UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

For the quarterly period ended September 30, 1996

                                       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 0-19835
                                DAY RUNNER, INC.
             (Exact name of registrant as specified in its charter)

   Delaware                                                    95-3624280
(State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                        Identification Number)

                               15295 Alton Parkway
                            Irvine, California 92618
              (Address and zip code of principal executive offices)

                                 (714) 680-3500
              (Registrant's telephone number, including area code)

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

                                  Yes |X| No|_|

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

        Class                 Number of Shares Outstanding at November 8, 1996
---------------------         -----------------------------------------------
Common Stock,                                      6,329,771
$0.001 par value                                        



<PAGE>
<TABLE>
<CAPTION>


                                DAY RUNNER, INC.

                                      INDEX


                                                                                                            Page Reference
<S>                                                                                                         <C>   

COVER PAGE.......................................................................................             1

INDEX    ........................................................................................             2

PART I -- FINANCIAL INFORMATION

         Item 1.     Consolidated Financial Statements

                     Consolidated Balance Sheets
                       September 30, 1996 and June 30, 1996......................................             3

                     Consolidated Statements of Income
                       Three Months Ended September 30, 1996 and 1995............................             4

                     Consolidated Statements of Cash Flows
                       Three Months Ended September 30, 1996 and 1995............................             5

                     Notes to Consolidated Financial Statements..................................             6

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

PART II -- OTHER INFORMATION

         Item 6.     Exhibits and Reports on Form 8-K............................................            13

SIGNATURES.......................................................................................            14
</TABLE>


<PAGE>


PART I -- FINANCIAL INFORMATION
Item 1.  Consolidated Financial Statements. 
<TABLE>
<CAPTION>

                        DAY RUNNER, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                     ASSETS
                                                                                         September 30,     June 30,
                                                                                            1996            1996
                                                                                        -------------     ---------
                                                                                          (unaudited)      (audited)
<S>                                                                                     <C>              <C>  
Current assets:
     Cash and cash equivalents.......................................................    $  27,462        $  19,765
     Accounts receivable (less allowances for doubtful accounts and sales returns
          and other allowances of $7,632 and $7,374 at September 30, 1996 and
          June 30, 1996, respectively)...............................................       22,517           21,441
     Inventories.....................................................................       17,797           20,040
     Prepaid expenses and other current assets.......................................        1,519            1,710
     Income taxes receivable.........................................................                         1,930
     Deferred income taxes...........................................................        5,200            5,200
                                                                                         ---------        ---------
          Total current assets.......................................................       74,495           70,086
                                                                                         ---------        ---------

Property and equipment -- At cost:
     Machinery and equipment.........................................................        7,891            6,942
     Data processing equipment and software..........................................        4,966            4,707
     Leasehold improvements..........................................................        1,528            1,514
     Vehicles........................................................................          202              202
                                                                                         ---------        ---------
          Total......................................................................       14,587           13,365
     Less accumulated depreciation and amortization..................................        6,550            5,864
                                                                                         ---------        ---------
     Property and equipment -- net...................................................        8,037            7,501
                                                                                         ---------        ---------
Other assets.........................................................................          340              344
                                                                                         ---------        ---------
Total assets.........................................................................    $  82,872        $  77,931
                                                                                         =========        =========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable................................................................    $   7,411        $   8,063
     Accrued expenses................................................................       11,236           10,370
     Income taxes payable............................................................          654
                                                                                         ---------        ---------
          Total current liabilities..................................................       19,301           18,433
                                                                                         ---------        ---------
Stockholders' equity:
     Preferred stock (1,000,000 shares authorized, $0.001 par value; no shares issued
        or outstanding)..............................................................
     Common stock (14,000,000 shares authorized, $0.001 par value; 6,329,771 and
           6,304,771 issued and outstanding at September 30, 1996 and
           June 30, 1996, respectively)..............................................            6                6
     Additional paid-in capital......................................................       23,088           22,869
     Retained earnings...............................................................       40,468           36,620
     Cumulative translation adjustment...............................................            9                3
                                                                                         ---------        ---------
          Total stockholders' equity.................................................       63,571           59,498
                                                                                         ---------        ---------
Total liabilities and stockholders' equity...........................................    $  82,872        $  77,931
                                                                                         =========        =========

