<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended       December 28, 1997
                               -------------------------------------------------

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

For the transition period from                        to                        
                               ----------------------    -----------------------

Commission File Number:                          0-19912
                        --------------------------------------------------------

                           Signature Brands USA, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Delaware                              36-3635286
--------------------------------------------------------------------------------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification No.)

7005 Cochran Road, Glenwillow, Ohio                       44139-4312
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

                                 (440) 542-4000
--------------------------------------------------------------------------------
              (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 January 31, 1998, the issuer had 9,174,261 shares of common stock
outstanding.


<PAGE>   2




                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


                                   (Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

For the quarterly period ended       December 28, 1997
                               -------------------------------------------------

                                       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:               33-80000
                        --------------------------------------------------------

                             Signature Brands, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Ohio                                              36-3330781
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

7005 Cochran Road, Glenwillow, Ohio                             44139-4312
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

                                 (440) 542-4000
--------------------------------------------------------------------------------
              (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
                                                            ---       ---

         The Registrant is a wholly-owned subsidiary of Signature Brands USA,
Inc. Accordingly, none of its equity securities are owned by non-affiliates.




<PAGE>   3



                          PART 1. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS


                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>

                                                December 28       September 28
                                                   1997               1997
                                              ---------------     ------------
                                                (Unaudited)
<S>                                               <C>                    <C>
ASSETS

Current assets
   Cash                                           $  4,118               890
   Trade accounts receivable, net                   67,501            52,336
   Inventories                                      37,851            39,607
   Refundable income taxes                             497               497
   Deferred income taxes                             6,329             6,329
   Other current assets                              1,378             1,333
                                                  --------          --------
        Total current assets                       117,674           100,992

Property, plant and equipment, net                  16,820            17,598

Other assets
   Excess of cost over fair value
     of net assets acquired, net                   134,921           135,893
   Deferred financing costs, net                     4,084             3,723
   Other                                             1,579             1,504
                                                  --------          --------
        Total other assets                         140,584           141,120
                                                  --------          --------

        Total assets                              $275,078           259,710
                                                  ========          ========
</TABLE>



                                                                     (continued)





                                       3
<PAGE>   4







                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                      December 28   September 28
                                                         1997           1997
                                                      -----------   ------------
                                                     (Unaudited)
LIABILITIES AND
STOCKHOLDERS' EQUITY

<S>                                                    <C>               <C>  
Current liabilities
   Current portion of long-term debt                   $   5,000         8,750
   Accounts payable                                       21,849        21,004
   Accrued liabilities                                    29,645        22,217
                                                       ---------     ---------
        Total current liabilities                         56,494        51,971

Long-term debt
   Revolving Credit Facility                              40,100        33,700
   Term Note                                              55,000        51,508
   Senior Subordinated Notes                              68,960        68,904
                                                       ---------     ---------
        Total long-term debt                             164,060       154,112

Product liability                                          2,813         3,212
Other                                                      3,726         3,818
                                                       ---------     ---------
        Total liabilities                                227,093       213,113

Stockholders' equity
   Common stock, par value $.01 per share;
       authorized 20,000 shares; issued
       and outstanding 9,174 shares
       at December 28, 1997 and 9,082 shares
       at September 28, 1997                                  92            91
   Paid-in capital                                        52,099        51,937
   Warrants                                                1,773         1,773
   Accumulated deficit                                    (5,979)       (7,204)
                                                       ---------     ---------

        Total stockholders' equity                        47,985        46,597
                                                       ---------     ---------
        Total liabilities and stockholders' equity     $ 275,078       259,710
                                                       =========     =========
</TABLE>







(See accompanying notes to unaudited consolidated financial statements.)



                                       4
<PAGE>   5

                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>

                                                       Thirteen weeks ended
                                                   -----------------------------
                                                   December 28       December 29
                                                       1997             1996
                                                   -----------       -----------

<S>                                                  <C>                <C>   
Net sales                                            $ 90,365           87,136
Operating costs and expenses
    Cost of goods sold                                 63,388           61,077
    Selling, general and
      administrative expenses                          18,219           19,055
    Amortization of intangible assets                     972              984
                                                     --------         --------
        Total operating costs and expenses             82,579           81,116
                                                     --------         --------
        Operating income                                7,786            6,020

Interest expense                                        4,800            4,982
Other income                                              (76)            (189)
                                                     --------         --------
        Income before income taxes                      3,062            1,227
Income tax expense                                      1,837              736
                                                     --------         --------
        Net income                                   $  1,225              491
                                                     ========         ========



Basic and diluted net income per share               $   0.13             0.05
                                                     ========         ========
</TABLE>


(See accompanying notes to unaudited consolidated financial statements.)





