`------------------------------------------------------------------------------------------------------------------------


                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                    Form 10-Q/A
                                                 (Amendment No. 1)

                                                    (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, 2002

                                                        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: 333-31282

                                            O'Sullivan Industries, Inc.
                              (Exact name of registrant as specified in its charter)

                              Delaware                                                    43-0923022
       (State or other jurisdiction of incorporation or organization)          (I.R.S. Employer Identification No.)

                  1900 Gulf Street, Lamar, Missouri                                       64759-1899
              (Address of principal executive offices)                                    (ZIP Code)

                                                  (417) 682-3322
                               (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

         As of November 10, 2002, 100 shares of common stock of O'Sullivan Industries, Inc., par value $1.00 per
share, were outstanding.

------------------------------------------------------------------------------------------------------------------------


                                       The Index to Exhibits is on page 32.

                                                   Page 1 of 34

                                                         1




                                             Explanation of Amendment

         We are filing this amendment to our Quarterly Report on Form 10-Q for the quarter ended September 30,
2002 to restate the way we account for the tax sharing agreement between RadioShack Corporation and O'Sullivan
Holdings.

         In response to a comment letter from the Securities and Exchange Commission, we, after consulting with
our independent accountants, determined to revise our method of accounting for the tax sharing agreement.  Under
the revised method of accounting, we recorded the deferred tax asset created by the increased tax basis in our assets
as a result of elections under Sections 338(g) and 338(h) of the Internal Revenue Code by RadioShack and
O'Sullivan as of February 1994.  Simultaneously, we also recorded our total payable to O'Sullivan Holdings related
to the tax sharing agreement.  Each of these amounts was approximately $147.9 million as of February 1994.  These
amounts were reduced as we realized benefits from the increased deductions from our increased basis and made
payments to O'Sullivan Holdings.  In March 2002, we placed a valuation allowance against our net deferred tax
assets, debiting tax expense for the amount of the valuation allowance.

         This report reflects the revised method of accounting.  We are in the process of amending our quarterly
report on Form 10-Q for the quarter ended December 31, 2002.

                                                         2




                                                      PART  I
Item 1.  Financial Statements.


                                    O'SULLIVAN INDUSTRIES, INC. AND SUBSIDIARIES
                        (A wholly owned subsidiary of O'Sullivan Industries Holdings, Inc.)
                                       UNAUDITED CONSOLIDATED BALANCE SHEETS
                                       (in thousands, except for share data)


                                                                                      September 30,       June 30,
                                       Assets                                              2002             2002
                                                                                     ----------------    -----------
                                                                                        (Restated)       (Restated)
Current assets:
   Cash and cash equivalents                                                          $        13,327   $     15,777
   Trade receivables, net of allowance for doubtful accounts
      of $4,302 and $4,101, respectively                                                       34,028         37,035
   Inventories, net                                                                            57,006         52,397
   Prepaid expenses and other current assets                                                    3,478          2,765
                                                                                        -------------    -----------
         Total current assets                                                                 107,839        107,974

Property, plant and equipment, net                                                             77,373         79,144
Other assets                                                                                   18,477         18,944
Goodwill, net of accumulated amortization                                                      38,088         38,088
                                                                                        -------------    -----------
                Total assets                                                          $       241,777   $    244,150
                                                                                        =============    ===========

                        Liabilities and Stockholder's Deficit
Current liabilities:
   Accounts payable                                                                   $        11,908   $     10,887
   Current portion of long-term debt                                                            8,495          4,430
   Accrued advertising                                                                         12,901         11,680
   Accrued liabilities                                                                         14,982         18,388
   Payable to parent - tax sharing agreement                                                   10,337         11,020
         Total current liabilities                                                             58,623         56,405

Long-term debt, less current portion                                                          208,592        213,452
Other liabilities                                                                               2,706          2,570
Payable to parent - tax sharing agreement                                                      67,940         70,354
Other payable to parent                                                                           463            181
                                                                                        -------------    -----------
                Total liabilities                                                             338,324        342,962

Commitments and contingent liabilities (Notes 2, 4, 8, 9 and 10)

Stockholder's deficit:
   Common stock; $1.00 par value, 100 shares authorized, issued and outstanding                     -              -
   Retained deficit                                                                           (96,255)       (98,507)
   Accumulated other comprehensive loss                                                          (292)          (305)
                                                                                        -------------    -----------
                Total stockholder's deficit                                                   (96,547)       (98,812)
                                                                                        -------------    -----------
                Total liabilities and stockholder's deficit                           $       241,777   $    244,150
                                                                                        =============    ===========

                                                                                        =============    ===========
              The accompanying notes are an integral part of these consolidated financial statements.
                                                                                        =============    ===========




                                                         3





                                    O'SULLIVAN INDUSTRIES, INC. AND SUBSIDIARIES
                        (A wholly owned subsidiary of O'Sullivan Industries Holdings, Inc.)
                                  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (in thousands)

                                                                                            Three months ended
                                                                                               September 30,
                                                                                         -------------------------
                                                                                             2002          2001
                                                                                         ------------   ----------
                                                                                          (Restated)
Net sales                                                                               $      71,557  $    82,193
Cost of sales                                                                                  51,584       61,725
                                                                                         ------------   ----------

Gross profit                                                                                   19,973       20,468

Operating expenses:
   Selling, marketing and administrative                                                       11,998       14,108
                                                                                         ------------   ----------

Operating income                                                                                7,975        6,360

Other income (expense)
   Interest expense                                                                            (5,775)      (8,016)
   Interest income                                                                                 52           85
                                                                                         ------------   ----------

Income (loss) before income tax provision                                                       2,252       (1,571)
Income tax provision (benefit)                                                                      -         (550)
                                                                                         ------------   ----------

Net income (loss)                                                                       $       2,252  $    (1,021)
                                                                                         ============   ==========

              The accompanying notes are an integral part of these consolidated financial statements.


                                                         4





                                   O'SULLIVAN INDUSTRIES, INC. AND SUBSIDIARIES
                       (A wholly owned subsidiary of O'Sullivan Industries Holdings, Inc.)
                                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (in thousands)

                                                                                           Three months ended
                                                                                             September 30,
                                                                                      ----------------------------
                                                                                          2002            2001
                                                                                      ------------    ------------
                                                                                       (Restated)
Cash flows provided (used) by operating activities:
        Net income (loss)                                                           $        2,252   $      (1,021)
        Adjustments to reconcile net income (loss) to net cash provided (used)
           by operating activities:
                Depreciation and amortization                                                3,264           3,421
                Amortization of debt issuance costs                                            393             393
                Amortization of debt discount                                                   91              80
                Interest rate collar                                                          (584)          1,201
                Bad debt expense                                                               448             349
                Loss on disposal of assets                                                      11             117
                Accrual of special payment on options to purchase Series A
                junior preferred stock                                                         300             262
        Changes in assets and liabilities:
                Trade receivables                                                            2,559            (169)
                Inventories                                                                 (4,609)           (653)
                Other assets                                                                  (693)            331
                Accounts payable, accrued liabilities and other liabilities                   (624)         11,803
                Payable to parent - tax sharing agreement                                   (3,097)              -
                                                                                      ------------    ------------
Net cash provided (used) by operating activities                                              (289)         16,114
                                                                                      ------------    ------------

Cash flows used for investing activities:
        Capital expenditures                                                                (1,557)         (4,084)
                                                                                      ------------    ------------

Cash flows used for financing activities:
        Repayment of borrowings                                                               (886)         (5,886)
        Advances on intercompany loans                                                         282             237
                                                                                      ------------    ------------
Net cash flows used by financing activities                                                   (604)         (5,649)

Net increase (decrease) in cash and cash equivalents                                        (2,450)          6,381
Cash and cash equivalents, beginning of period                                              15,777           7,060
                                                                                      ------------    ------------
Cash and cash equivalents, end of period                                            $       13,327   $      13,441
                                                                                      ============    ============

Non-cash investing activities:
        Capital expenditures included in accounts payable                           $          160   $         671
             The accompanying notes are an integral part of these consolidated financial statements.


                                                         5





                                 O'SULLIVAN INDUSTRIES, INC. AND SUBSIDIARIES
                      (A wholly owned subsidiary of O'Sullivan Industries Holdings, Inc.)
                     UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT
                                 For the three months ended September 30, 2002
                                                (in thousands)

                                                              Accumulated
                                                                 other             Total
                                             Retained        comprehensive     stockholder's    Comprehensive
                                             deficit             loss             deficit           income
                                           ------------     ---------------   ---------------  ----------------

                                           ------------     ---------------   ---------------  ----------------

Balance, June 30, 2002 (Restated)        $      (98,507)  $            (305)$         (98,812)

  Net income (Restated)                           2,252                                 2,252 $           2,252

  Other comprehensive income                                             13                13                13
                                           ------------     ---------------   ---------------  ----------------

                                           ------------     ---------------   ---------------  ----------------
Balance, September 30, 2002 (Restated)   $      (96,255)  $            (292)$         (96,547)$           2,265
                                           ============     ===============   ===============  ================

            The accompanying notes are an integral part of these consolidated financial statements.
                                           ============     ===============   ===============  ================



                                                         6




                                           O'SULLIVAN  INDUSTRIES,  INC.
                        (a wholly owned subsidiary of O'Sullivan Industries Holdings, Inc.)
                               NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                                September 30, 2002

Note 1--Basis of Presentation

        The unaudited consolidated financial statements of O'Sullivan Industries, Inc. and subsidiaries
("O'Sullivan"), a wholly owned subsidiary of O'Sullivan Industries Holdings, Inc. ("O'Sullivan Holdings"), included
herein have been prepared in accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-Q and Article 10 of Regulation S-X.  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 of normal recurring accruals) considered necessary for a fair presentation have been
included.  The financial statements should be read in conjunction with the audited financial statements and notes
thereto included in O'Sullivan's amended Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year
ended June 30, 2002.  The interim results are not necessarily indicative of the results that may be expected for a full
year.

Note 2--Revised Accounting for Tax Sharing Agreement with RadioShack.

        In 1994, RadioShack, then Tandy Corporation, completed an initial public offering of O'Sullivan Holdings.
In connection with the offering, O'Sullivan Holdings entered into a tax sharing and tax benefit reimbursement
agreement with RadioShack.  O'Sullivan Holdings and RadioShack made elections under Sections 338(g) and
338(h)(10) of the Internal Revenue Code with the effect that the tax basis of O'Sullivan's assets was increased to the
deemed purchase price of the assets, and an equal amount of such increase was included as taxable income in the
consolidated federal tax return of RadioShack.  The result was that the tax basis of O'Sullivan's assets exceeded the
historical book basis O'Sullivan used for financial reporting purposes.

