<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

                                   FORM 10-Q



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

                   For the first quarter ended June 30, 1997
                                               -------------


                        Commission file number 80-19878
                                               --------


                               OPTION CARE, INC.
                               -----------------
             (Exact name of registrant as specified in its charter)


             Delaware                                    36-3791193
-----------------------------------            ------------------------------
   (State or other jurisdiction               (IRS Employer Identification No.)
of incorporation or organization)


100 Corporate North
Suite 212
Bannockburn, Illinois                                                 60015
---------------------------------------                             ----------
(Address of principal executive office)                             (zip code)

Registrant's telephone number, including area code:              (847) 615-1690
                                                                 ---------------

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

                           YES    X         NO
                                -----           -----


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


           Class                        Outstanding as of July 31, 1997
----------------------------           --------------------------------
Common Stock - .01 par value                      10,683,742


                                       1
<PAGE>
 
                                     INDEX
                        OPTION CARE, INC. & SUBSIDIARIES

<TABLE>
<CAPTION>
 
 
PART I                     FINANCIAL INFORMATION
<S>        <C>                                                    <C>
Item 1.    Financial Statements (Unaudited)                       PAGE NO.
           -----------------------------------------------------
 
           Condensed Consolidated Balance Sheets - June 30, 1997
           and December 31, 1996................................         3
 
           Condensed Consolidated Statements of Operations -
           Three and Six Months Ended June 30, 1997 and 1996....         4
 
           Consolidated Statement of Stockholders' Equity -
           Three Months Ended June 30, 1997.....................         5
 
           Condensed Consolidated Statements of Cash Flows -
           Three Months Ended June 30, 1997 and 1996............         6
 
           Notes to Condensed Consolidated Financial Statements.         7
 
Item 2.    Management's Discussion and Analysis of
           -----------------------------------------------------
           Financial Condition and Results of Operations........         8
           -----------------------------------------------------
 
</TABLE>


PART II  OTHER INFORMATION

Item 6.  Exhibits.....................................................    11
         --------                                                           

                                       2
<PAGE>


                         PART I. FINANCIAL INFORMATION
                      OPTION CARE, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                    ASSETS

                                                     June 30,       December 31,
                                                     --------       ------------
                                                       1997             1996
                                                       ----             ----
<S>                                                  <C>            <C>
Current assets:
 Cash and cash equivalents.......................    $    960         $  1,223
 Accounts receivable, net........................      29,614           20,558
 Inventories.....................................       2,818            1,598
 Deferred income taxes...........................       1,154            1,154
 Other current assets............................       6,353            4,283
                                                     --------         --------
     Total current assets........................      40,899           28,816

Property and equipment, net......................       5,251            4,322
Goodwill.........................................      15,257            7,873
Other assets.....................................       3,169            3,030
                                                     --------         --------
     Total assets................................    $ 64,576         $ 44,041
                                                     ========         ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Current portion of long-term debt...............    $    288         $  1,399
 Trade accounts payable..........................       6,455            2,685
 Accrued wages & related employee benefits.......       2,211            1,838
 Accrued expenses................................       3,701            1,436
                                                     --------         --------
     Total current liabilities...................      12,655            7,358

Long-term debt, excluding current portion........      26,093           12,461
Deferred income taxes............................         637              637
Minority interest................................          26               45
                                                     --------         --------
     Total liabilities...........................      39,411           20,501

Stockholders' equity:
 Common stock, $.01 par value, 30,000,000
  shares authorized, 10,684,000 and
  10,527,000 shares issued and outstanding
  at June 30, 1997 and December 31, 1996.........         107              106
 Additional paid-in capital......................      41,785           41,517
 Retained earnings (deficit).....................     (16,727)         (18,083)
                                                      -------         --------
     Total stockholders' equity..................      25,165           23,540
                                                     --------         --------
     Total liabilities and stockholders'
       equity....................................    $ 64,576         $ 44,041
                                                     ========         ========
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>
 

                      OPTION CARE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                     (In thousands, except per share data)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                  Three Months Ended     Six Months Ended
                                                                       June 30,              June 30,
                                                                      ----------            ----------
                                                                   1997       1996       1997       1996
                                                                  -------    -------    -------    -------
<S>                                                               <C>        <C>        <C>        <C>
Revenues:                                                         
Patient care services                                             $18,923    $12,815    $33,660    $23,230
Royalty fees and other                                              2,474      3,089      5,385      6,097
Product sales                                                       2,353      2,206      4,629      4,489
                                                                  -------    -------    -------    -------
  Total Revenues                                                   23,750     18,110     43,674     33,816
                                                                  
Cost of revenues                                                   18,937     13,083     33,805     24,207
                                                                  -------    -------    -------    -------
  Gross profit                                                      4,813      5,027      9,869      9,609
                                                                  
