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

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended September 30, 1999

Commission File Number-   0-27602
                          -------

                              NCS HealthCare, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                          No. 34-1816187
-------------------------------                           ----------------------
(State or other jurisdiction of                               (IRS employer
 incorporation or organization)                           identification number)

3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122
---------------------------------------------------------
   (Address of principal executive offices and zip code)

                  (216) 378-6800
----------------------------------------------------
(Registrant's telephone number, including area code)


Indicate by check 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 requirement for the past 90 days.

Yes  X   No
    ---     ---

Common Stock Outstanding
------------------------

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

Class A Common Stock, $.01 par value -- 14,516,329 shares as of November 9, 1999
Class B Common Stock, $.01 par value -- 5,871,811 shares as of November 9, 1999

                                       1
<PAGE>   2
<TABLE>
                               NCS HEALTHCARE, INC.
                                 AND SUBSIDIARIES

                                       INDEX

<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
Part I.  Financial Information:

Item 1.  Financial Statements (Unaudited)

          Condensed Consolidated Balance Sheets-
               September 30, 1999 and June 30, 1999                            3

          Condensed Consolidated Statements of Income-
               Three months ended-
               September 30, 1999 and 1998                                     4

          Condensed Consolidated Statements of Cash Flows-
               Three months ended-
               September  30, 1999 and 1998                                    5

Notes to Condensed Consolidated Financial Statements - September  30, 1999     6

Item 2.  Management's Discussion and Analysis of
         Results of Operations and Financial Condition                        10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           16

Part II. Other Information:

Item 6.  Exhibits and Reports on Form  8-K                                    17

Signatures                                                                    18
</TABLE>

                                       2
<PAGE>   3
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                                     NCS HEALTHCARE, INC.
                                       AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED BALANCE SHEETS
                           (IN THOUSANDS, EXCEPT SHARE INFORMATION)

<CAPTION>
                                                                      (Unaudited)    (Note A)
                                                                     September 30,   June 30,
                                                                         1999          1999
                                                                     -------------  ---------
<S>                                                                  <C>            <C>
ASSETS
Current Assets:
Cash and cash equivalents                                              $ 20,356     $ 29,424
Accounts receivable, less allowances                                    164,462      160,168
Inventories                                                              49,184       49,244
Other                                                                    40,335       46,397
                                                                       --------     --------
                   Total current assets                                 274,337      285,233

Property and equipment, at cost net of accumulated
          depreciation and amortization                                  58,016       59,116
Goodwill, less accumulated amortization                                 341,153      343,247
Other assets                                                             12,853       11,903
                                                                       --------     --------
                   Total assets                                        $686,359     $699,499
                                                                       ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
          Accounts payable                                             $ 52,245     $ 50,061
          Accrued expenses and other liabilities                         32,158       37,777
                                                                       --------     --------
                   Total current liabilities                             84,403       87,838

Line of credit                                                          203,120      214,700
Long-term debt, excluding current portion                                 1,993        1,936
Convertible subordinated debentures                                     100,000      100,000
Other                                                                    18,564       18,591


Stockholders' Equity:
          Preferred stock, par value $ .01 per share, 1,000,000
              shares authorized; none issued                                 --           --
          Common stock, par value $ .01 per share:
              Class A - 50,000,000 shares authorized; 14,453,662
                and 14,277,492 shares issued and outstanding at
                September 30, 1999 and June 30, 1999, respectively          145          143
              Class B - 20,000,000 shares authorized; 5,899,673
                and 6,005,280 shares issued and outstanding at
                September 30, 1999 and June 30, 1999, respectively           59           60
          Paid-in capital                                               264,198      263,882
          Retained earnings                                              13,877       12,349
                                                                       --------     --------
                   Total stockholders' equity                           278,279      276,434
                                                                       --------     --------
                   Total liabilities and stockholders' equity          $686,359     $699,499
                                                                       ========     ========
</TABLE>

Note A:   The balance sheet at June 30, 1999 has been derived from the audited
          consolidated financial statements at that date, but does not include
          all of the information and footnotes required by generally accepted
          accounting principles for complete financial statements.