        The increased tax basis of O'Sullivan's assets results in increased tax deductions and, accordingly, reduced
O'Sullivan's taxable income or increased its net operating loss.  Under the tax sharing agreement, O'Sullivan
Holdings is contractually obligated to pay RadioShack nearly all of the federal tax benefit expected to be realized
with respect to such additional basis.  The payments under the agreement represent additional consideration for the
stock of O'Sullivan Industries, Inc. and further increase the tax basis of O'Sullivan's assets from the 1994 initial
public offering when payments are made to RadioShack.

        To the extent the benefit of these basis step-up deductions caused O'Sullivan to have a federal taxable loss,
O'Sullivan Holdings was only obligated to pay RadioShack to the extent that the benefits were used to reduce
taxable income to zero.  Any additional tax deductions resulting from the step-up create a net operating loss ("NOL")
carryforward on O'Sullivan's federal income tax return.  Under the terms of the tax sharing agreement, if O'Sullivan
utilized this NOL carryforward to generate future tax savings, O'Sullivan Holdings was also obligated to remit that
benefit received to RadioShack.

        Since 1994, O'Sullivan has treated the amount due to RadioShack by O'Sullivan Holdings as income tax
expense when such amounts become payable and to the extent that O'Sullivan Holdings had sufficient consolidated
taxable income.  Thus, O'Sullivan's tax expense approximated what it would have been in the absence of the
Section 338(h)(10) step-up in basis and the tax sharing agreement.

        Under this accounting method, the deferred tax asset from the step-up in basis, the obligation to RadioShack
and O'Sullivan Holdings' payments to RadioShack were not recorded on O'Sullivan's consolidated balance sheets
because O'Sullivan deemed the benefits to be an asset of RadioShack.  When the tax benefits were received and paid
to RadioShack, O'Sullivan recorded the payment as tax expense since this amount would have been paid as federal
income taxes in the absence of the step-up in basis and the tax sharing agreement.

                                                         7




        In November 1999, O'Sullivan Holdings completed a leveraged recapitalization transaction which
significantly increased the debt of O'Sullivan.  As a result of the higher debt levels, O'Sullivan also experienced
increased interest expense, which reduced the taxable income of O'Sullivan and also reduced the tax benefits used
from the deductions arising from the step-up in basis.  O'Sullivan Holdings reduced its payments to RadioShack
accordingly.  RadioShack claimed that the deductions arising from the increased interest payments should not impact
tax benefit payments due RadioShack under the tax agreement.  RadioShack pursued this matter and prevailed in an
arbitration ruling in March 2002.  O'Sullivan Holdings reached a settlement agreement with RadioShack in May
2002.  Pursuant to the settlement agreement, O'Sullivan Holdings paid RadioShack $24.6 million in May 2002 and
an additional $3.1 million in June 2002.  The sum of these two payments ($27.7 million) represented the amount due
RadioShack under the settlement agreement through June 30, 2002.  These amounts represent the calculation of what
benefits O'Sullivan would have realized had it not had the additional interest expense from the recapitalization and
merger.  The settlement agreement requires calculations into the future and quarterly payments to RadioShack if
O'Sullivan's taxable income adjusted for the additional interest expense shows that it would have realized the
benefits had it not incurred the additional interest expense.  If on this basis, O'Sullivan could have used the
deductions from the step-up in basis, O'Sullivan Holdings is required to make a payment to RadioShack even though
O'Sullivan may not be receiving any current tax benefit from these deductions on its federal income tax return.

        Following the decision in the arbitration and the settlement agreement with RadioShack, O'Sullivan recorded
the $24.6 million paid by O'Sullivan Holdings to RadioShack as a deferred tax asset at March 31, 2002.  O'Sullivan
believed that this was appropriate as the payment represented the tax benefit O'Sullivan could realize from future use
of net operating losses on its consolidated federal income tax return if it had sufficient taxable income in the future.
After recording a tax provision of $3.4 million for the quarter ended March 31, 2002 and offsetting its deferred tax
liabilities of $10.2 million, O'Sullivan had a net deferred tax asset of $11.0 million at March 31, 2002.

        Under Statement of Financial Accounting Standards ("SFAS") 109, Accounting for Income Taxes,
O'Sullivan must determine if it is more likely than not that its net deferred tax asset will be realized as a reduction in
tax liabilities in the future.   SFAS 109 requires objective evidence to support the more likely than not conclusion.
The arbitration decision dramatically affected O'Sullivan's liquidity, which reduced the amounts it could invest in
sales efforts or cost improvements, as most free cash flow would now be used for O'Sullivan Holdings' payments to
RadioShack or repay O'Sullivan's indebtedness.  In addition, it became evident to O'Sullivan by March 2002 that
the prolonged economic slowdown that started prior to September 11, 2001 was continuing.  This, coupled with the
adverse effect on O'Sullivan's liquidity of the settlement, caused O'Sullivan to lower its projections of future taxable
income.  Accordingly, management projected O'Sullivan's expected future taxable income utilizing operating
performance it achieved in fiscal 2002 assuming O'Sullivan's performance would be no better or worse over an
extended period of time.  Such projections indicate that O'Sullivan would not have taxable income until 2009 when
substantially all the tax benefit deductions had been taken.  At that point, the projections indicated that the net
operating losses existing at that time would be utilized before they expire.  However, O'Sullivan currently has and is
expected to have taxable losses for a number of years in the future.  Projections over a long time are inherently
uncertain, and O'Sullivan cannot provide objective evidence that its operations in 2009 and beyond will produce
sufficient taxable income.  As a result, O'Sullivan provided a valuation allowance in its March 2002 quarter of
$11.0 million against all of its net deferred tax assets with a corresponding charge to income tax expense.  Consistent
with O'Sullivan's prior accounting, both before and after the recapitalization and merger, O'Sullivan did not record
any deferred tax assets related to future deductions from the step-up in basis or any future obligations to RadioShack
as they were still contingent upon its taxable income in the future.

        Similarly, in O'Sullivan's June, September and December 2002 financial statements, it accounted for each of
O'Sullivan Holdings' payments to RadioShack in the same manner as the initial $24.6 million payment under the
settlement agreement by recording a deferred tax asset to the extent that O'Sullivan could not benefit currently from
the increased deductions.  O'Sullivan then provided a valuation allowance against the additional deferred tax asset
with a corresponding charge to income tax expense on a quarter by quarter basis.  O'Sullivan believed this method
was in conformity with accounting principles generally accepted in the United States and consistent with its
accounting for the tax sharing agreement since 1994.


                                                         8




        In the third quarter of fiscal 2003, O'Sullivan received a comment letter from the staff of the Securities and
Exchange Commission ("SEC") on the accounting for the tax sharing agreement.  In the course of preparing the
response to the SEC staff's comment letter, O'Sullivan, in consultation with its independent accountants, reassessed
the accounting for the tax sharing agreement in light of the arbitration settlement between O'Sullivan Holdings and
RadioShack and concluded that the method of accounting for the tax sharing agreement should be changed.
O'Sullivan determined that the deferred tax asset created by the step-up in basis and the additional basis from the
probable future payments should be recorded as of February 1994.  At the same time, O'Sullivan recorded its
obligation to O'Sullivan Holdings under the tax sharing agreement.  The amounts of the deferred tax asset and the
obligation to O'Sullivan Holdings  were each $147.9 million at February 1994.  From 1994 through December 2001,
the amounts of the deferred tax asset and the obligation to O'Sullivan Holdings were reduced as O'Sullivan realized
the benefits of the deferred tax asset and O'Sullivan Holdings paid RadioShack amounts due under the tax sharing
agreement.

        At March 31, 2002, a full valuation allowance was provided against the $95.5 million net deferred tax asset,
which consists of the $11.0 million valuation allowance originally recorded in the March 2002 quarter plus an
additional $84.5 million representing the balance of the deferred tax asset at that time.  The valuation allowance at
June 30, 2002 of $94.3 million, together with the $4.4 million tax provision for the fiscal year, represent the $98.7
million recorded as tax expense for the year ended June 30, 2002.  O'Sullivan recorded the valuation allowance
because it was unable to determine, based on objective evidence, that it is more likely than not that O'Sullivan would
be able to utilize its net operating losses prior to their expiration.  If at a future date O'Sullivan determines that some
or all of the deferred tax asset will more likely than not be realized, O'Sullivan will reverse the appropriate portion of
the valuation allowance and credit income tax expense.

        O'Sullivan Holdings' remaining maximum obligation to RadioShack was $109.1 million at March 31, 2002.
The obligation was reduced by subsequent payments and was $78.3 million and $81.4 million at September 30, 2002
and June 30, 2002, respectively.  O'Sullivan Holdings currently believes that it is probable that future payments to
RadioShack will be made.

        In summary, instead of accounting for O'Sullivan's deferred tax assets resulting from the step-up in basis as
tax expense through a valuation allowance on a quarter by quarter basis as O'Sullivan Holdings makes payments to
RadioShack under the tax sharing agreement, O'Sullivan revised its accounting to record the aggregate deferred tax
asset and the obligation to O'Sullivan Holdings in February 1994.  The deferred tax asset has been reduced as
O'Sullivan realized the benefits from 1994 to March 2002 and was fully offset by the March 2002 valuation
allowance.  Therefore, this revised method of accounting will increase O'Sullivan's net income (or reduce
O'Sullivan's net loss) by the amount O'Sullivan Holdings pays RadioShack for each quarterly period after March 31,
2002 through the quarter ending March 31, 2009 or until O'Sullivan can determine, based on objective evidence,
that it is more likely than not that O'Sullivan will be able to utilize its net operating losses prior to their expiration
and reverses all or a portion of the valuation allowance on its deferred tax assets.

        The expected timing or amounts of O'Sullivan Holdings' payments to RadioShack are not affected by the
revised method of accounting, although the future payments to RadioShack are contingent upon O'Sullivan Holdings
achieving consolidated taxable income calculated on the basis stipulated in the settlement agreement.

        The impact of the restatement on the consolidated statements of operations and consolidated balance sheets
is presented below.  The amounts previously reported are derived from O'Sullivan's original quarterly report on
Form 10-Q for the quarter ended September 30, 2002 filed November 14,  2002.