Selling, general and administrative expenses                        3,262      2,619      6,235      5,198
Provision for doubtful accounts                                       531        603        962        973
Amortization of goodwill                                              118        257        172        484
                                                                  -------    -------    -------    -------
  Total operating expenses                                          3,911      3,479      7,369      6,655
                                                                  
Operating income                                                      902      1,548      2,500      2,954
Other income (expense), net                                          (151)       (10)      (163)       106
                                                                  -------    -------    -------    -------
                                                                  
Income before income taxes                                            751      1,538      2,337      3,060
Income tax expense                                                    317        672        981      1,344
                                                                  -------    -------    -------    -------
                                                                  
Net income                                                        $   434    $   866    $ 1,356    $ 1,716
                                                                  =======    =======    =======    =======
                                                                  
Net income per common & common equivalent shares                  $  0.04    $  0.08    $  0.13    $  0.16
                                                                  =======    =======    =======    =======
                                                                  
Weighted average common & common equivalent shares outstanding     10,788     10,741     10,768     10,681
                                                                  =======    =======    =======    =======
</TABLE>

    See accompanying notes to condensed consolidated financial statements.
                                        
                                       4
<PAGE>
 

                      OPTION CARE, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE SIX MONTHS ENDED JUNE 30, 1997
                       (In thousands, except share data)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                          Additional                   Total
                                Common     Paid-in     Retained    Stockholders'
                                 Stock     Capital     Earnings       Equity
                                -------   ----------   --------       -------
<S>                             <C>       <C>          <C>         <C>
Balances, December 31, 1996..   $   106   $   41,517   $(18,083)      $23,540

Net income...................       ---          ---      1,356         1,356

Issuance of common stock.....         1          268        ---           269
                                -------   ----------   --------       -------

Balances, June 30, 1997......   $   107   $   41,785   $(16,727)      $25,165
                                =======   ==========   ========       =======
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>
 

                      OPTION CARE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                (In thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                               1997       1996
                                                             -------    -------
<S>                                                          <C>        <C>
Cash flows from operating activities:                                
  Net income.............................................    $ 1,356    $ 1,716
  Adjustments to reconcile net income to net cash                    
       provided by operating activities:                             
    Depreciation and amortization........................      1,182      1,095
    Provision for doubtful accounts......................        962        973
    Change in assets and liabilities net of effects                  
       from purchase of businesses.......................     (6,812)    (3,285)
                                                             -------    -------
Net cash provided (used) by operating activities.........     (3,312)       499
                                                             -------    -------
                                                                     
Cash flows from investing activities:                                
  Additions to other assets..............................     (1,775)      (984)
  Payments for purchases of property and equipment.......     (7,966)    (3,265)
                                                             -------    -------
Net cash used in investing activities....................     (9,741)    (4,249)
                                                             -------    -------
                                                                     
Cash flows from financing activities:                                
  Net borrowings on revolving credit facility............     12,900      3,000
  Net (payments) borrowing of other long-term debt.......       (379)       717
  Proceeds from issuance of stock........................        269        278
                                                             -------    -------
       Net cash provided by financing activities.........     12,790      3,995
                                                             -------    -------
                                                                     
Net increase (decrease) in cash..........................       (263)       245
                                                                     
Cash and cash equivalents, beginning of period...........      1,223        502
                                                             -------    -------
                                                                     
Cash and cash equivalents, end of period.................    $   960    $   747
                                                             =======    =======
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>
 
                      OPTION CARE, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                            June 30, 1997 and 1996



1.  Basis of Presentation
    ---------------------
 
    The accompanying unaudited condensed consolidated financial statements have
    been prepared in accordance with generally accepted accounting principles
    for interim financial information. Accordingly, they do not include all
    information and footnotes required by generally accepted accounting
    principles for complete financial statements. In the opinion of management,
    all adjustments (consisting of normal recurring accruals) considered
    necessary for a fair presentation have been included. Operating results for
    the six months ended June 30, 1997 are not necessarily indicative of the
    results that may be expected for the year ended December 31, 1997. For
    further information, refer to the consolidated financial statements and
    footnotes thereto included in the Company's Form 10-K for the year ended
    December 31, 1996.


2.  Recent Accounting Pronouncement
    -------------------------------

    In February, 1997, the Financial Accounting Standards Board issued Statement
    of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share"
    ("EPS"). Implementation of SFAS No. 128 is required for the periods ending
    after December 15, 1997. The standard establishes new methods for computing
    and presenting EPS and replaces the presentation of primary and fully-
    diluted EPS with basic and diluted EPS. The new methods under this standard
    are not expected to have a significant impact on the Company's EPS amounts.

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.