                                       5
<PAGE>   6






                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          Thirteen weeks ended
                                                                      ---------------------------
                                                                      December 28     December 29
                                                                         1997             1996
                                                                      -----------     -----------
<S>                                                                    <C>                   <C>
Cash flows from operating activities
  Net income                                                           $  1,225              491
  Adjustments to reconcile net income to
     net cash used in operating activities
        Depreciation and amortization of plant and equipment              1,598            1,730
        Amortization of intangible assets                                   972              984
        Amortization of deferred financing costs                            214              214
        Accretion of debt discount                                           56               56
        Changes in
           Accounts receivable                                          (15,165)          (8,163)
           Inventories                                                    1,756             (410)
           Other assets                                                    (120)             271
           Accounts payable                                                 845             (140)
           Accrued liabilities                                            7,428            4,202
           Noncurrrent liabilities                                         (491)              22
                                                                       --------         --------
             Net cash used in operating activities                       (1,682)            (743)
                                                                       --------         --------

Cash flows from investing activities
    Capital expenditures                                                   (820)            (728)
                                                                       --------         --------
             Net cash used in investing activities                         (820)            (728)
                                                                       --------         --------

Cash flows from financing activities
    Proceeds from revolving credit facility                              32,100           19,900
    Repayments of revolving credit facility                             (25,700)         (15,600)
    Repayment of long-term debt                                          (1,250)          (1,250)
    Proceeds from Term Note                                                 992              -
    Proceeds from stock issuances under option plans and awards             163              -
    Payment of financing fees                                              (575)             -
                                                                       --------         --------
            Net cash provided by financing activities                     5,730            3,050
                                                                       --------         --------

Increase in cash                                                          3,228            1,579
Cash at the beginning of the period                                         890              736
                                                                       --------         --------
Cash at the end of the period                                          $  4,118            2,315
                                                                       ========         ========

Supplemental disclosures of cash flow information
Cash paid during the period for
    Interest                                                           $  2,251            2,375
    Income taxes                                                            -                415
</TABLE>

(See accompanying notes to unaudited consolidated financial statements.)




                                       6
<PAGE>   7



                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)


(1)      BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of the
         Company and its wholly owned subsidiary. All significant intercompany
         accounts and transactions are eliminated in consolidation.

         In the opinion of management, the information furnished herein includes
         all adjustments of a normal recurring nature that are necessary for a
         fair presentation of results for the interim periods shown in
         accordance with generally accepted accounting principles. The unaudited
         interim consolidated financial statements have been prepared using the
         same accounting principles that were used in preparation of the
         Company's annual report on Form 10-K for the year ended September 28,
         1997, and should be read in conjunction with the consolidated financial
         statements and notes thereto. Because of the seasonal nature of the
         small appliance and consumer scale industries, the results of
         operations for the interim period are not necessarily indicative of
         results for the full fiscal year.

(2)      INVENTORIES

         The components of inventories are as follows:

<TABLE>
<CAPTION>

                                                              December 28                September 28
                                                                  1997                        1997
                                                              -----------                -------------

<S>                                                             <C>                          <C>   
               Raw materials and purchased parts                $ 10,040                      11,233
               Finished goods                                     27,811                      28,374
                                                                --------                      ------

                                                                $ 37,851                      39,607
                                                                ========                      ======
</TABLE>

         Work-in-process inventories are not significant and are included with
raw materials.






                                       7
<PAGE>   8


                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)


     (3)  EARNINGS PER SHARE

         The Company adopted Statement of Financial Accounting Standards No.
         128, Earnings per Share ("SFAS No. 128"), in the quarter ended December
         28, 1997. SFAS No. 128 requires the Company to disclose two earnings
         per share amounts, basic and diluted. Basic earnings per share is based
         on net income available to common stockholders and weighted average
         common stock outstanding during the period. Diluted earnings per share
         includes the effect of all dilutive securities which are convertible to
         common stock of the Company such as stock options and warrants.

         Below is a table which reconciles basic earnings per share with diluted
         earnings per share for the thirteen weeks ended December 28, 1997 and
         December 29, 1996.