     See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                        DAY RUNNER, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                    (In thousands, except per share amounts)


                                                                                           Three Months Ended
                                                                                               September 30,
                                                                                            1996         1995
                                                                                          --------     -------
<S>                                                                                     <C>           <C>   
Sales................................................................................... $  33,549    $ 32,806
Cost of goods sold......................................................................    16,092      16,351
                                                                                         ---------   ---------
Gross profit............................................................................    17,457      16,455
                                                                                         ---------   ---------

Operating expenses:
     Selling, marketing and distribution................................................     7,860       7,471
     General and administrative.........................................................     3,394       3,519
                                                                                         ---------   ---------
         Total operating expenses.......................................................    11,254      10,990
                                                                                         ---------   ---------

Income from operations..................................................................     6,203       5,465
Net interest income.....................................................................       210          54
                                                                                         ---------   ---------

Income before provision for income taxes................................................     6,413       5,519
Provision for income taxes..............................................................     2,565       2,346
                                                                                         ---------   ---------
Net income.............................................................................. $   3,848   $   3,173
                                                                                         =========   =========


Earnings per common and common equivalent share......................................... $    0.57    $   0.49
                                                                                         =========    ========

Weighted average number of common and common equivalent shares..........................     6,710       6,445
                                                                                         =========   =========




     See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                        DAY RUNNER, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)



                                                                                           Three Months Ended
                                                                                               September 30,
                                                                                            1996         1995
                                                                                            ----         ----
<S>                                                                                      <C>          <C>   
Cash flows from operating activities:
    Net income....................................................................        $  3,848     $ 3,173
    Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
       Depreciation and amortization..............................................             756         630
       Provision for losses on accounts receivable................................             113         129
       Changes in operating assets and liabilities:
          Accounts receivable.....................................................          (1,187)      1,269
          Inventories.............................................................           2,202       1,196
          Prepaid expenses and other current assets...............................             193         137
          Income taxes receivable.................................................           1,930
          Accounts payable........................................................            (601)     (2,079)
          Accrued expenses........................................................             864       1,930
          Income taxes payable....................................................             654        (264)
                                                                                         ---------   ---------
              Net cash provided by operating activities...........................           8,772       6,121
                                                                                         ---------   ---------
Cash flows from investing activities:
    Acquisition of property and equipment.........................................          (1,291)       (683)
    Other assets..................................................................               5          (6)
                                                                                         ---------   ----------
         Net cash used in investing activities....................................          (1,286)       (689)
                                                                                         ----------  ---------
Cash flows from financing activities:
    Payment of long-term debt.....................................................                         (38)
    Payment of capital lease obligations..........................................                          (5)
    Net proceeds from issuance of common stock....................................             219         586
                                                                                         ---------   ---------
         Net cash provided by financing activities................................             219         543
                                                                                         ---------   ---------
Effect of exchange rate changes on cash and cash equivalents......................              (8)         22
                                                                                         ----------  ---------
Net increase in cash and cash equivalents.........................................           7,697       5,997
Cash and cash equivalents at beginning of period..................................          19,765       4,269
                                                                                         ---------   ---------
Cash and cash equivalents at end of period........................................       $  27,462   $  10,266
                                                                                         =========   =========

     See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>



                        DAY RUNNER, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (Information relating to the three months ended
                    September 30, 1996 and 1995 is unaudited)