                                                         9





                                                    For the three months ended
                                                        September 30, 2002
                                                 ---------------------------------
                                                      Amounts
                                                    previously
                                                     reported         As restated
                                                   -------------     -------------
                                                          (in thousands)
                                                   -------------     -------------
Consolidated statements of operations:

     Income before income tax provision          $         2,252    $        2,252
     Income tax provision                                  3,097                 -
     Net income (loss)                                      (845)            2,252



                                                  September 30, 2002               June 30, 2002
                                            ------------------------------  ----------------------------
                                                Amounts                        Amounts       s restated
                                              previously                     previously
                                               reported       As restated     reported      A
                                            ---------------  -------------  -------------   ------------
                                                    (in thousands)                 (in thousands)
                                                             --                             --
Consolidated balance sheets:

     Total assets                            $      241,777  $     241,777  $     244,150   $    244,150
     Payable to parent-tax sharing
         agreement                                        -         78,277              -         81,374
     Total liabilities                              260,047        338,324        261,588        342,962
     Retained deficit                                17,978         96,255         17,133         98,507
     Total stockholder's deficit                     18,270         96,547         17,438         98,812

Note 3--Derivative Financial Instruments

        As required under O'Sullivan's senior credit facility, O'Sullivan hedged one-half of its term loans with an
initial notional amount of $67.5 million with a three-year, costless interest rate collar.  The collar, which expires in
March 2003, is based on three-month LIBOR and has a floor of 6.43% and a ceiling of 8.75%.  O'Sullivan recorded
additional (reduced) interest expense of $(584,000) and $1.2 million for the quarters ended September 30, 2002 and
September 30, 2001, respectively.  These amounts represent the changes in fair value of the interest rate collar.  To
terminate this contract at September 30, 2002 and June 30, 2002, O'Sullivan would have been required to pay the
counter-party approximately $1.5 million and $2.1 million, respectively.  The fair value of the interest rate collar is
included in accrued liabilities in the accompanying consolidated balance sheets.

Note 4--New Accounting Standards

        In April 2001, the Emerging Issues Task Force ("EITF") reached a consensus on EITF No. 00-25, Vendor
Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products.  This issue
addresses the income statement classification of slotting fees, cooperative advertising arrangements and buydowns.
The consensus requires that certain customer promotional payments that O'Sullivan previously classified as selling
expenses be classified as a reduction of revenue.  O'Sullivan adopted EITF 00-25 effective January 1, 2002 and
reclassified certain selling, marketing and administrative expenses as a reduction of net sales.  Its adoption by
O'Sullivan had no impact on operating income or net loss.  As a result of the adoption of EITF 00-25, for the three
months ended September 30, 2001, $4.1 million was reclassified as a reduction in revenue rather than as selling,
marketing and administrative expense.

         In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 143, Accounting for Asset
Retirement Obligations.  This pronouncement, which is effective for fiscal years beginning after June 15, 2002,
addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived

                                                        10




assets and the associated asset retirement costs.  O'Sullivan adopted this pronouncement effective July 1, 2002.  The
adoption of SFAS 143 did not have an impact on O'Sullivan's financial results.

         In August 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets.  This pronouncement, which is effective for fiscal years beginning after December 15, 2001, addresses
financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of.
O'Sullivan adopted this pronouncement effective July 1, 2002.  The adoption of SFAS 144 had no effect on
O'Sullivan's results of operations but did impact its balance sheet presentation as described below.

         In January 2001, O'Sullivan closed its Cedar City, Utah production facility.  O'Sullivan is actively
attempting to sell the Utah land, building and excess equipment as soon as practicable.  Certain equipment has been
relocated to the Missouri and Virginia plants.  Fixed assets with a net book value of $20.3 million were valued at the
lower of their carrying amount or fair value less cost to sell, resulting in an impairment charge of approximately $8.7
million in the second quarter of fiscal 2001.  The costs of the long-lived assets held for sale and the associated
accumulated depreciation have been reclassified from property, plant and equipment to other assets on the
accompanying consolidated balance sheets.  There are no other significant assets or liabilities relating to the
discontinued Utah operation.  The fair value less cost to sell is an estimate and the impairment may be adjusted in the
future.

         In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13 and Technical Corrections.  This pronouncement updates, clarifies and simplifies existing
accounting pronouncements.  The pronouncement, in part, addresses the accounting for gains and losses from the
extinguishment of debt.  O'Sullivan adopted SFAS 145 effective July 1, 2002.  There was no impact on O'Sullivan's
financial position or results of operations.

         In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal
Activities.  This pronouncement addresses financial accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF 94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).  SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred rather than
the date of an entity's commitment to an exit plan and establishes that fair value is the objective for initial
measurement of the liability.  The provisions of this pronouncement are effective for exit or disposal activities that
are initiated after December 31, 2002.  O'Sullivan does not believe SFAS 146 will have a material impact on its
financial position or results of operations.

Note 5--Shipping and Handling Costs

         O'Sullivan reports amounts billed to customers as revenue, the cost for warehousing operations in cost of
sales and freight out costs as part of selling, marketing and administrative expenses.  Freight out costs included in
selling, marketing and administrative expenses in the first quarters of fiscal 2003 and fiscal 2002 were approximately
$2.1 million and $2.4 million, respectively.

Note 6--Inventory

         Inventory, net, consists of the following:


                      September 30,     June 30,
                          2002            2002
                     ---------------   -----------
                              (in thousands)
                                       --
Finished goods         $      40,932   $    39,199
Work in process                5,175         5,158
Raw materials                 10,899         8,040
                        ------------     ---------
                       $      57,006   $    52,397
                        ============     =========
Note 7--Condensed Consolidating Financial Information

         In November 1999, O'Sullivan issued $100 million of 13.375% Senior Subordinated Notes due 2009.
These notes were unsecured obligations of O'Sullivan; however, they were guaranteed on an unsecured basis by its
subsidiaries O'Sullivan Industries - Virginia, Inc.  ("O'Sullivan Industries - Virginia") and O'Sullivan Furniture
Factory Outlet, Inc.  In fiscal 2000, O'Sullivan exchanged the notes issued in November 1999 for notes with
substantially identical terms and associated guarantees.  The exchange notes have been registered under the
Securities Act of 1933, as amended.

         O'Sullivan also is the obligor under a senior secured credit facility totaling $175 million.  This facility is
secured by substantially all the assets of O'Sullivan and its guarantor subsidiaries O'Sullivan Industries - Virginia
and O'Sullivan Furniture Factory Outlet, Inc.  The credit facility is also guaranteed by O'Sullivan Holdings,
O'Sullivan's parent.  Security for the credit facility includes first priority liens and security interests in the stock of
O'Sullivan, O'Sullivan Industries - Virginia and O'Sullivan Furniture Factory Outlet, Inc.

         The accompanying condensed consolidating financial information has been prepared and presented
pursuant to SEC rules and regulations.  This information is not intended to present the financial position, results of
operations and cash flows of the individual companies in accordance with generally accepted accounting principles.

         The financial information for O'Sullivan Furniture Factory Outlet, Inc. is included in the consolidated
results of O'Sullivan Industries.  O'Sullivan Furniture Factory Outlet, Inc. commenced operations in April 2002.
Net sales and net income for the three months ended September 30, 2002 were $203,000 and $13,000, respectively.
At September 30, 2002 and June 30, 2002, total assets were $226,000 and $191,000, respectively.  Total liabilities,
excluding payables to affiliates, at September 30, 2002 and June 30, 2002 were $8,000 and $20,000, respectively.

         As discussed in Note 2, O'Sullivan has revised its accounting for the tax sharing agreement with
RadioShack and restated the amounts below accordingly.

Condensed Consolidating Statements of Operations


                                                           Three months ended September 30, 2002
                                                                       (in thousands)
                                             -----------------------------------------------------------------
                                                             O'Sullivan
                                              O'Sullivan     ndustries -     Consolidating
                                              Industries    I Virginia        Adjustments      Consolidated
                                             -------------  -------------   ---------------  -----------------
                                              (Restated)     (Restated)       (Restated)        (Restated)
Net sales                                  $        52,348$        19,209 $               -$            71,557
Cost of sales                                       37,011         14,573                 -             51,584
                                             -------------  -------------   ---------------  -----------------

Gross profit                                        15,337          4,636                 -             19,973

Operating expenses:
      Selling, marketing and administrative         10,039          1,959                 -             11,998
                                             -------------  -------------   ---------------  -----------------

Op
Operating income                                     5,298          2,677                 -              7,975
Other income (expense):
      Interest expense                              (5,644)          (131)                -             (5,775)
      Interest income                                   52              -                 -                 52
                                             -------------  -------------   ---------------  -----------------

Income (loss) before income tax provision             (294)         2,546                 -              2,252
Income tax provision                                     -              -                 -                  -
                                             -------------  -------------   ---------------  -----------------

Net income (loss)                          $          (294$         2,546 $               -$             2,252
                                             =============  =============   ===============  =================


                                                        11





                                                           Three months ended September 30, 2001
                                                                       (in thousands)
                                              ----------------------------------------------------------------
                                                              O'Sullivan
                                               O'Sullivan     ndustries -    Consolidating
                                               Industries    I Virginia       Adjustments       Consolidated
                                              ------------   -------------  ---------------   ----------------

Net sales                                   $       60,550 $        21,643$               - $           82,193
Cost of sales                                       45,235          16,490                -             61,725
                                              ------------   -------------  ---------------   ----------------

Gross profit                                        15,315           5,153                -             20,468

Operating expenses:
      Selling, marketing and administrative         11,409           2,699                -             14,108
                                              ------------   -------------  ---------------   ----------------

Op
Operating income                              3,906                  2,454                -              6,360
Other income (expense):
      Interest expense                              (7,850)           (166)               -             (8,016)
      Interest income                                   85               -                -                 85
                                              ------------   -------------  ---------------   ----------------

Income (loss) before income tax provision           (3,859)          2,288                -             (1,571)
Income tax provision (benefit)                      (1,349)            799                -               (550)
                                              ------------   -------------  ---------------   ----------------
Net income (loss)                           $       (2,510)$         1,489$               - $           (1,021)
                                              ============   =============  ===============   ================