<TABLE>
<CAPTION>

                                                                                                       Per Share
                                                       Net Income                 Shares                Amounts
                                                 -----------------------   ---------------------  ---------------------
                                                   1997         1996         1997        1996       1997        1996
                                                 ----------   ----------   ---------   ---------  ---------   ---------

<S>                                              <C>           <C>          <C>         <C>       <C>        <C>   
          BASIC EARNINGS PER SHARE
          Net income available to
              common stockholders                 $ 1,225      $   491       9,109       9,081     $ 0.13     $ 0.05
                                                                                                  =========   =========

          EFFECT OF DILUTIVE SECURITIES (1)
          Stock Options                                -              -        298         268
                                                 ----------   ----------   ---------   ---------

          DILUTED EARNINGS PER SHARE              $ 1,225      $   491       9,407       9,349     $ 0.13     $ 0.05
                                                 ==========   ==========   =========   =========  =========   =========
</TABLE>




         (1)    The Company's outstanding warrants and certain outstanding stock
                options have not been included as they are currently
                antidilutive.




                                       8
<PAGE>   9


                    SIGNATURE BRANDS USA, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

 (4)     CONDENSED CONSOLIDATED FINANCIAL INFORMATION

         Condensed consolidated financial information for Signature Brands, Inc.
         at December 28, 1997 and September 28, 1997, and for the thirteen week
         periods ended December 28, 1997 and December 29, 1996 is as follows:

<TABLE>
<CAPTION>

                                                         December 28       September 28
                                                             1997              1997
                                                         -----------       ------------

<S>                                                       <C>                 <C>    
Current assets                                            $ 117,674           100,992
Noncurrent assets                                           157,404           158,718
                                                          ---------         ---------

        Total assets                                      $ 275,078           259,710
                                                          =========         =========


Current liabilities                                       $  56,494            51,971
Noncurrent liabilities                                      170,599           161,142
Intercompany payables                                        47,986            47,823
                                                          ---------         ---------

        Total liabilities                                   275,079           260,936

Stockholder's equity
   Common stock - $1.00 stated value;
      authorized 850 shares; issued and
      outstanding 100 shares                                    -                 -
   Paid-in capital                                            2,821             2,821
   Accumulated deficit                                       (2,822)           (4,047)
                                                          ---------         ---------

        Total stockholder's equity                               (1)           (1,226)
                                                          ---------         ---------

        Total liabilities and stockholder's equity        $ 275,078           259,710
                                                          =========         =========
</TABLE>

<TABLE>
<CAPTION>

                                                          Thirteen week period ended
                                                         ------------------------------
                                                         December 28       December 29
                                                             1997              1996
                                                         -----------       ------------

<S>                                                       <C>                  <C>   
Net sales                                                 $  90,365            87,136
Gross profit                                                 26,977            26,059
Net income                                                    1,225               491
</TABLE>



                                       9
<PAGE>   10


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


COMPANY OVERVIEW

                  Signature Brands USA, Inc. (the "Company") is a holding
company which, through its wholly owned subsidiary, Signature Brands, Inc.
("Signature Brands"), designs, manufactures, markets, and distributes a
comprehensive line of consumer and professional products. The Company's consumer
products, marketed under the Mr. Coffee(R), Health o meter(R), Counselor(R) and
Borg(R) brand names include automatic drip coffeemakers, iced and hot teamakers,
coffee filters, water filtration products, accessories and other kitchen
countertop appliances as well as bath, kitchen, and gourmet scales and
therapeutic devices. Professional products include the Pelouze(R) and Health o
meter(R) brands of office, foodservice and medical scales.

                  In fiscal 1998, the Company changed the classification of
certain sales to consumer product sales which previously were classified as
professional product sales. The fiscal 1997 amounts discussed below have been
restated to conform to the current period's presentation.

RESULTS OF OPERATIONS

Thirteen Weeks ended December 28, 1997 and December 29, 1996

                  Overview. Net sales in the first quarter of fiscal 1998
increased approximately 3.7 percent to $90.4 million, compared with $87.1
million for the same period in fiscal 1997. The Company's gross profit in the
first quarter of fiscal 1998 was $27.0 million, or approximately 29.9 percent of
net sales, compared with $26.1 million, or approximately 29.9 percent of net
sales in the same period in fiscal 1997.