1.  BASIS OF PRESENTATION AND ACCOUNTING POLICIES

         The  accompanying  consolidated  balance sheet as of September 30, 1996
and the  consolidated  statements of income and statements of cash flows for the
three-month  periods ended September 30, 1996 and 1995 are unaudited but, in the
opinion of management,  include all adjustments consisting of normal,  recurring
accruals  necessary for a fair  presentation  of the financial  position and the
results  of  operations  for such  periods.  Certain  information  and  footnote
disclosures  normally  included in financial  statements  prepared in conformity
with generally accepted accounting  principles have been omitted pursuant to the
requirements  of the  Securities and Exchange  Commission,  although the Company
believes  that the  disclosures  included in the financial  statements  included
herein  are  adequate  to make  the  information  therein  not  misleading.  The
financial  statements  included  herein should be read in  conjunction  with the
Company's audited consolidated  financial statements for the year ended June 30,
1996, and the notes thereto,  which are included in the Company's  Annual Report
on Form 10-K.

         The results of operations for the three months ended September 30, 1996
and 1995 are not  necessarily  indicative  of the results  for a full year.  The
seasonality of the Company's  financial results and the  unpredictability of the
factors  affecting  such  seasonality  make the  Company's  quarterly and yearly
financial results difficult to predict and subject to significant fluctuation.

2.  INVENTORIES

         Inventories consist of the following (in thousands):

                                            September 30,           June 30,
                                                1996                  1996
                                                ----                  ----
         Raw materials...................  $    5,450             $    8,212
         Work in process.................         437                    327
         Finished goods..................      11,910                 11,501
                                           ----------             ----------
                  Total..................  $   17,797             $   20,040
                                           ==========             ==========


3.  LINE OF CREDIT

         Effective  November 1, 1996, the Company  amended its credit  agreement
with a bank.  The amended terms of the agreement  allow the Company to borrow up
to $5,000,000  under a line of credit and open  commercial  letters of credit or
open  standby  letters  of credit up to  $5,000,000  through  November  1, 1997.
However,  in no event may the  aggregate  of  borrowings  and  letters of credit
exceed  $5,000,000.  Commercial  letters of credit and standby letters of credit
shall  be  issued  for a term  not to  exceed  180 days  and  shall  not  expire
subsequent  to February 1, 1998 and May 1, 1998,  respectively.  Borrowings  are
collateralized  by accounts  receivable,  inventories  and certain other assets.
Borrowings  under the line of credit bear  interest  at either the bank's  prime
rate (8.25% at September  30,  1996) or at LIBOR  (5.43% at September  30, 1996)
plus 1.75%, at the Company's election. The credit agreement requires the Company
to maintain  total debt to  tangible  net worth of not more than 1.5 to 1 and to
maintain certain specified  operating  ratios.  The agreement also requires that
the Company obtain the bank's  approval to declare or pay dividends in excess of
$200,000.

4.  STOCKHOLDERS' EQUITY

         During the three months ended September 30, 1996, a director  exercised
warrants to purchase an aggregate of 25,000 shares of the Company's Common Stock
for an aggregate of $218,750.

5.  OTHER TRANSACTIONS

         During fiscal 1995 and calendar 1993,  the Company  entered into barter
agreements  whereby it delivered $132,000 and $1,098,000,  respectively,  of its
inventory  in  exchange  for future  advertising  credits and other  items.  The
credits,  which expire in October 1998, are valued at the lower of the Company's
cost or market  value of the  inventory  transferred.  The Company has  recorded
barter  credits  of  $36,000 in prepaid  expenses  and other  current  assets at
September  30, 1996 and at June 30,  1996.  At  September  30, 1996 and June 30,
1996, other assets include  $279,000 of such credits.  These credits are charged
to expense as they are used.  During the three months ended  September  30, 1996
and 1995,  no  amounts  were  charged to expense  for  barter  credits  used for
advertising.

         The Company assesses the recoverability of barter credits periodically.
Factors considered in evaluating the recoverability  include  management's plans
with respect to advertising and other  expenditures for which barter credits can
be  used.  Any  impairment   losses  are  charged  to  operations  as  they  are
determinable.  During the three months  ended  September  30, 1995,  the Company
charged  $220,000 to  operations  for such  impairment  losses.  No amounts were
charged to  operations  during the  quarter  ended  September  30, 1996 for such
impairment losses.