Condensed Consolidating Balance Sheets
                                                                         September 30, 2002
                                                                           (in thousands)
                                                  ----------------------------------------------------------------
                                                                  O'Sullivan      onsolidating
                                                   O'Sullivan     ndustries -     Adjustments
                                                   Industries    I Virginia      C                  Consolidated
                                                  -------------  -------------   --------------   ----------------
                                                   (Restated)     (Restated)       (Restated)        (Restated)
ASSETS:
      Current assets                            $        89,483$        18,356 $              - $          107,839
      Property, plant and equipment, net                 44,002         33,371                -             77,373
      Other assets                                       18,382             95                -             18,477
      Investment in subsidiaries                         26,402              -          (26,402)                 -
      Goodwill                                           38,088              -                -             38,088
      Receivable from parent                                  -         20,525          (20,525)                 -
                                                  -------------  -------------   --------------   ----------------
           Total assets                         $       216,357$        72,347 $        (46,927)$          241,777
                                                  =============  =============   ==============   ================

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT):
      Current liabilities                       $        37,473$        21,150 $              - $           58,623
      Long-term debt                                    198,592         10,000                -            208,592
      Other liabilities                                   2,706              -                -              2,706
      Payable to parent - tax sharing agreement          53,145         14,795                -             67,940
      Other payable to parent                            20,988              -          (20,525)               463
      Stockholder's equity (deficit)                    (96,547)        26,402          (26,402)           (96,547)
                                                  -------------  -------------   --------------   ----------------
           Total liabilities and stockholder's  $       216,357$        72,347 $        (46,927)$          241,777
           equity (deficit)
                                                  =============  =============   ==============   ================



                                                        12





                                                                        June 30, 2002
                                                                       (in thousands)
                                                -------------------------------------------------------------
                                                                O'Sullivan
                                                 O'Sullivan    Industries -    Consolidating
                                                 Industries      Virginia       Adjustments     Consolidated
                                                ------------  --------------  ---------------  --------------
                                                 (Restated)     (Restated)      (Restated)       (Restated)
ASSETS:
      Current assets                          $       92,556$         15,418$               -$        107,974
      Property, plant and equipment, net              45,049          34,095                -          79,144
      Other assets                                    18,842             102                -          18,944
      Investment in subsidiaries                      23,856               -          (23,856)              -
      Goodwill                                        38,088               -                -          38,088
      Receivable from parent                               -          19,948          (19,948)              -
                                                ------------  --------------  ---------------  --------------
           Total assets                       $      218,391$         69,563$         (43,804$        244,150
                                                ============  ==============  ===============  ==============

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT):
      Current liabilities                     $       35,493$         20,912$               -$         56,405
      Long-term debt                                 203,452          10,000                -         213,452
      Other liabilities                                2,570               -                -           2,570
      Payable to parent - tax sharing agreement       55,559          14,795                -          70,354
      Other payable to parent                         20,129               -          (19,948)            181
      Stockholder's equity (deficit)                 (98,812)         23,856          (23,856)        (98,812)
                                                ------------  --------------  ---------------  --------------
           Total liabilities and stockholder's$      218,391$         69,563$         (43,804$        244,150
                 equity (deficit)
                                                ============  ==============  ===============  ==============


Condensed Consolidating Statements of Cash Flows
                                                                   Three months ended September 30, 2002
                                                                               (in thousands)
                                                        -----------------------------------------------------------
                                                        O'Sullivan     O'Sullivan    Consolidating
                                                        Industries     Industries -   Adjustments
                                                                        Virginia                    Consolidated
                                                        -----------   ------------  --------------  ---------------
                                                        (Restated)     (Restated)     (Restated)      (Restated)
Net cash flows provided (used) by operating
      activities:                                     $      (1,589)  $      1,300  $           -$            (289)
                                                        -----------   ------------  --------------  ---------------
Investing activities:
      Capital expenditures                                     (834)          (723)              -           (1,557)
      Repayment of loans to affiliates                          577              -            (577)               -
                                                        -----------   ------------  --------------  ---------------
           Net                                                 (257)          (723)           (577)          (1,557)
                                                        -----------   ------------  --------------  ---------------

Op
Financing activities:
      Repayment of loans from affiliates                        282           (577)            577              282
      Repayment of borrowings                                  (886)             -               -             (886)
                                                        -----------   ------------  --------------  ---------------
           Net                                                 (604)          (577)            577             (604)
                                                        -----------   ------------  --------------  ---------------

Cash and cash equivalents:
      Net decrease in cash and cash
           equivalents                                       (2,450)             -               -           (2,450)
      Cash and cash equivalents, beginning of
           period                                            15,773              4               -           15,777
                                                        -----------   ------------  --------------  ---------------
      Cash and cash equivalents, end of  period       $      13,323 $            4$              -$          13,327
                                                        ===========   ============  ==============  ===============

                                                                   Three months ended September 30, 2001
                                                                               (in thousands)
                                                        -----------------------------------------------------------
                                                                        'Sullivan
                                                         O'Sullivan    Ondustries    onsolidating
                                                         Industries    IVirginia  - CAdjustments     Consolidated
                                                        -------------  -----------  --------------  ---------------
Net cash flows provided by operating activities:      $        12,429$       3,685$              -$          16,114
                                                        -------------  -----------  --------------  ---------------
Investing activities:
      Capital expenditures                                     (2,039)      (2,045)              -           (4,084)
      Repayment of loans to affiliates                          1,640            -          (1,640)               -
                                                        -------------  -----------  --------------  ---------------
           Net                                                   (399)      (2,045)         (1,640)          (4,084)
                                                        -------------  -----------  --------------  ---------------
Financing activities:
      Repayment of loans from affiliates                          237       (1,640)          1,640              237
      Repayment of borrowings                                  (5,886)           -               -           (5,886)
                                                        -------------  -----------  --------------  ---------------
           Net                                                 (5,649)      (1,640)          1,640           (5,649)
                                                        -------------  -----------  --------------  ---------------

Cash and cash equivalents:
      Net increase in cash and cash equivalents                 6,381            -               -            6,381
      Cash and cash equivalents, beginning of
           period                                               7,056            4               -            7,060
                                                        -------------  -----------  --------------  ---------------
      Cash and cash equivalents, end of period        $        13,437$           4$              -$          13,441
                                                        =============  ===========  ==============  ===============

Note 8--Income Taxes

         O'Sullivan is included in the consolidated federal income tax return filed by O'Sullivan Holdings.  In
accordance with the intercompany tax allocation policy between O'Sullivan and O'Sullivan Holdings, O'Sullivan
remits to O'Sullivan Holdings an amount equal to its current tax liability calculated as if O'Sullivan filed a separate
tax return.

         O'Sullivan recorded no tax expense for the three months ended September 30, 2002 because of the
valuation allowance recorded in the quarter ended March 31, 2002.  See Note 2.

Note 9--Related Party Transactions

         O'Sullivan entered into a management services agreement with Bruckmann, Rosser, Sherrill & Co., LLC
("BRS") for strategic and financial advisory services on November 30, 1999.  The fee for these services is the
greater of (a) 1% of O'Sullivan's consolidated cash flow (as defined in the indenture related to the O'Sullivan
Industries senior subordinated notes) or (b) $300,000 per year.  Under the management services agreement, BRS can
also receive reimbursement for expenses which are limited to $50,000 a year by the senior credit facility.

         The senior credit facility and the management services agreement both contain certain restrictions on the
payment of the management fee.  The management services agreement provides that no cash payment for the
management fee can be made unless the fixed charge coverage ratio (as defined in the indenture relating to the
O'Sullivan senior subordinated notes) for O'Sullivan's most recently ended four full fiscal quarters would have been
at least 2.0 to 1.0.  All fees and expenses under the management services agreement are subordinated to the senior
subordinated notes.

         The management fees and reimbursable expenses of $110,000 and $97,000 recognized in the first quarter of
fiscal years 2003 and 2002, respectively, are included in selling, marketing and administrative expense in the
accompanying consolidated statements of operations.  O'Sullivan paid BRS $713,000 in the first quarter of fiscal
2003 for the balance owed through June 30, 2002 and $305,000 as a prepayment of the fiscal 2003 management fee.
The prepaid balance at September 30, 2002 was $195,000 and is included in prepaid expenses and other current
assets on the consolidated balance sheet.  The amount due BRS at June 30, 2002 approximated $719,000 and is
included in accrued liabilities on the consolidated balance sheet.

                                                        13




Note 10--Commitments and Contingencies

         Tax Sharing Agreement with RadioShack.  Future tax sharing agreement payments are contingent on
taxable income.  See Note 2.  The maximum payments are fiscal 2003, including $3.1 million paid to O'Sullivan
Holdings pursuant to the tax sharing agreement in the three months ended September 30, 2002 - $11.0 million; fiscal
2004 - $9.9 million; fiscal 2005 - $10.5 million; fiscal 2006 - $11.3 million; and thereafter - $41.4 million.

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

Overview

         We are a leading ready-to-assemble furniture manufacturer in North America with over 45 years of
experience.  We design, manufacture and distribute a broad range of RTA furniture products--computer
workcenters, desks, entertainment centers, audio stands, bookcases and cabinets--with retail prices ranging from $20
to $999.  We have committed substantial resources to the development and implementation of a diversified sales,
marketing and product strategy in order to capitalize on opportunities presented by large retail channels of
distribution and changes in consumer demographics and preferences.  We have structured our business to offer a
wide variety of RTA furniture products through popular retail distribution channels, including office superstores,
discount mass merchants, electronic superstores, home improvement centers and home furnishings retailers.  We
continue to strive towards building long-term relationships with quality retailers in existing and emerging high
growth distribution channels to develop and sustain our future growth.

         After several years of robust growth, the North American RTA furniture industry stalled in 2001.  Our sales
declined 11.5% in fiscal 2001 and 2.7% in fiscal 2002.  This decline continued in the first quarter of fiscal 2003,
when our sales declined 12.9%.  Our sales declined for several reasons:

        o         the lack of growth in sales of personal computers, which reduced the need for computer desks and
                  workcenters;

        o         the slowdown of economic growth and consumer spending in the United States, particularly in the
                  office superstore channel;

        o         liquidations and bankruptcies by a number of customers, including Montgomery Ward, Ames and
                  Kmart;

        o         inventory reductions by our customers;

        o         the decline in price of the average unit sold, reflecting a trend toward more promotional
                  merchandise and increased competition;

        o         increasing competition from imported furniture, particularly from China; and

        o         the retrenchment in business capital outlays, which reduced purchases of office furniture.