The following discussion should be read in conjunction with the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.  Any forward looking
statements in the following discussion relating to acquisitions or other
business development activities and to future competition or regulation involve
risks and uncertainties that could significantly affect anticipated results in
the future.  These risks and uncertainties include, but are not limited to,
uncertainties relating to acquisitions and divestitures, availability of capital
to fund operations and acquisitions, sales and renewals of franchises,
government and regulatory policies, general economic conditions and changes in
the competitive environment in which the Company operates.


Discussion of Results of Operations for the Second Quarter Ended June 30, 1997.

For the quarter ended June 30, 1997, total revenues were $23.8 million, an
increase of $5.6 million or 31.1 percent over the comparable period last year.
Patient care services revenue (revenues generated at Company-owned stores) for
the second quarter were $18.9 million, a $6.1 million or 47.6 percent increase
over the comparable quarter in 1996.  Royalty fees were $2.5 million in the
second quarter of 1997, a $0.6 million or 19.9 percent decrease over the
comparable quarter last year.  Product sales for the second quarter were $2.4
million, a $0.1 million or 6.6 percent increase over the comparable quarter last
year.

The growth in patient care services revenue and decline in royalty fees are
primarily driven by the Company's acquisition strategy which includes the
acquisition of franchise locations. During the quarter ended June 30, 1997, the
Company acquired franchise offices in Lincoln and Grand Island, Nebraska and
Victorville, California.  These acquisitions and the resulting shift in revenue
mix is consistent with the Company's strategic shift to being a provider of
comprehensive home health care services with a supporting franchise network
rather than a franchisor of infusion therapy.

Gross profit for the second quarter of fiscal 1997 decreased $0.2 million or 4.2
percent from gross profit for the same period in fiscal 1996.  As a percentage
of revenues, gross profit decreased from 27.7 percent to 20.2 percent in the
second quarter of fiscal 1997.  The decline in gross margin is due primarily to
changes in the Company's revenue mix, specifically the decline in royalty fees
coupled with growth in patient care service revenue. Revenues from patient care
services (associated with Company-owned Option Care offices) have a higher cost
of revenue than the Company's franchise business, which consists of revenues
from royalty and other fees.

Total operating expenses for the second quarter ended June 30, 1997 were $3.9
million, an increase of $0.4 million or 12.4 percent over the comparable quarter
last year.  Selling, general and administrative expenses were $3.3 million, an
increase of $0.6 million or 24.5 percent compared to the second quarter of 1996.
This increase was primarily driven by the Company's software development
business, Management By Information, Inc. (MBI), which was acquired in the third
quarter of 1996.  Therefore, the SG&A expenses relating to MBI are not included
in the second quarter of 1996 but are included in the second quarter of 1997.

Other expense for the second quarter ended June 30, 1997 was approximately
$151,000.  This consisted of interest expense of approximately $447,000 which
was partially offset by vendor administrative fee income of $162,000.  The
$447,000 in interest expense for the quarter ended June 30, 1997 compares with
$245,000 of interest expense in the comparable prior year period.  The $202,000
increase in interest expense is due to borrowings under the Company's line of
credit to fund acquisitions and related working capital requirements.

Pretax income for the second quarter of fiscal 1997 decreased $0.8 million or
51.2 percent over the comparable period of fiscal 1996, as a result of the
decreased gross profit from the shift in revenue mix, increased operating
expenses from the MBI acquisition and increased interest expense.

Net income for the second quarter ended June 30, 1997, was $0.4 million, a 49.9
percent decrease compared with net income for the similar period in 1996.  The
decrease was caused by  the same factors described in the discussion regarding
pretax income.

                                       8
<PAGE>
 
The effective combined federal and state income tax rate was 42.2 percent in the
second quarter of fiscal 1997 versus 43.7 percent for the second quarter of
fiscal 1996. The effective tax rate is higher than the federal statutory tax
rate of 34% due to state income taxes and non-tax deductible expenses, primarily
goodwill amortization. The non-deductible portion of the Company's expenses
(primarily goodwill amortization) is essentially fixed, so the effective tax
rate decreases as pretax income increases.

Discussion of Results of Operations for the Six Months Ended June 30, 1997.

For the first six months ended June 30, 1997, total revenues were $43.7 million,
an increase of $9.9 million or 29.1 percent over the comparable period last
year.  Patient care services revenue (revenues generated at Company-owned
stores) for the first six months were $33.7 million, a $10.4 million or 44.8
percent increase over the comparable period in 1996. Royalty fees were $5.4
million for the first six months of 1997, a $0.7 million or 11.6 percent
decrease over the comparable period last year.  Product sales for the first six
months were $4.6 million, a $0.1 million or 3.1 percent increase over the
comparable period last year.