6.  EARNINGS PER SHARE

         Earnings per share  information is computed using the weighted  average
number of shares of Common  Stock  outstanding  and dilutive  common  equivalent
shares from stock options and warrants. For the three months ended September 30,
1995,  the Company  used the treasury  stock  method of  computing  earnings per
share.  For the three months  ended  September  30,  1996,  the Company used the
modified treasury stock method of computing  earnings per share. Under generally
accepted accounting principles,  there is a computational difference between the
treasury  stock method and the modified  treasury stock method which is based on
the number of shares  obtainable  upon exercise of options and warrants.  If the
number of shares  obtainable  upon exercise of outstanding  options and warrants
exceeds 20% of the number of common shares outstanding at the end of the period,
the  modified  treasury  stock  method is used.  Since  the  number of shares so
obtainable  exceeded the 20% threshold for the three months ended  September 30,
1996,  the  Company  used the  modified  treasury  stock  method in  calculating
earnings per share for that period.


<PAGE>



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

         The following  discussion  should be read in  conjunction  with, and is
qualified in its entirety by, the  Consolidated  Financial  Statements and Notes
thereto  included  elsewhere in this Quarterly  Report.  Historical  results and
percentage   relationships  among  any  amounts  included  in  the  Consolidated
Financial  Statements  are not  necessarily  indicative  of trends in  operating
results for any future period.

OVERVIEW
         
     Since the Company's  introduction of the first Day Runner System  organizer
in 1982,  the  Company's  revenues have been  generated by increased  unit sales
primarily of organizers and planners and secondarily of refills. Sales increases
have resulted from higher sales of existing  products,  new products and product
line  extensions.  The  Company  focuses  the  great  majority  of  its  product
development,  sales and marketing efforts on the office products channel,  which
accounted  for 53.0% of first  quarter  fiscal 1997  sales,  and the mass market
channel, which accounted for 37.2% of first quarter fiscal 1997 sales.
Results of Operations

         The  following  table  sets  forth,  for  the  periods  indicated,  the
percentages  that  selected  income  statement  items  bear  to  sales  and  the
percentage change in the dollar amounts of such items.
<TABLE>
<CAPTION>

                                                                                                       Percentage
                                                                               Percentage                Change
                                                                                of Sales                  Three
                                                                                  Three                Months Ended
                                                                               Months Ended            September 30,
                                                                              September 30,               1995                
                                                                           1996            1995          to 1996
                                                                          ------        ----------     ------------
<S>                                                                       <C>            <C>             <C>    
Sales..................................................................   100.0%          100.0%           2.3%
Cost of goods sold.....................................................    48.0            49.8           (1.6)
                                                                          -----           -----
Gross profit...........................................................    52.0            50.2            6.1
                                                                          -----           -----
Operating expenses:
    Selling, marketing and distribution................................    23.4            22.8            5.2
    General and administrative.........................................    10.1            10.7           (3.6)
                                                                          -----            ----
       Total operating expenses........................................    33.5            33.5            2.4
                                                                          -----           -----
Income from operations.................................................    18.5            16.7           13.5
Net interest income....................................................     0.6             0.1          288.9
                                                                           ----            ---- 
Income before provision for income taxes...............................    19.1            16.8           16.2
Provision for income taxes.............................................     7.6             7.1            9.3
                                                                           ----            ----
Net income.............................................................    11.5%            9.7%          21.3
                                                                           ====            ====
</TABLE>



<PAGE>


         The  following  tables  set  forth,  for  the  periods  indicated,  the
Company's  approximate sales by product category and distribution channel and as
a percentage of total sales.
<TABLE>
<CAPTION>