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>   4
<TABLE>
                                NCS HEALTHCARE, INC.
                                  AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                    (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<CAPTION>
                                                              THREE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                               1999         1998
                                                             --------     --------
<S>                                                          <C>          <C>
Revenues                                                     $184,191     $172,846
Cost of revenues                                              143,891      128,990
                                                             --------     --------
Gross profit                                                   40,300       43,856
Selling, general and administrative expenses (1)               32,040       32,801
                                                             --------     --------
Operating income                                                8,260       11,055
Interest expense, net                                           5,670        4,478
                                                             --------     --------
Income before income taxes                                      2,590        6,577
Income tax expense                                              1,062        2,829
Cumulative effect of accounting change, net of taxes (1)           --       (2,921)
                                                             --------     --------
Net income                                                   $  1,528     $    827
                                                             ========     ========

Net income per share - basic                                 $   0.08     $   0.04
                                                             ========     ========
Net income per share - diluted                               $   0.08     $   0.04
                                                             ========     ========

Income before cumulative effect
  of accounting change per share - basic                     $   0.08     $   0.19
                                                             ========     ========
Income before cumulative effect of accounting
  change per share - diluted                                 $   0.08     $   0.19
                                                             ========     ========

Shares used in the computation - basic                         20,322       20,085
                                                             ========     ========
Shares used in the computation - diluted                       20,322       20,171
                                                             ========     ========
</TABLE>

(1)      As disclosed in the Form 10-K for the year ended June 30, 1999,
         selling, general and administrative expenses as originally reported for
         the first quarter of fiscal 1999 excluded pre-tax costs of $1,757 that
         were capitalized prior to the adoption of SOP 98-5, "Reporting on the
         Costs of Start-up Activities." The $2,921 cumulative effect of the
         accounting change represents start-up costs, net of tax, that were
         previously capitalized as of June 30, 1998. As a result of the
         restatement for the adoption of SOP 98-5, net income and diluted
         earnings per share, were reduced by $3,923 and $0.20 from the
         originally reported amounts of $4,750 and $0.24, respectively, for the
         first quarter of fiscal 1999.

            See notes to condensed consolidated financial statements.

                                       4
<PAGE>   5
<TABLE>
                                   NCS HEALTHCARE, INC.
                                     AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (UNAUDITED)
                                      (IN THOUSANDS)

<CAPTION>
                                                                     Three Months Ended
                                                                        September 30,
                                                                   ----------------------
                                                                     1999          1998
                                                                   --------      --------
<S>                                                                <C>           <C>
OPERATING ACTIVITIES
Net income                                                         $  1,528      $    827
Adjustments to reconcile net income to net cash provided by
   (used in) operating activities:
          Depreciation and amortization                               6,300         5,746
          Cumulative effect of accounting change, net of taxes           --         2,921
          Changes in assets and liabilities, net of effects of
             assets and liabilities acquired:
                   Accounts receivable, net                          (4,294)      (17,747)
                   Accrued expenses and other liabilities            (3,196)       (5,103)
                   Other, net                                         6,438        (6,482)
                                                                   --------      --------
Net cash provided by (used in) operating activities                   6,776       (19,838)
                                                                   --------      --------

INVESTING ACTIVITIES
Purchases of businesses                                                  --          (425)
Capital expenditures for property and equipment, net                 (2,329)       (6,350)
Other                                                                (1,753)       (1,681)
                                                                   --------      --------
Net cash used in investing activities                                (4,082)       (8,456)
                                                                   --------      --------

FINANCING ACTIVITIES
Line-of-credit, net                                                 (11,580)       25,200
Repayment of long-term debt                                            (182)         (250)
                                                                   --------      --------
Net cash (used in) provided by financing activities                 (11,762)       24,950
                                                                   --------      --------

Net decrease in cash and cash equivalents                            (9,068)       (3,344)
Cash and cash equivalents at beginning of period                     29,424        21,186
                                                                   --------      --------
Cash and cash equivalents at end of period                         $ 20,356      $ 17,842
                                                                   ========      ========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       5
<PAGE>   6
                              NCS HEALTHCARE, INC.
                                AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

1.  The accompanying unaudited condensed consolidated financial statements have
    been prepared in accordance with generally accepted accounting principles
    for interim financial information and with the instructions to Form 10-Q and
    Article 10 of Regulation S-X. Accordingly, they do not include all of the
    information and footnotes required by generally accepted accounting
    principles for complete financial statements. In the opinion of management,
    all adjustments (consisting of normal recurring accruals) considered
    necessary for a fair presentation have been included. Operating results for
    the three month period ended September 30, 1999 are not necessarily
    indicative of the results that may be expected for the year ending June 30,
    2000. For further information, refer to the consolidated financial
    statements and footnotes thereto included in the Company's Form 10-K for the
    year ended June 30, 1999.

2.  During the fourth quarter of fiscal 1999, the Company recorded special and
    nonrecurring charges of $40.5 million ($24.3 million net of tax). A special
    charge of $32.4 million before tax was recorded to increase the allowance
    for doubtful accounts, and nonrecurring charges of $8.1 million before tax
    were recorded in connection with the implementation and execution of
    strategic restructuring and consolidation initiatives of certain operations
    and other nonrecurring items.