These factors will continue to affect our business throughout the remainder of fiscal 2003.

         As a result of the lower sales levels, coupled with the revised accounting for the tax sharing agreement, our
net income was $2.2 million for the first quarter of fiscal 2003 compared to a net loss of $1.0 million for the first
quarter of fiscal 2002.  Even with the lower sales level, we were able to increase our operating income to $8.0
million in the first quarter of fiscal 2003 from $6.4 million in the first quarter of fiscal 2002.  Our earnings before
interest, taxes, depreciation and amortization also increased to $11.2 million in fiscal 2003 from $9.8 million in the

                                                        14




same period of fiscal 2002 due principally to lower raw material prices and reduced selling and administrative
expenses.

          We purchase large quantities of raw materials, including particleboard and fiberboard.  We are dependent
on our outside suppliers for all of our raw materials.  Therefore, we are subject to changes in the prices charged by
our suppliers.  In fiscal 2000, our operating income was reduced by price increases for these commodities.  In fiscal
2001, particleboard and fiberboard prices declined, increasing our operating income in the latter portion of the year.
Industry pricing for particleboard was flat to slightly lower in fiscal 2002, and prices  declined slightly in the first
quarter of fiscal 2003 from the fourth quarter of fiscal 2002.  Prices for fiberboard increased in the fourth quarter of
fiscal 2002, but remained flat for the first quarter of fiscal 2003.  We did, however, experience a price increase from
several suppliers of another commodity in the second quarter of fiscal 2003.  We cannot assure you that raw material
prices will not increase in the future.  If the demand for particleboard increases, prices may rise in 2003.

         Several manufacturers, including O'Sullivan, have excess manufacturing capacity due to the current decline
in sales in the RTA furniture segment and increasing imports.  This excess capacity is causing increased competition
that is expected to continue, and perhaps to intensify, through the remainder of fiscal 2003.  This adversely affected
our margins and results of operations in fiscal 2002, and is continuing to affect sales, margins and results of
operations in fiscal 2003.

         While we have confidence in the long-term future of the RTA furniture industry, sales in the second quarter
of fiscal 2003 are anticipated to be the same as or slightly lower than sales in the second quarter of fiscal 2002.  We
anticipate our operating earnings and EBITDA will be slightly higher than those reported for the second quarter of
fiscal 2002.  We cannot yet predict when our sales will return to a pattern of sales growth.

RadioShack Arbitration and Revised Accounting for Tax Sharing Agreement with RadioShack

         In 1994, RadioShack, then Tandy Corporation, completed an initial public offering of O'Sullivan Holdings.
In connection with the offering, O'Sullivan Holdings entered into a tax sharing and tax benefit reimbursement
agreement with RadioShack.  RadioShack and O'Sullivan Holdings made elections under Sections 338(g) and
338(h)(10) of the Internal Revenue Code with the effect that the tax basis of our assets was increased to the deemed
purchase price of the assets, and an equal amount of such increase was included as taxable income in the
consolidated federal tax return of RadioShack.  The result was that the tax basis of our assets exceeded the historical
book basis we used for financial reporting purposes.

         The increased tax basis of our assets results in increased tax deductions and, accordingly, reduced our
taxable income or increased our net operating loss.  Under the tax sharing agreement, O'Sullivan Holdings is
contractually obligated to pay RadioShack nearly all of the federal tax benefit expected to be realized with respect to
such additional basis.  The payments under the agreement represent additional consideration for the stock of
O'Sullivan Industries, Inc. and further increase the tax basis of our assets from the 1994 initial public offering when
payments are made to RadioShack.

         To the extent the benefit of these basis step-up deductions caused us to have a federal taxable loss,
O'Sullivan Holdings was only obligated to pay RadioShack to the extent that the benefits were used to reduce
taxable income to zero.  Any additional tax deductions resulting from the step-up create a net operating loss ("NOL")
carryforward on our federal income tax return.  Under the terms of the tax sharing agreement, if we utilized this NOL
carryforward to generate future tax savings, O'Sullivan Holdings was also obligated to remit that benefit received to
RadioShack.

         Since 1994, we have treated the amount due to RadioShack by O'Sullivan Holdings as income tax expense
when such amounts become payable and to the extent that O'Sullivan Holdings had sufficient consolidated taxable
income.  Thus, our tax expense approximated what it would have been in the absence of the Section 338(h)(10) step-
up in basis and the tax sharing agreement.


                                                        15




         Under this accounting method, the deferred tax asset from both the step-up in basis and the future liability
of O'Sullivan Holdings to RadioShack were not recorded on our consolidated balance sheets because we deemed the
benefits to be an asset of RadioShack.  When the tax benefits were received and paid by O'Sullivan Holdings to
RadioShack, we funded the payment and recorded it as tax expense since this amount would have been paid as
federal income taxes in the absence of the step-up in basis and the tax sharing agreement.

         In November 1999, O'Sullivan Holdings completed a leveraged recapitalization transaction which
significantly increased our debt.  As a result of the higher debt levels, we also experienced increased interest
expense, which reduced our taxable income and also reduced the tax benefits used from the deductions arising from
the step-up in basis.  O'Sullivan Holdings reduced its payments to RadioShack accordingly.  RadioShack claimed
that the deductions arising from the increased interest payments should not impact tax benefit payments due
RadioShack under the tax agreement.  RadioShack pursued this matter and prevailed in an arbitration ruling in
March 2002.  O'Sullivan Holdings reached a settlement agreement with RadioShack in May 2002.  Pursuant to the
settlement agreement, O'Sullivan Holdings paid RadioShack $24.6 million in May 2002 and an additional
$3.1 million in June 2002.  The sum of these two payments ($27.7 million) represented the amount due RadioShack
under the settlement agreement through June 30, 2002.  These amounts represent the calculation of what benefits we
would have realized had we not had the additional interest expense from the recapitalization and merger.  The
settlement agreement requires calculations into the future and quarterly payments to RadioShack if our taxable
income adjusted for the additional interest expense shows that we would have realized the benefits had we not
incurred the additional interest expense.  If on this basis, we could have used the deductions from the step-up in
basis, O'Sullivan Holdings is required to make a payment to RadioShack even though we may not be receiving any
current tax benefit from these deductions on our federal income tax return.

         Following the decision in the arbitration and the settlement agreement with RadioShack, we recorded the
$24.6 million paid by O'Sullivan Holdings to RadioShack as a deferred tax asset at March 31, 2002.  We believed
that this was appropriate as the payment by O'Sullivan Holdings represented the tax benefit we could realize from
future use of net operating losses on our federal income tax return if we had sufficient taxable income in the future.
After recording a tax provision of $3.4 million for the quarter ended March 31, 2002 and offsetting our deferred tax
liabilities of $10.2 million, we had a net deferred tax asset of $11.0 million.

         Under SFAS 109, we must determine if it is more likely than not that we will realize the net deferred tax
asset as a reduction in our tax liabilities in the future.  SFAS 109 requires objective evidence to support the more
likely than not conclusion.  The arbitration decision dramatically affected our liquidity, which reduced the amounts
we could invest in sales efforts or cost improvements, as most free cash flow would now be used for O'Sullivan
Holdings' payments to RadioShack or to repay our indebtedness.  In addition, it became evident to us by March
2002 that the prolonged economic slowdown that started prior to September 11, 2001 was continuing.  This, coupled
with the adverse effect on our liquidity of the settlement, caused us to lower our projections of future taxable income.
Accordingly, we projected our expected future taxable income utilizing operating performance we achieved in fiscal
2002 assuming our performance would be no better or worse over an extended period of time.  Such projections
indicate that we would not have taxable income until 2009 when substantially all the tax benefit deductions had been
taken.  At that point, the projections indicated that our net operating losses existing at that time would be utilized
before they expire.  However, we currently have and expect to have taxable losses for a number of years in the
future.  Projections over a long time are inherently uncertain, and we cannot provide objective evidence that our
operations in 2009 and beyond will produce sufficient taxable income.  As a result, we provided a valuation
allowance in our March 2002 quarter of $11.0 million against all of our net deferred tax assets with a corresponding
charge to income tax expense.  Consistent with our prior accounting, both before and after the recapitalization and
merger, we did not record any deferred tax assets related to future deductions from the step-up in basis or any future
obligations to O'Sullivan Holdings related to the tax sharing agreement as they were still contingent upon our taxable
income in the future.

         Similarly, in our June, September and December 2002 financial statements, we accounted for each of
O'Sullivan Holdings' payments to RadioShack in the same manner as the initial $24.6 million payment under the
settlement agreement by recording a deferred tax asset to the extent that we could not benefit currently from the

                                                        16




increased deductions.  We then provided a valuation allowance against the additional deferred tax asset with a
corresponding charge to income tax expense on a quarter by quarter basis.  We believed this method was in
conformity with accounting principles generally accepted in the United States and consistent with our accounting for
the tax sharing agreement since 1994.

         In the third quarter of fiscal 2003, O'Sullivan received a comment letter from the staff of the SEC on the
accounting for the tax sharing agreement.  In the course of preparing our response to the SEC staff's comment letter,
we, in consultation with our independent accountants, reassessed our accounting for the tax sharing agreement in
light of the arbitration settlement between O'Sullivan Holdings and RadioShack and concluded that our method of
accounting for the tax sharing agreement should be changed.  O'Sullivan determined that the deferred tax asset
created by the step-up in basis and the additional basis from the probable future payments should be recorded as of
February 1994.  At the same time, we recorded a payable to parent equal to O'Sullivan Holdings' obligation to
RadioShack.  The amounts of the deferred tax asset and obligation to O'Sullivan Holdings were each $147.9 million
at February 1994.  From 1994 through 2001, we reduced the amount of the deferred tax asset and our payable to
O'Sullivan Holdings as we realized the benefits of the deferred tax asset and O'Sullivan Holdings paid RadioShack
amounts due under the tax sharing agreement.

         At March 31, 2002, a full valuation allowance was provided against the $95.5 million net deferred tax asset,
which consists of the $11.0 million valuation allowance originally recorded in the March 2002 quarter plus an
additional $84.5 million representing the balance of the deferred tax asset at that time. The valuation allowance at
June 30, 2002 of $94.3 million together with the $4.4 million tax provision for the fiscal year represent the
$98.7 million recorded as tax expense for the year ended June 30, 2002.  We recorded the valuation allowance
because we were unable to determine, based on objective evidence, that it was more likely than not we would be able
to utilize our net operating losses prior to their expiration.   If at a future date we determine that some or all of the
deferred tax asset will more likely than not be realized, we will reverse the appropriate portion of the valuation
allowance and credit income tax expense.

