B.  Reports on Form 8-K

A report on Form 8-K was filed on October 7, 1998  reporting the sale by Matthew
Miller and his family of certain of the  Registrant's  common  stock to Jonathan
Miller and his family.

                                   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.


                              SHOP VAC CORPORATION



                                   By      /s/ David A. Grill
                                     ------------------------------
                                              David A. Grill
                                            Vice President and
                                          Chief Financial Officer

Date:     November 13, 1998

                                        9