Net Sales and Gross Profit
                  Consumer Products. In the first quarter of 1998, net sales of
consumer products were $81.1 million compared with $77.9 million in 1997, an
increase of 4.2 percent. The increase in net sales was primarily attributable to
significant improvements in sales of the Company's core products of coffeemakers
and bath scales somewhat offset by lower sales in other product lines, primarily
iced and hot teamakers and water filtration products. The improvement in
coffeemakers was due to increased unit volumes and favorable sales mix somewhat
offset by unfavorable pricing. Increased unit volumes partially offset by an
unfavorable shift in sales mix resulted in higher sales of bath scales. The
declines in sales of iced and hot teamakers and water filtration products were
due primarily to lower unit volumes. Gross profit for consumer products
increased 2.8 percent in the first quarter of 1998 to $23.7 million from $23.0
million in 1997. As a percent of net sales gross profit margin was 29.2 percent
in 1998, compared with 29.6 percent in 1997. An overall shift in sales mix away
from higher margin product lines such as iced and hot teamakers and coffee
filters to lower margin product lines such as coffeemakers and bath scales along
with continued competitive pricing across all 


                                       10
<PAGE>   11

product lines resulted in a decline in gross profit as a percent of net sales.
Somewhat offsetting these items were reductions in product costs. Historically,
gross margins on individual product lines have been greatest near the point of
introduction, gradually decreasing as the product matures and becomes subject to
pricing pressure. There continues to be intense pressure on retail prices and
there can be no assurance as to the Company's ability to achieve price increases
or maintain current price levels in the future. For these reasons, the Company
continues its efforts to introduce new products and to reduce the cost of
existing products as a means of protecting margins.

                  Professional Products. In the first quarter of 1998, net sales
of professional products were $9.3 million, comparable with the same period in
1997. Increased unit volumes and favorable sales mix in medical and office
products and higher unit volumes in commercial products were offset by decreased
international unit volumes and unfavorable pricing in the office and
international sales channels. Gross profit for professional products was $3.3
million, or 35.6 percent of net sales, in the first quarter of 1998, compared
with $3.0 million, or 32.7 percent of net sales, in 1997. The shift in sales mix
to higher margin medical and office products from lower margin international
sales resulted in improved gross profit as a percent of net sales. In addition,
improved product quality favorably impacted gross profit as a percent of net
sales as defective product costs were reduced. Somewhat offsetting these
favorable items were lower average selling prices.

                  Selling, General and Administrative Expenses. Selling,
general, and administrative expenses ("SG&A") for the first quarter of fiscal
1998 totalled $18.2 million, or approximately 20.2 percent of net sales,
compared with $19.1 million, or approximately 21.9 percent of net sales, for the
first quarter of fiscal 1997. The decrease in SG&A as a percentage of net sales
is primarily attributable to lower national advertising expenditures relating to
the hot teamaker and water filtration product lines somewhat offset by increased
bad debt expense due to retail customer bankruptcies and higher compensation
expenses.

                  Amortization of Intangible Assets. The amortization of
intangible assets relates primarily to intangible assets associated with the
acquisition by the Company of Mr. Coffee, inc. on August 17, 1994 ("the
Acquisition").

                  Interest Expense. Net interest expense for the first quarter
of fiscal 1998 was approximately $4.8 million, compared with $5.0 million for
the same period in the prior year.

                  Income Taxes. The effective tax rate was 60.0 percent for the
first quarter of fiscal 1998 and 1997. Expenses not deductible for tax purposes,
primarily the amortization of intangible assets associated with the acquisition,
resulted in an effective tax rate significantly higher than the statutory tax
rate in both periods.

                  Net Income. Based on the foregoing, the Company achieved net
income of approximately $1.2 million in the first quarter of fiscal 1998,
compared with approximately $0.5 million in the same period last year.


                                       11
<PAGE>   12


LIQUIDITY AND CAPITAL RESOURCES

                  The Company's primary sources of liquidity are internally
generated cash and borrowings under a Credit Agreement among Signature Brands
and a group of Banks represented by Banque Nationale de Paris ("BNP") as agent
and NBD Bank as documentation agent ("the Bank Credit Agreement") entered into
in connection with the Acquisition.

                  Cash flow activity for the first quarters of fiscal 1998 and
1997 is presented in the Consolidated Statements of Cash Flows. During the first
quarter of fiscal 1998, the Company required approximately $1.7 million in cash
flow to sustain its operating activities. Net income plus non-cash charges
generated approximately $4.1 million, while changes in working capital
components required approximately $5.8 million. The increase in accounts
receivable, which required approximately $15.2 million, is attributable to
seasonally higher sales activity. The decrease in inventories generated $1.8
million and is also attributable to seasonal factors. Accrued liabilities
increased due to higher seasonal accruals for advertising and promotional costs
and higher accrued interest generating $7.4 million.