         O'Sullivan Holdings' remaining maximum obligation to RadioShack was $109.1 million at March 31,
2002.  The obligation was reduced by subsequent payments and was $78.3 million and $81.4 million at
September 30, 2002 and June 30, 2002, respectively.  O'Sullivan Holdings currently believes that it is probable that
future payments to RadioShack will be made.

         In summary, instead of accounting for our deferred tax asset resulting from the step-up in basis as tax
expense through a valuation allowance on a quarter by quarter basis as O'Sullivan Holdings makes payments to
RadioShack under the tax sharing agreement, we revised our accounting to record the aggregate deferred tax asset
and the obligation to O'Sullivan Holdings in February 1994.  Our deferred tax asset has been reduced as we realized
the benefits from 1994 to March 2002 and was fully offset by the March 2002 valuation allowance.  Therefore, this
revised method of accounting will increase our net income (or reduce our net loss) by the amount O'Sullivan
Holdings pays RadioShack for each quarterly period after March 31, 2002 through the quarter ending March 31,
2009 or until we can determine, based on objective evidence, that it is more likely than not that we will be able to
utilize our net operating losses prior to their expiration and reverse all or a portion of the valuation allowance on our
deferred tax assets.

         The expected timing or amounts of O'Sullivan Holdings' payments to RadioShack will not be affected by
the revised method of accounting, although the future payments to RadioShack are contingent upon O'Sullivan
Holdings achieving consolidated  taxable income calculated on the basis stipulated in the settlement agreement.

         We funded the back payment to O'Sullivan Holdings and subsequent payments from cash on hand.  We
expect to fund future payments from cash flows from operating activities, cash on hand or borrowings under our
senior credit facility.   Payments under the tax sharing agreement for fiscal 2003 are expected to be about
$11.0 million.


                                                        17




         We have amended our senior credit facility as a result of the arbitration settlement.  The amendment
excludes from the definition of consolidated fixed charges $27.0 million of the total paid by us pursuant to the tax
sharing agreement through the period ended June 30, 2002.

         See "Cautionary Statement Regarding Forward Looking Information."

Results of Operations

         Net Sales.  Net sales for the quarter ended September 30, 2002 decreased by $10.6 million, or 12.9%, to
$71.6 million from $82.2 million for the quarter ended September 30, 2001.  During the quarter, sales declined in
every major sales channel as the economic weakness in the United States continued.

         In January 2002, Kmart Corporation, which accounted for around 9% of our gross sales in fiscal 2002, filed
for Chapter 11 bankruptcy court protection.  As part of its reorganization, Kmart has closed 283 stores and has
secured financing of $2 billion to help the company's cash flow while it restructures.  Kmart hopes to emerge from
Chapter 11 in 2003.  We resumed shipments to Kmart on a post-petition basis after the filing and anticipate
significant sales to Kmart in the future.  However, there can be no assurance that we will ship as much to Kmart as
we did in prior periods or that Kmart will be successful in its restructuring efforts.

         In August 2002, Ames Department Stores, Inc. decided to close all of its stores and liquidate.  We had
anticipated sales to Ames would be less than 2% of our gross sales in fiscal 2003.

         Gross Profit.  Gross profit decreased to $20.0 million, or 27.9% of sales, for the three month period ended
September 30, 2002, from $20.5 million, or 24.9% of sales, for the comparable prior year quarter.  Fiscal 2003 first
quarter gross profit dollars declined because of lower sales.  The gross margin percentage increased primarily
because of lower material costs, particularly for particleboard, as compared to prices in the same period in fiscal
2002.

         Selling, Marketing and Administrative Expenses.  Selling, marketing and administrative expenses decreased
to $12.0 million, or 16.8% of sales, for the three month period ended September 30, 2002, from $14.1 million, or
17.2% of sales, for the quarter ended September 30, 2001.  In fiscal 2003, incentive compensation and profit sharing
expenses decreased because of our lower sales and financial performance.  Legal fees increased costs in fiscal 2002
due to the RadioShack arbitration.  Freight out, commissions and store display expense were also lower in fiscal
2003 compared to the prior year.

         Depreciation and Amortization.  Depreciation and amortization expenses decreased to $3.3 million for the
first quarter of fiscal 2003 compared to $3.4 million for the first quarter of fiscal 2002.

         Operating Income.  Operating income increased $1.6 million to $8.0 million for the quarter ended
September 30, 2002 from $6.4 million in the quarter ended September 30, 2001.  Lower material prices were
partially offset by lower sales in the three months ended September 30, 2002.  Reduced incentive compensation and
profit sharing expense as well as lower freight out expense, commission costs and store display expense contributed
to the increased operating income during the quarter.

         Net Interest Expense.  Net interest expense decreased from $7.9 million in the first quarter of fiscal 2002 to
$5.7 million in the first quarter of fiscal 2003.  Interest expense decreased due to the change in fair value of our
interest rate collar as well as our repayment of debt and lower variable interest rates on a portion of our debt.  The
following table describes the components of net interest expense.


                                                        18





                                                        Three months ended
                                                           September 30,
                                                    ---------------------------
                                                          (in thousands)
                                                         2002           2001
                                                      ----------     ----------
Interest expense on senior credit facility,
    industrial revenue bonds and senior
    subordinated notes                               $     5,876   $      6,342
Interest income                                              (52)           (85)
           Non-cash items:
Interest rate collar                                        (584)         1,201
Amortization of debt discount                                 90             80
Amortization of loan fees                                    393            393
                                                      ----------     ----------
Net interest expense                                 $     5,723   $      7,931
                                                      ==========     ==========

         Income Tax Provision (Benefit).  We recorded no tax expense for the first quarter of fiscal 2003 because of
the valuation allowance we recorded in the quarter ended March 31, 2002.  See "RadioShack Arbitration and
Revised Accounting for Tax Sharing Agreement with RadioShack".

         Net Income (Loss).  Our net income was $2.2 million in the first quarter of fiscal 2003 compared to a net
loss of $1.0 million in the first quarter of fiscal 2002 due to decreased tax expense, lower raw material costs,
decreased selling and administrative expenses and lower interest expense.

         EBITDA.  EBITDA, which we define as earnings before interest income and interest expense, income taxes,
depreciation and amortization, increased by $1.4 million to $11.2 million for the quarter ended September 30, 2002
from $9.8 million for the prior year quarter.  EBITDA for the fiscal 2003 first quarter increased primarily due to
lower material costs and lower selling and administrative expenses, partially offset by lower sales.

         EBITDA is presented to provide additional information about our operations.  This item should be
considered in addition to, but not as a substitute for or superior to, operating income, net income, operating cash flow
and other measures of financial performance prepared in accordance with generally accepted accounting principles.
EBITDA may differ in the method of calculation from similarly titled measures used by other companies.  EBITDA
provides another measure of  the operations of our business prior to the impact of interest, taxes and depreciation and
of our liquidity.  Further, EBITDA is a common method of valuing companies such as O'Sullivan, and EBITDA,
with adjustments, is a component of each of the financial covenants in our senior credit facility.

         The following table reconciles net income (loss) to EBITDA for the three months ended September 30,
2002 and 2001.


                                                  Three months ended
                                                     September 30,
                                             -----------------------------
                                                    (in thousands)
                                                    2002           2001
                                                 -----------    ----------
Net income (loss)                               $      2,252   $    (1,021)
Income tax provision (benefit)                             -          (550)
Interest expense, net                                  5,723         7,931
                                                 -----------    ----------
Operating income                                       7,975         6,360
Depreciation and amortization                          3,264         3,421
                                                 -----------    ----------
EBITDA                                          $     11,239   $     9,781
                                                 ===========    ==========



                                                        19




Liquidity and Capital Resources

         Our primary sources of liquidity are cash flows from operations and borrowings under our senior secured
credit facility, which is discussed below.  Our liquidity requirements will be to pay our debt, including interest
expense under the senior credit facility and notes, to pay RadioShack amounts due under the tax sharing agreement
and to provide for working capital and capital expenditures.  Decreased demand for our products could decrease our
cash flow from operations and the availability of borrowings under our credit facility.

         Working Capital.  As of September 30, 2002, cash and cash equivalents totaled $13.3 million.  Net working
capital was $49.2 million at September 30, 2002 compared to $51.6 million at June 30, 2002.

         Operating Activities.  Net cash used by operating activities for the three months ended September 30, 2002
was $289,000 compared to net cash provided of $16.1 million for the three months ended September 30, 2001.  Cash
flow from operations decreased year-over-year for the following reasons.

     o     During the first quarter of fiscal 2002, accounts payable increased $5.9 million from unusually low levels
           on June 30, 2001 when production was shut down for two weeks.  Accounts payable increased
           $1.0 million during the first quarter of fiscal 2003 due to a shutdown of only one week.  Accounts payable
           balances at September 30, 2002 are lower than the balances at September 30, 2001 because of lower
           production levels this year and the timing of a large purchase last year.

     o     Profit sharing and incentive compensation payments during the first quarter of fiscal 2003 were
           approximately $3.0 million higher than in the first quarter of fiscal 2002 because of the respective prior
           year financial results.  Changes in the accrued balances for profit sharing and incentive compensation
           decreased the cash provided by operations an additional $1.1 million.

     o     Increases in accrued advertising provided net cash of $1.2 million in fiscal 2003 compared to $3.9 million
           during the first quarter of fiscal 2002.  The decrease this year was due to lower sales and associated
           decreases in vendor incentive programs.  Cash payments were also accelerated for a particular customer
           that changed its pattern of claiming certain incentives.

     o     In fiscal 2003, increases in inventories absorbed $4.6 million of cash, compared with only $653,000 in
           fiscal 2002.

     o     During the September 2002 quarter, we provided O'Sullivan Holdings $3.1 million to enable it to satisfy
           its obligation under the tax sharing agreement.

     o     In fiscal 2003, the liability associated with the interest rate collar declined by $584,000 as opposed to a
           $1.2 million increase in fiscal 2002.

     o     Trade receivables declined $2.8 million in fiscal 2003 as opposed to a $169,000 increase in fiscal 2002.
           The decline was due to lower sales in fiscal 2003 and shorter terms.