                                                                    Three Months Ended September 30,
Product Category:                                                1996                        1995
-----------------                                         --------------------       --------------------
                                                                    (unaudited; dollars in thousands)
<S>                                                      <C>           <C>           <C>             <C>  
Organizers and planners..............................     $ 21,061       62.8%        $  20,175       61.5%
Refills..............................................       10,444       31.1            11,900       36.3
Other................................................        2,044        6.1               731        2.2
                                                          --------       ----         ---------       ----
    Total............................................     $ 33,549      100.0%        $  32,806      100.0%
                                                          ========      =====         =========      =====

</TABLE>

<TABLE>

                                                                    Three Months Ended September 30,
Distribution Channel:                                             1996                         1995
---------------------                                      -------------------        --------------------
                                                                   (unaudited; dollars in thousands)
<S>                                                      <C>            <C>          <C>             <C>    

Office products......................................     $ 17,783        53.0%       $ 16,622         50.7%
Mass market..........................................       12,480        37.2          11,767         35.9
Foreign customers....................................        1,364         4.1           2,182          6.6
Other................................................        1,922         5.7           2,235          6.8
                                                          --------       -----       ---------        -----
    Total............................................     $33,549        100.0%      $  32,806        100.0%
                                                          ========      ======       =========        =====
</TABLE>



THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
THE THREE MONTHS ENDED SEPTEMBER 30, 1995

         SALES.  Sales consist of revenues  from gross product  shipments net of
allowances  for  returns,  rebates and credits.  In the first  quarter of fiscal
1997,  sales  increased by $743,000,  or 2.3%,  primarily due to increased  unit
sales of  miscellaneous  products  grouped together as "other." Sales of "other"
products grew by $1,313,000, or 179.6%; sales of organizers and planners grew by
$886,000,   or  4.4%;  and  sales  of  refills  (which  include   calendars  and
accessories) decreased by $1,456,000,  or 12.2%. Product sales were primarily to
the office products channel and secondarily to mass market  customers.  Sales to
office products customers grew by $1,161,000,  or 7.0%, and sales to mass market
customers  grew by  $713,000,  or 6.1%.  Higher  sales to  these  channels  were
partially  offset  by  declines  of  $818,000,  or  37.5%,  in sales to  foreign
customers,  and $313,000, or 14.0%, in sales to miscellaneous  customers grouped
together as "other."

         GROSS PROFIT.  Gross profit is sales less cost of goods sold,  which is
comprised of materials,  labor and manufacturing  overhead.  Gross profit may be
affected by, among other  things,  product mix,  production  levels,  changes in
vendor  and  customer  prices and  discounts,  sales  volume  and  growth  rate,
purchasing  and  manufacturing  efficiencies,   tariffs,  duties  and  inventory
carrying  costs.  Gross profit as a percentage of sales  increased from 50.2% in
the first  quarter of fiscal  1996 to 52.0% in the first  quarter of fiscal 1997
primarily as a result of lower discounts to customers.

         OPERATING EXPENSES.  Total operating expenses increased by $264,000, or
2.4%,  in the first  quarter of fiscal 1997  compared  with the first quarter of
fiscal 1996, but remained flat as a percentage of sales at 33.5%.  Due primarily
to higher amortization of displays, selling, marketing and distribution expenses
increased  $389,000 and  increased as a percentage of sales from 22.8% to 23.4%.
Due  primarily  to a  decrease  in  legal  and  accounting  costs,  general  and
administrative  expenses  declined  by  $125,000  and  from  10.7% to 10.1% as a
percentage of sales.

         NET INTEREST INCOME.  Primarily  because of the Company's higher levels
of cash available for short-term  investment,  net interest  income in the first
quarter of fiscal 1997 increased by $156,000  compared with the first quarter of
fiscal 1996 and increased as a percentage of sales from 0.1% to 0.6%.

         INCOME TAXES.  Primarily  because of the improved  financial results of
the Company's  Hong Kong  subsidiary,  the Company's  first quarter  fiscal 1997
effective  tax rate was  40.0%,  compared  with  42.5% for the first  quarter of
fiscal 1996.