                  The Company's business is somewhat seasonal, with a large
portion of its sales and earnings generated in the first fiscal quarter of the
year. During fiscal 1997, the Company generated approximately 32 percent of its
annual net sales in this quarter compared with 34 percent in fiscal 1996.

                  The Company's aggregate capital expenditures during the first
quarter of fiscal 1998 were approximately $0.8 million. The Company anticipates
making $6.2 million of capital expenditures for the remainder of fiscal 1998.
These capital expenditures relate primarily to new product tooling, information
systems and production equipment. Management plans to fund these capital
expenditures with available cash, cash flow from operations and, if necessary,
borrowings under the revolving credit facility provided under the Bank Credit
Agreement.

                  Indebtedness incurred in connection with the Acquisition has
significantly increased the Company's cash requirements and imposes various
restrictions on its operations. The Acquisition and related transactions were
financed with approximately $98 million in borrowings under the Bank Credit
Agreement, approximately $70 million in proceeds from a unit offering of 13
percent senior subordinated notes due 2002, (the "Notes") and warrants to
purchase shares of Common Stock at a price of $6.25 per share, and approximately
$17.2 million in net proceeds received from the exercise of certain transferable
rights to purchase 3,543,433 shares of Common Stock issued to the stockholders
of the Company. The Notes are generally not redeemable at the option of the
Company until August 15, 1999. For more detailed information, see the Company's
Annual Report on Form 10-K for the year ended September 28, 1997.

                  The Bank Credit Agreement includes a $55.0 million revolving
credit facility and a term loan facility, which is subject to amortization on a
quarterly basis in aggregate annual amounts of $5.0 million, $8.75 million,
$14.5 million and $33.0 million during fiscal 1998 through fiscal 2001,
respectively. A portion of the annual payment for fiscal 2001 may be accelerated
into fiscal 2000 if certain EBITDA levels are not achieved in fiscal 1999.
Signature 


                                       12
<PAGE>   13

Brands is required to make prepayments on the term loan and revolving credit
facility with a percentage of Excess Cash Flow (as defined) and 100 percent of
the proceeds from certain asset sales, issuances of debt and equity securities
and extraordinary items outside the ordinary course of business. There is no
required term loan prepayment for fiscal 1998. Signature Brands may also make
optional prepayments, in full or in part, on the term loan.

                  The Bank Credit Agreement and the indenture governing the
Notes contain various customary covenants which the Company was in compliance
with at December 28, 1997. Borrowing availability under the revolving credit
facility at December 28, 1997 was $14.2 million after considering outstanding
letters of credit of $0.7 million, actual borrowings of $40.1 million, and
sufficiency of collateral. Signature Brands' obligations under the Bank Credit
Agreement are secured by substantially all of Signature Brands' assets and a
pledge of all of its issued and outstanding common stock. Signature Brands'
obligations under the Bank Credit Agreement and the Notes are also guaranteed by
the Company.

                  Based upon current levels of operations, anticipated sales
growth and plans for expansion, management believes that the Company's cash flow
from operations (including favorable cost savings estimated to be achieved in
the future), combined with borrowings available under the Bank Credit Agreement,
will be sufficient to enable the Company to meet all of its cash operating
requirements over both the short term and the longer term, including scheduled
interest and principal payments, capital expenditures and working capital needs.
This expectation is predicated upon continued growth in revenues in the
Company's core businesses of coffeemakers and consumer scales consistent with
historical experience, achievement of operating cash flow margins consistent
with historical experience, and the absence of significant increases in interest
rates.

INFLATION

                  Increases in interest rates, the costs of materials and labor,
and federal, state and local tax rates can significantly affect the Company's
operations. Management believes that the current practices of maintaining
adequate operating margins through a combination of new product introductions,
product differentiation, cost reduction, outsourcing, manufacturing and overhead
expense control and careful management of working capital are its most effective
tools for coping with inflation.

NEW ACCOUNTING PRONOUNCEMENTS

                  During 1997, the FASB issued SFAS No. 129, Disclosure of
Information about Capital Structure, with an effective date for periods ending
after December 15, 1997 and, accordingly, will be effective for the financial
statements of the Company for the fiscal year ending in September 1998. The
disclosure requirements under SFAS No. 129 will not impact the Company.

                  Also during 1997, the FASB issued SFAS No. 130, Reporting
Comprehensive Income, and SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, which are effective for periods beginning
after December 15, 1997. The disclosure 


                                       13
<PAGE>   14

requirements of these standards will, accordingly, be included in the financial
statements of the Company for the fiscal year ending September 1999.