         Investing Activities.  We invested $1.6 million for capital expenditures for the three months ended
September 30, 2002 compared to $4.1 million for the prior year three month period.  We currently estimate that the
total capital expenditure requirements for the remainder of the fiscal year will be approximately $5.0 to $8.0 million,
which we expect to fund from cash flow from operations or cash on hand.  Our ability to make future capital
expenditures is subject to certain restrictions under our senior credit facility.



                                                        20




         Financing Activities.  On November 30, 1999 we completed our merger and recapitalization.  Our
consolidated indebtedness at September 30, 2002 was $221.6 million consisting of:

     o   $111.6 million in a senior secured credit facility consisting of a five year $24.6 million term loan A, a seven
         and one-half year $87.0 million term loan B and a $40.0 million revolving line of credit, with no
         borrowings at September 30, 2002.  The current portion of these term loans was approximately $8.5 million
         at September 30, 2002.  The revolving line of credit has a $15.0 million sub-limit for letters of credit, of
         which we are currently utilizing approximately $13.9 million.

     o   $100.0 million in 13-3/8% senior subordinated notes due 2009 issued with warrants to purchase 6.0% of
         our common and Series B junior preferred stock on a fully diluted basis.  These warrants were assigned a
         value of $3.5 million.  These notes were issued at a price of 98.046% providing $98.0 million in cash
         proceeds before expenses related to the issuance.

     o   $10.0 million in variable rate industrial revenue bonds.

The reconciliation of consolidated indebtedness to recorded book value at September 30, 2002 is as follows:


                               onsolidated                    Original
                               ndebtedness                     Issue
                                                              Discount       Warrants
                              C                Current         Net of          Net of        Recorded
                              I                Portion       Accretion       Accretion      Book Value
                              -------------  -----------   --------------  -------------   ------------
                                                           (in thousands)
                                             ---           ---             --              --

                                             ---           ---             --              --
Term loan A                   $      24,583    $ (6,572)     $          -   $          -    $    18,011
Term loan B                          87,063      (1,923)                -              -         85,140
                                -----------     --------      -----------    -----------     ----------
Senior secured credit               111,646      (8,495)                -              -        103,151
Senior subordinated note            100,000            -      (1,633)            (2,926)         95,441
Industrial revenue bonds             10,000            -                -              -         10,000
                                -----------     --------      -----------    -----------     ----------
Total                         $     221,646    $ (8,495)     $(1,633)       $    (2,926)    $   208,592
                                ===========     ========      ===========    ===========     ==========

         During the three months ended September 30, 2002, we made regularly scheduled principal payments of
$886,000 against the term loans included in our senior secured credit facility.  We expect to fund principal and
interest payments on our debt from cash flow from operations, cash on hand or borrowings under our revolver.  Our
borrowing availability under our credit facility was approximately $21.4 million at September 30, 2002.  Decreased
demand for our products could decrease our cash flow from operations and the availability of borrowings under our
credit facility.  In October 2002, we paid an additional $4.1 million of principal on the amounts outstanding under
the senior credit facility and increased the revolving credit line borrowings by $4.1 million.

         The credit facility and notes are subject to certain financial and operational covenants and other restrictions,
including among others, requirements to maintain certain financial ratios and restrictions on our ability to incur
additional indebtedness.  The financial covenants contained in the credit facility, as amended, are as follows:

     o   Our consolidated leverage ratio must be less than 4.35.  The ratio at September 30, 2002 was 3.87.  At June
         30, 2003, our consolidated leverage ratio must be less than 4.00.

     o   Our consolidated interest coverage ratio must be greater than 2.00.  The ratio at September 30, 2002 was
         2.26.  At June 30, 2003, our consolidated interest coverage ratio must be greater than 2.00.

     o   Our consolidated fixed charge coverage ratio must be greater than 1.10.  The  ratio at September 30, 2002
         was 1.57.  At June 30, 2003, our consolidated fixed charge coverage ratio must be greater than 1.10.

                                                        21




     o   Our senior debt coverage ratio must be less than 2.50.  The ratio at September 30, 2002 was 2.13.  At June
         30, 2003, our senior debt coverage ratio must be less than 2.35.

     o   Our consolidated EBITDA must be at least $53 million for the fiscal year ending June 30, 2003.

EBITDA and consolidated interest expense as defined in the credit facility for the twelve months ended
September 30, 2002 were $57.2 million and $25.3 million, respectively.  O'Sullivan Industries is the borrower under
the credit facility, so the covenants do not include the $19.8 million senior note of O'Sullivan Holdings or interest on
the note.  Pursuant to an amendment to our senior credit facility, $27.0 million of our payments to RadioShack under
the tax sharing agreement through the period ending June 30, 2002 are excluded from the definition of consolidated
fixed charges and thus from calculations of the consolidated fixed charge coverage ratio.

         In addition, the agreements effectively prohibit the payment of dividends on our stock.  At September 30,
2002, we were in compliance with all applicable debt covenants.

         As required under the senior credit facility, we hedged one-half of our term loans with an initial notional
amount of $67.5 million with a costless interest rate collar.  The collar is based on three-month LIBOR with a floor
of 6.43% and a ceiling of 8.75%.  To terminate this contract at September 30, 2002, we would have been required to
pay the counter-party approximately $1.5 million.  The counter-party to our interest rate collar provides us with the
payment amount that would be required to terminate the collar as of the end of each quarter.  We recorded the
change in fair value of the collar as increased or decreased interest expense in the consolidated statements of
operations and included the resulting liability in accrued liabilities on the consolidated balance sheets.

         See the overview section of this Management's Discussion and Analysis of Financial Condition and Results
of Operations for a discussion of the impact of the Settlement Agreement with RadioShack on our liquidity and
financial condition.

         The following table illustrates our contractual obligations due in the future:


                                                                           Payments Due by Period
                                                       ---------------------------------------------------------------
                                                                               (in thousands)
                                                           Less
                                                          than 12           12-36            36-60           After
       Contractual Obligations            Total           months            months          months          60 months
-------------------------------------  -----------     ------------      ------------     -----------     ------------
Long-term debt                       $     221,646   $        8,495    $       19,762   $      83,389   $      110,000
Tax benefit payments to
RadioShack(1)                               78,277           10,337            20,770          24,116           23,054
Capital lease obligations                        -                -                 -               -                -
Operating leases--unconditional               4,534            1,479             2,666             389                -
Other long-term obligations                    676              268               394              14                -
                                       -----------     ------------      ------------     -----------     ------------
Total contractual cash obligations   $     305,133   $       20,579    $       43,592   $     107,908   $      133,054
                                       ===========     ============      ============     ===========     ============

--------------------------------------------

(1) The timing and amounts of payments to RadioShack are contingent on actual taxable income adjusted to
exclude the increased interest expense arising from the recapitalization and merger. The amounts in the table above
represent the maximum amounts payable to RadioShack.

                                       ===========     ============      ============     ===========     ============

Critical Accounting Policies and Estimates

         Our discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States.  The preparation of these financial statements requires us to make estimates and

                                                        22




judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities.

         On an on-going basis, we evaluate our estimates, including those related to customer programs and
incentives, bad debts, inventories, intangible assets, income taxes, restructuring, asset impairments, contingencies
and litigation.  We base our estimates on historical experience and on various other assumptions that we believe are
reasonable under the circumstances.  The results of these estimates form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ
from these estimates under different assumptions or conditions.

         We believe the following critical accounting policies affect our more significant judgments and estimates
used in the preparation of our consolidated financial statements.

     o       We derive our revenue from product sales.  We recognize revenue from the sale of products when
             persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed and
             determinable and collection of the resulting receivable is reasonably assured.  For all sales, we use
             purchase orders from the customer, whether oral, written or electronically transmitted, as evidence that a
             sales arrangement exists.  Generally, delivery occurs when product is delivered to a common carrier or
             private carrier, with standard terms being FOB shipping point.  We assess whether the price is fixed and
             determinable based upon the payment terms associated with the transaction.  We assess collection based
             on a number of factors, including past transaction history with the customer and the creditworthiness of
             the customer.  Collateral is not requested from the customers.

     o       We record estimated reductions to revenue for customer programs and incentive offerings including
             special pricing agreements, price protection, promotions and other volume-based incentives.  Market
             conditions could require us to take actions to increase customer incentive offerings.  These offerings
             could result in our estimates being too small and reduce our revenues when the incentive is offered.

     o       We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our
             customers to make required payments.  If the financial condition of our customers were to deteriorate,
             resulting in an impairment of their ability to make payments, additional allowances may be required.

     o       We write down our inventory for estimated obsolescence or unmarketable inventory equal to the
             difference between the cost of inventory and its estimated market value based upon assumptions about
             future demand and market conditions.  If actual market conditions are less favorable than those
             projected by us, additional inventory write-downs may be required.  Obsolete and slow-moving
             inventory reserves were approximately $5.8 million and $4.9 million at September 30, 2002 and 2001,
             respectively.

     o       We record our deferred tax assets at the amount that the asset is more likely than not to be realized.
             While we have considered future taxable income and ongoing prudent and feasible tax planning
             strategies in assessing the need for a valuation allowance, our determinations can change.  If we
             objectively determine it was more likely than not we would be able to realize our deferred tax assets in
             the future in excess of our recorded amount, we would reduce our valuation allowance, increasing
             income in the period such determination was made.  Likewise, should we determine that we would not
             be able to realize all or part of our recorded gross deferred tax assets in the future, we would increase
             our valuation allowance, decreasing income in the period such determination was made.

     o       We periodically review our long-lived assets, including property and equipment, for impairment and
             determine whether an event or change in facts and circumstances indicates their carrying amount may
             not be recoverable.  We determine recoverability of the assets by comparing the carrying amount of the
             assets to the net future undiscounted cash flows expected to be generated by those assets.  If the sum of

                                                        23




             the undiscounted cash flows is less than the carrying value of the assets, an impairment charge is
             recognized.  Adverse economic conditions could cause us to record impairment charges in the future.

     o       We assess goodwill regularly for impairment by applying a fair-value-based test, using the enterprise as
             the reporting unit.  If the book value of the reporting unit is below the fair value of the reporting unit
             there is no impairment loss.  Adverse economic conditions could cause us to record impairment charges
             in the future.

     o       In the second quarter of fiscal 2001, we recorded asset impairment charges, employee termination
             benefits and other exit costs totaling $10.5 million related to a business restructuring plan to reduce
             production capacity and operating expenses.  The restructuring plan included closing our Cedar City,
             Utah facility and a reduction in our staff at our Lamar, Missouri facility.  The asset impairment charges
             related to land, building and equipment located in Cedar City, Utah.  The land and building and a
             limited amount of equipment are still for sale.  If market conditions deteriorate further, additional write-
             downs on the land, building and equipment may be necessary.