SEASONAL FLUCTUATIONS

         The Company  has  historically  experienced  and expects to continue to
experience  significant  seasonal  fluctuations in its sales and other financial
results that it believes  have  resulted and will  continue to result  primarily
from its  customers'  and users'  buying  patterns.  These buying  patterns have
typically  adversely  affected  orders for the  Company's  products in the third
quarter of each fiscal year.

         Although it is  difficult to predict the future  seasonality  of sales,
the Company  believes that future  seasonality  should be influenced at least in
part  by  customer  and  user  buying  patterns   similar  to  those  that  have
historically affected the Company. Quarterly financial results are also affected
by timing and size of orders from large customers, new product introductions and
line extensions,  timing and size of orders for new products, changes in product
mix, customer mix, competition,  large customers' inventory  management,  vendor
and customer  pricing,  general  economic  conditions,  the health of the retail
environment,  production levels,  supply constraints,  manufacturing  delays and
supplier performance. The seasonality of the Company's financial results and the
unpredictability  of the factors  affecting such  seasonality make the Company's
quarterly  and yearly  financial  results  difficult  to predict  and subject to
significant fluctuation.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash and cash equivalents at September 30, 1996 increased
to $27,462,000 from $19,765,000 at June 30, 1996. In the first quarter of fiscal
1997, net cash of $8,772,000 and $219,000  provided by operating  activities and
financing  activities,  respectively,  offset  net  cash of  $1,286,000  used in
investing  activities.  Of the $8,772,000  net amount  provided by the Company's
operating  activities,  $3,848,000  was provided by net income,  $2,202,000  was
provided by a decrease in inventories  and $1,930,000 was provided by a decrease
in income taxes  receivable,  which amounts were partially offset by an increase
of $1,187,000 in accounts  receivable.  The $219,000 net amount  provided by the
Company's financing activities was provided by the issuance of Common Stock upon
the  exercise  of  warrants.  The  $1,286,000  used in the  Company's  investing
activities was used primarily to acquire machinery and equipment and secondarily
computer equipment and software.

         Primarily  because  of the  timing of orders  and  shipments,  accounts
receivable  (net) increased by 5.0% in the first quarter of fiscal 1997 from the
fiscal 1996  year-end  amount.  Compared  with the  September  30, 1995  amount,
accounts  receivable  increased  by 25.3%  primarily  because of terms  given to
certain large customers. The average collection period of accounts receivable at
September  30, 1996 was 45 days,  compared  with 43 and 42 days at June 30, 1996
and September 30, 1995, respectively.

         Inventories  decreased by 11.2%  compared with the fiscal 1996 year-end
amount and by 29.8%  compared  with the  September  30,  1995  amount  primarily
because of the Company's better control and management of inventory levels.

         The  Company's  bank  line of  credit  allows  for  borrowings  and the
issuance  of  commercial  or  standby  letters of credit up to an  aggregate  of
$5,000,000.  Borrowings  under the line of credit  bear  interest  at either the
bank's  prime  rate or at  LIBOR  plus  1.75%,  at the  Company's  election.  At
September 30, 1996,  Day Runner had no borrowings  under its bank line of credit
but had used the line of  credit  to  secure  outstanding  letters  of credit of
approximately  $1,000,000,  which  reduced  the  availability  under the line of
credit to  approximately  $4,000,000.  Effective  November 1, 1996,  the Company
amended its credit  agreement to be due and payable in full on November 1, 1997.
(See Note 3 to Consolidated Financial Statements.)

         The Company has not incurred  significant  losses or gains from foreign
currency exchange rate fluctuations.  The continuing  expansion of the Company's
Hong Kong, Mexican and United Kingdom  subsidiaries  could,  however,  result in
larger gains or losses as a result of fluctuations in foreign currency  exchange
rates as those  subsidiaries  conduct  business  in whole or in part in  foreign
currencies.