YEAR 2000 BUSINESS MATTERS

                  The Company does not expect year 2000 issues to have any
material effect on its costs or to cause any significant disruptions to its
operations. The Company is currently implementing new information systems on a
company-wide basis which are fully year 2000 compliant. These new systems are
being installed to replace the Company's current systems, and are expected to be
fully operational before year 2000 issues will impact the Company. The cost of
these new systems will be capitalized and depreciated over their estimated
useful lives for financial statement purposes.

FORWARD LOOKING STATEMENTS

                  The Company is making this statement in order to satisfy the
"safe harbor" provisions contained in the Private Securities Litigation Reform
Act of 1995. This Quarterly Report on Form 10-Q includes forward-looking
statements relating to the business of the Company. Forward-looking statements
contained herein or in other statements made by the Company are made based on
management's expectations and beliefs concerning future events impacting the
Company and are subject to uncertainties and factors relating to the Company's
operations and business environment, all of which are difficult to predict and
many of which are beyond the control of the Company, that could cause actual
results of the Company to differ materially from those matters expressed in or
implied by forward-looking statements. The Company believes that the following
factors, among others, could affect its future performance and cause actual
results of the Company to differ materially from those expressed in or implied
by forward-looking statements made by or on behalf of the Company; (a) general
economic, business and market conditions; (b) competition; (c) the success of
advertising and promotional efforts; (d) the costs associated with new product
development and the acceptance of new product offerings; (e) the existence or
absence of adverse publicity; (f) changes in relationships with the Company's
major customers or in the financial condition of those customers; (g) the
maintenance of supply arrangements with key suppliers; (h) fluctuations in raw
materials costs or in the availability of materials; and (i) the adequacy of the
Company's financial resources and the availability and terms of any additional
capital.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
         RISK

         Not applicable.





                                       14
<PAGE>   15



                           PART II. OTHER INFORMATION


ITEM 2.           CHANGES IN SECURITIES

                  (c) Recent Sales of Unregistered Securities.

                  No securities of the Company that were not registered under
                  the Securities Act of 1933 have been issued or sold by the
                  Company during the period covered by this Quarterly Report on
                  Form 10-Q other than the following:

                  (i) On November 1, 1997, Meeta Vyas exercised an option, in 
                  the form of a stock subscription, to purchase 91,727 shares
                  of Common Stock. These shares were issued effective as of
                  December 2, 1997. This option had an exercise price equal to 
                  $1.75 per share, for aggregate consideration of $160,522. The
                  Company extended a loan to Ms. Vyas in the amount of $160,522
                  to facilitate her purchase of the shares. Such loan was 
                  extended at a rate of interest equal to the market rate of 
                  interest paid by Signature Brands under its revolving credit 
                  facility. Ms. Vyas repaid the loan and interest charges in 
                  full in January 1998. Registration under the Securities Act of
                  1933 was not affected with respect to the transaction
                  described above in reliance upon the exemption from
                  registration contained in Section 4(2) of the Securities Act
                  of 1933.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (a) See the Exhibit Index at page 17 of this Form 10-Q.

                  (b) No reports on Form 8-K were filed during the quarter
                      for which this report is being filed.






                                       15
<PAGE>   16




                                    SIGNATURE



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.


                                        SIGNATURE BRANDS USA, INC.
                                        SIGNATURE BRANDS, INC.



Date:  February 10, 1998                /s/ Steven M. Billick
                                        --------------------------------
                                        Steven M. Billick
                                        Senior Vice President, Treasurer
                                        and Chief Financial Officer



                                       16
<PAGE>   17






                                  Exhibit Index
                                  -------------


Exhibit Number                      Description of Document
--------------                      -----------------------

10.10                       Credit Agreement dated August 17, 1994, as amended,
                            among Signature Brands', Banque Nationale de Paris,
                            New York Branch, NBD Bank and the banks and other
                            financial institutions named therein

10.25                       Form of Indemnity Agreement entered into by and
                            between the Company and each of its Directors and
                            Officers *

10.26                       Form of Promissory Note, due December 31, 1997,
                            between the Company and Meeta Vyas dated November 1,
                            1997 *

10.27                       Stock Subscription Agreement between the Company and
                            Meeta Vyas dated November 1, 1997 *

27.1                        Financial Data Schedule for Signature Brands USA,
                            Inc.

27.2                        Financial Data Schedule for Signature Brands, Inc.




* Management contract or compensatory plan or arrangement.




                                       17