Cautionary Statement Regarding Forward Looking Information

         Certain portions of this Report, and particularly the Notes to the Consolidated Financial Statements and the
Management's Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking
statements.  These statements can be identified by the use of future tense or dates or terms such as "believe,"
"would," "expect,"  "anticipate" or "plan."  These forward-looking statements involve risks and uncertainties.  Actual
results may differ materially from those predicted by the forward-looking statements.  Factors and possible events
which could cause results to differ include:

        o     loss of liquidity due to the arbitration panel's opinion in RadioShack Corporation v. O'Sullivan
              Industries Holdings, Inc.;
        o     significant indebtedness that may limit our financial and operational flexibility;
        o     changes from anticipated levels of sales, whether due to future national or regional economic and
              competitive conditions, including new domestic or foreign entrants into the industry, customer
              acceptance of existing and new products, terrorist attacks or otherwise, as we are experiencing now;
        o     pricing pressures due to excess capacity in the ready-to-assemble furniture industry, as occurred in
              1995 and is occurring again now, or customer demand in excess of our ability to supply product;
        o     raw material cost increases, particularly in particleboard and fiberboard, as occurred in 1994 and 1995
              and to a lesser extent in fiscal 2000;
        o     transportation cost increases, due to higher fuel costs or otherwise;
        o     loss of or reduced sales to significant customers as a result of bankruptcy, liquidation, merger,
              acquisition or any other reason, as occurred with the liquidation of Montgomery Ward in fiscal 2001,
              the liquidation of Ames in 2002 and with the reorganization of Service Merchandise Co., Inc. in 2000;
        o     actions of current or new competitors, foreign or domestic, that increase competition with our products
              or prices;
        o     the consolidation of manufacturers in the ready-to-assemble furniture industry;
        o     increased advertising costs associated with promotional efforts;
        o     increased interest rates;
        o     pending or new litigation or governmental regulations such as the recently settled arbitration involving
              RadioShack;
        o     other uncertainties which are difficult to predict or beyond our control; and
        o     the risk that we incorrectly analyze these risks and forces, or that the strategies we develop to address
              them could be unsuccessful.

See also the Risk Factors section in our amended annual report on Form 10-K/A for the year ended June 30, 2002.


                                                        24




         Because these forward-looking statements involve risks and uncertainties, actual results may differ
significantly from those predicted in these forward-looking statements.  You should not place a lot of weight on these
statements.  These statements speak only as of the date of this document or, in the case of any document incorporated
by reference, the date of that document.

         All subsequent written and oral forward-looking statements attributable to O'Sullivan or any person acting
on our behalf are qualified by the cautionary statements in this section.  We will have no obligation to revise these
forward-looking statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Our market risk is impacted by changes in interest rates, foreign currency exchange rates and certain
commodity prices.  Pursuant to our policies, we may use natural hedging techniques and derivative financial
instruments to reduce the impact of adverse changes in market prices.  We do not hold or issue derivative
instruments for trading purposes.  A change in interest rates of one percentage point would affect our cash interest
expense by about $600,000 per year.

         We have market risk in interest rate exposure, primarily in the United States.  We manage interest rate
exposure through our mix of fixed and floating rate debt.  Interest rate swaps or collars may be used to adjust interest
rate exposures when appropriate based on market conditions.  For qualifying hedges, the interest differential of
swaps is included in interest expense.  We believe that our foreign exchange risk is not material.

         Due to the nature of our product lines, we have material sensitivity to some commodities, including
particleboard, fiberboard, corrugated cardboard and hardware.  We manage commodity price exposures primarily
through the duration and terms of our vendor contracts.  A one percent change in our raw material prices would
affect our cost of sales by approximately $1.7 million annually.

         As noted above, in fiscal 2000 we encountered price increases in certain commodities, which reduced our
gross margin.  During fiscal 2001, prices for these products declined, which helped gross margins.  Prices for these
and other commodities will continue to fluctuate.

ITEM 4.  CONTROLS AND PROCEDURES.

         O'Sullivan maintains disclosure controls and procedures (as defined in Rule 13a-14(c) of the Securities
Exchange Act of 1934) that are designed to ensure that information required to be disclosed in O'Sullivan's
Exchange Act reports is recorded, processed, summarized and reported accurately within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and communicated to O'Sullivan's Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosures.  In designing and evaluating the disclosure controls and procedures, management recognized that any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management was necessarily required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

         Within 90 days prior to the date of this report, O'Sullivan carried out an evaluation, under the supervision
and with the participation of O'Sullivan's management, including O'Sullivan's Chief Executive Officer and Chief
Financial Officer, of the effectiveness
of the design and operation of O'Sullivan's disclosure controls and procedures.  Based on the foregoing,
O'Sullivan's Chief Executive Officer and Chief Financial Officer concluded that O'Sullivan's disclosure controls
and procedures were effective.

         There have been no significant changes in O'Sullivan's internal controls or in other factors that could
significantly affect the internal controls subsequent to the date O'Sullivan completed its evaluation.  Therefore, no
corrective actions were taken.

                                                        25




                                          PART II --  OTHER  INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

         On September 24, 2002, Montgomery Ward, LLC, et al., Debtor in Possession, filed suit against O'Sullivan
in the United States Bankruptcy Court, District of Delaware, alleging that payments made by Montgomery Ward
within 90 days prior to its bankruptcy constituted preferential transfers under the Bankruptcy Code that should be
recovered from O'Sullivan by Montgomery Ward, together with interest.  The alleged payments aggregate $3.7
million.  We received the summons in this action on October 29, 2002.

         O'Sullivan plans to defend itself vigorously in this matter and is carefully reviewing its defenses.

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

         (a)      Exhibits:

         A list of exhibits required to be filed as part of this Report is set forth in the Index to Exhibits, which
immediately precedes such exhibits, and is incorporated herein by reference.

         (b)      Reports on Form 8-K:

                  none

                                                        26




                                                    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.




                                                                         O'SULLIVAN INDUSTRIES, INC.



Date:   September 9, 2003                                 By:                  /s/ Richard D. Davidson
                                                                 --------------------------------------------------

                                                                                 Richard D. Davidson
                                                                                    President and
                                                                               Chief Executive Officer


                                                        27




                                                   CERTIFICATION

         I, Richard D. Davidson, certify that:

1.       I have reviewed this amended quarterly report on Form 10-Q/A (Amendment No. 1) of O'Sullivan
Industries, Inc.;

2.       Based on my knowledge, this quarterly report, as amended, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, as amended, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)   designed such disclosure controls and procedures to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
         particularly during the period in which this quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
         days prior to the filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
         procedures based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent
function):

         a)   all significant deficiencies in the design or operation of internal controls which could adversely affect
         the registrant's ability to record, process, summarize and report financial data and have identified for the
         registrant's auditors any material weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or other employees who have a
         significant role in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.




Date:    September 9, 2003                                                     -----------------------------------------------------
         /s/ Richard D. Davidson
                                                                               Richard D. Davidson
                                                                      President and Chief Executive Officer

                                                        28




                                                   CERTIFICATION

         I, Phillip J. Pacey, certify that:

1.       I have reviewed this amended quarterly report on Form 10-Q/A (Amendment No. 1) of O'Sullivan
Industries, Inc.;

2.       Based on my knowledge, this quarterly report, as amended, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, as amended, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly report;

4.       The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)   designed such disclosure controls and procedures to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
         particularly during the period in which this quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
         days prior to the filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
         procedures based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent
function):

         a)   all significant deficiencies in the design or operation of internal controls which could adversely affect
         the registrant's ability to record, process, summarize and report financial data and have identified for the
         registrant's auditors any material weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or other employees who have a
         significant role in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this report whether or not there were
significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and
material weaknesses.




Date:    September 9, 2003                                    -----------------------------------------------------
         /s/ Phillip J. Pacey
                                                                                Phillip J. Pacey
                                                                           Senior Vice President and
                                                                             Chief Financial Officer

                                                        29



                                                 INDEX TO EXHIBITS


                                                                                                           Page
 Exhibit No.                                         Description                                            No.
  3.1 & 4.1   Certificate of Incorporation of O'Sullivan, as amended (incorporated by reference from
              Exhibit 3.1(a) to Registration Statement on Form S-4 (File No. 333-31282))

  3.2 & 4.2   Bylaws of O'Sullivan (incorporated by reference from Exhibit 3.3 to Registration
              Statement on Form S-4 (File No. 333-31282))

     4.3      Indenture dated as of November 30, 1999, by O'Sullivan Industries, Inc., as Issuer,
              O'Sullivan Industries - Virginia, Inc., as Guarantor, and Norwest Bank Minnesota, National
              Association, as Trustee, relating to O'Sullivan Industries, Inc.'s $100,000,000 principal
              amount of 13.375% senior subordinated notes (incorporated by reference to Exhibit 4.4 to
              Quarterly Report on Form 10-Q for the quarter ended March 31, 1999
               (File No. 0-28493))

     4.4      Warrant Agreement dated as of November 30, 1999 between O'Sullivan Industries
              Holdings, Inc. and Norwest Bank Minnesota, National Association, as Warrant Agent,
              relating to warrants to purchase 39,273 shares of O'Sullivan Industries Holdings, Inc.
              Series B junior preferred stock, including form of warrant certificate (incorporated by
              reference to Exhibit 4.5 to Quarterly Report on Form 10-Q for the quarter ended March 31,
              1999 (File No. 0-28493))

     4.5      Warrant Agreement dated as of November 30, 1999 between O'Sullivan Industries
              Holdings, Inc. and Norwest Bank Minnesota, National Association, as Warrant Agent,
              relating to warrants to purchase 93,273 shares of O'Sullivan Industries Holdings, Inc.
              common stock, including form of warrant certificate (incorporated by reference to
              Exhibit 4.6 to Quarterly Report on Form 10-Q for the quarter ended December 31, 1999
              (File No. 0-28493))

     99.1     Certificate of chief executive officer under Section 906 of the Sarbanes-Oxley Act of 2002    33
     99.2     Certificate of chief financial officer under Section 906 of the Sarbanes-Oxley Act of 2002    34






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