         The Company believes that cash flow from operations, vendor credit, its
existing  working  capital  and its bank line of credit  will be  sufficient  to
satisfy the Company's anticipated cash requirements at least through the next 12
months.  Nonetheless,  the  Company  may seek  additional  sources of capital as
necessary or appropriate  to finance  acquisitions  or to otherwise  finance the
Company's  growth or  operations;  however,  there can be no assurance that such
funds if needed will be available on favorable terms, if at all.

FORWARD LOOKING STATEMENTS

         With the exception of the actual reported  financial  results and other
historical  information,  the statements made in the Management's Discussion and
Analysis of Financial  Condition and Results of Operations  are forward  looking
statements that involve risks and uncertainties  that could affect actual future
results. Such risk and uncertainties include, but are not limited to: timing and
size of orders from large customers,  timing and size of orders of new products,
competition, large customers' inventory management, general economic conditions,
the health of the retail environment,  supply constraints,  supplier performance
and other risks  indicated  in the  Company's  filings with the  Securities  and
Exchange Commission.



<PAGE>


PART II --OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  10.1     Credit  Agreement dated as of May 1, 1993 between the
                           Registrant    and   Wells   Fargo   Bank,    National
                           Association,   including  Line  of  Credit   Note(1),
                           Assumption and Consent to Merger  Agreement  dated as
                           of June 30, 1993, First Amendment to Credit Agreement
                           dated as of December 15, 1993(2), Second Amendment to
                           Credit  Agreement dated as of May 1, 1994,  including
                           Line of Credit  Note(3),  Third  Amendment  to Credit
                           Agreement dated as of October 1, 1994, including Line
                           of  Credit  Note(4),   Fourth   Amendment  to  Credit
                           Agreement  dated as of  October  2,  1995,  including
                           Revolving Line of Credit Note(5) and Fifth  Amendment
                           to Credit  Agreement  dated as of  November  1, 1996,
                           including Revolving Line of Credit Note.

                  27.1     Financial Data Schedule

         (b)      Reports on Form 8-K

                  No reports on Form 8-K were  filed by the  Company  during the
quarter ended September 30, 1996.


(1)Incorporated  by reference to the Registrant's  Quarterly Report on Form
10-Q (File No. 0-19835) filed with the Commission on August 16, 1993.

(2)Incorporated by reference to the Registrant's Annual Report on Form 10-K
(File No. 0-19835) filed with the Commission on March 30, 1994.

(3)Incorporated  by reference to the Registrant's  Quarterly Report on Form
10-Q (File No. 0-19835) filed with the Commission on May 16, 1994.

(4)Incorporated  by reference to the Registrant's  Quarterly Report on Form
10-Q (File No. 0-19835) filed with the Commission on November 14, 1994.

(5)Incorporated  by reference to the Registrant's  Quarterly Report on Form
10-Q (File No. 0-19835) filed with the Commission on November 13, 1995.


<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:  November 13, 1996

                                          Day Runner, Inc.


                                          By:  /s/ MARK A. VIDOVICH
                                               ----------------------
                                               Mark A. Vidovich
                                               Chairman of the Board and
                                                Chief Executive Officer




                                           By: /s/ DENNIS K. MARQUARDT
                                               -----------------------
                                               Dennis K. Marquardt
                                               Executive Vice President, Finance
                                                & Administration and
                                                 Chief Financial Officer



<PAGE>
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<CAPTION>


                                INDEX TO EXHIBITS

                                                                                                       SEQUENTIALLY
                                                                                                         NUMBERED
EXHIBIT NUMBER AND DESCRIPTION                                                                             PAGE
<S>                                                                                                   <C>    


10.1     Fifth Amendment to Credit Agreement dated as of November 1, 1996 between the
         Registrant and Wells Fargo Bank, National Association, including Revolving
         Line of Credit Note.....................................................................

27.1     Financial Data Schedule.................................................................



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