The growth in patient care services revenue and decline in royalty fees are
primarily driven by the Company's acquisition strategy which includes the
acquisition of franchise locations. During the first six months ended June 30,
1997, the Company acquired franchise offices in Ann Arbor, Michigan, Miami,
Florida, Lincoln and Grand Island, Nebraska, and Victorville and Vista,
California.  These acquisitions and the resulting shift in revenue mix is
consistent with the Company's strategic shift to being a provider of
comprehensive home health care services with a supporting franchise network
rather than a franchisor of infusion therapy.

Gross profit for the first six months of fiscal 1997 increased $0.3 million or
2.7 percent from gross profit for the same period in fiscal 1996.  As a
percentage of revenues, gross profit decreased from 28.4 percent to 22.5 percent
for the first six months of fiscal 1997. The decline in gross margin is due to
changes in the Company's revenue mix, specifically the decline in royalty fees
coupled with growth in patient care service revenue.  Revenues from patient care
services (associated with Company-owned Option Care offices) have a higher cost
of revenue than the Company's franchise business, which consists of revenues
from royalty and other fees.

Total operating expenses for the first six months ended June 30, 1997 were $7.4
million, an increase  of $0.7 million or 10.7 percent over the comparable period
last year.  Selling, general and administrative expenses were $6.2 million, an
increase of $1.0 million or 19.9 percent compared to the first six months of
1996.  This increase was primarily driven by the Company's software development
business, Management By Information, Inc. (MBI), which was acquired in the third
quarter of 1996.  Therefore, the SG&A expenses relating to MBI are not included
in the first six months of 1996 but are included in the first six months of
1997.

Other expense for the first six months ended June 30, 1997 was approximately
$163,000.  This consisted of interest expense of $739,000 which was partially
offset by vendor administrative fee income of $323,000. The $739,000 in interest
expense for the first six months ended June 30, 1997 compares with $437,000 of
interest expense in the comparable prior year period. The $302,000 increase in
interest expense is due to borrowings under the Company's line of credit to fund
acquisitions and related working capital requirements.

Pretax income for the second quarter of fiscal 1997 decreased $0.7 million or
23.6 percent over the comparable period of fiscal 1996, as a result of the
decreased gross profit from the shift in revenue mix, increased operating
expenses from the MBI acquisition and increased interest expense.

Net income for the first six months ended June 30, 1997, was $1.4 million, a
20.9 percent decrease compared with net income for the similar period in 1996.
The decrease was caused by the same factors described in the discussion
regarding pretax income.

The effective combined federal and state income tax rate was 41.9 percent for
the first six months of fiscal 1997 versus 43.9 percent for the comparable
period in fiscal 1996. The effective tax rate is higher than the federal
statutory tax rate of 34% due to state income taxes and non-tax deductible
expenses, primarily goodwill amortization. The non-deductible portion of the
Company's expenses (primarily goodwill amortization) is essentially fixed, so
the effective tax rate decreases as pretax income increases.

                                       9
<PAGE>
 
Liquidity and Capital Resources

As of June 30, 1997, the Company had cash and cash equivalents of $1.0 million.
The Company's working capital at that date was $28.2 million, compared with
$21.4 million on December 31, 1996.  The increase in working capital of $6.8
million is derived primarily by acquisitions and the resultant net increase in
working capital.  The Company attempts to manage its cash balances to minimize
interest expense on its line of credit borrowing.

In December 1996, the Company entered into a $30.0 million revolving credit
arrangement, of which there were outstanding borrowings of $24.8 million at June
30, 1997.   The agreement was amended during the first quarter of 1997 to
increase the maximum available amount to $35.0 million.  The covenants under
this credit agreement include, but are not limited to, a minimum interest
coverage ratio, a debt to capitalization ratio and a debt to cash flow ratio.
These covenants restrict the total amount available under the line of credit to
an amount below $35.0 million.  This credit agreement expires and the total
outstanding principal balance is payable in full in December, 1998.  The Company
will be initiating discussions with its senior lenders regarding this credit
agreement and the availability of financing to meet the cash needs of the
business and to meet the Company's acquisition plans. There are no guarantees
that such financing will be available or available at an acceptable cost.

There are currently various proposals under development to enact health care
reform on a national, state and local level.  It is not possible at this time to
predict the cash flow impact, if any,  which such changes may have on providers
of home health care services and on the Option Care locations.

                                       10
<PAGE>
 
PART II        OTHER INFORMATION

Item 4         Submissions of Matters to a Vote of Security Holders
------         ----------------------------------------------------
 
               None.


Item 6 (a)     Exhibits
----------     --------

      11.      Computations of Per Share Earnings


Item 6 (b)     Reports on Form 8-K or Form 8
----------     -----------------------------
 
               None.
   
                                      11
<PAGE>
 
                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.



                                           OPTION CARE, INC.



                                     By:   /s/ Paul S. Jurewicz
                                           -------------------------
                                           Paul S. Jurewicz
                                           Senior Vice President and
                                           Chief Financial Officer


                                     Date: August 13, 1997


                                       12