    The special charge to increase the allowance for doubtful accounts resulted
    from significant changes observed in industry and customer trends during the
    last three months of the fiscal year ended June 30, 1999, and items
    encountered from recent acquisitions. The circumstances of the customer and
    industry trends primarily relate to increased bankruptcies and significant
    financial difficulties recently experienced by the Company's customers
    primarily as a result of the Medicare Prospective Payment System
    implementation. The acquisition items encountered pertain to specific
    accounts receivable collectibility issues identified relating to previous
    utilization of "legacy" systems, and other nonrecurring issues which have
    resulted in potentially uncollectible accounts receivable.

    During the fourth quarter of fiscal 1999, the Company adopted a new plan of
    restructuring to consolidate certain pharmacy sites in similar geographies.
    The plan is a continuation of the plan adopted in fiscal 1998 to combine
    pharmacies in close proximity in order to improve operating efficiencies. As
    a result of the new exit plan, 4 additional pharmacy sites were consolidated
    into either a new or existing location as of September 30, 1999. During the
    year ended June 30, 1999, the Company recorded nonrecurring charges of $4.7
    million, before tax, related to the new site consolidations and additional
    costs incurred on the site consolidations announced in the prior year.

    The remaining $3.4 million of the nonrecurring charge primarily relates to
    severance incurred during the fourth quarter associated with the Company's
    expense reduction initiatives, additional acquisition related and other
    miscellaneous expenses.

    Employee severance costs included in the nonrecurring charge relate to the
    termination of 120 employees.

                                       6

<PAGE>   7
    Details of the fourth quarter fiscal 1999 special and nonrecurring charge,
    related activity and reserve balance are as follows:

<TABLE>
<CAPTION>
                                                        Nonrecurring               Reserve                 Reserve
            Description                Cash/Non-cash       Charge      Activity   At 6/30/99   Activity   At 9/30/99
            -----------                -------------    ------------   --------   ----------   --------   ----------
                                                        (In millions)
<S>                                    <C>              <C>            <C>        <C>          <C>        <C>
Site Consolidations
     Severance/compensation related    Cash                 $ 2.1       $ (1.5)      $ .6        $(.4)       $.2
     Lease terminations                Cash                    .6          (.1)        .5         (.2)        .3
     Asset impairments                 Non-cash               1.5         (1.5)        --          --         --
     Other                             Cash                    .5          (.5)        --          --         --

Special increase to allowance
     for doubtful accounts             Non-cash              32.4        (32.4)        --          --         --

Other                                  Cash                   3.4         (2.7)        .7         (.3)        .4
                                                            -----       ------       ----        ----        ---

Total                                                       $40.5       $(38.7)      $1.8        $(.9)       $.9
                                                            =====       ======       ====        ====        ===
</TABLE>


    During the fourth quarter of fiscal 1998, the Company recorded a
    nonrecurring charge of $8,900,000 primarily related to: 1) the adoption of a
    formal plan of restructuring to consolidate certain pharmacy sites in
    similar geographies; 2) the buyout of existing employment agreements with
    the prior owners of certain acquired businesses; 3) the write-off of certain
    financing fees; and 4) additional acquisition related expenses.

    The Company has adopted a formal plan of restructuring that will combine
    pharmacies in close geographical proximity in order to improve operating
    efficiencies. As a result of the plan, 17 pharmacy sites will be
    consolidated into either new or existing locations and an estimated total of
    149 employees will be terminated. As of September 30, 1999, 14 site
    consolidations were completed, with the remainder expected to be completed
    by the end of fiscal 2000.

Details of the fourth quarter fiscal 1998 nonrecurring charge, related activity
and reserve balance are as follows:

<TABLE>
<CAPTION>
                                                        Nonrecurring               Reserve                 Reserve
            Description                Cash/Non-cash       Charge      Activity   At 6/30/99   Activity   At 9/30/99
            -----------                -------------    ------------   --------   ----------   --------   ----------
                                                        (In millions)
<S>                                    <C>              <C>            <C>        <C>          <C>        <C>
Site Consolidations
     Severance packages                Cash                 $ .5         $ (.5)       $--        $ --        $--
     Lease terminations                Cash                   .7           (.4)        .3         (.1)        .2
     Asset impairments                 Non-cash              3.5          (3.5)        --          --         --
     Other                             Cash                   .6           (.6)        --          --         --

Buyout of employment agreements        Cash                   .9           (.8)        .1          --         .1

Write-off financing fees               Non-cash              1.3          (1.3)        --          --         --


Other
     Cash                                                    1.0           (.9)        .1         (.1)        --
     Non-cash                                                 .4           (.4)        --          --         --
                                                            ----         -----        ---        ----        ---

Total                                                       $8.9         $(8.4)       $.5        $(.2)       $.3
                                                            ====         =====        ===        ====        ===
</TABLE>

                                       7
<PAGE>   8
3.  The following table sets forth the computation of basic and diluted earnings
    per share in accordance with Statement of Financial Accounting Standards No.
    128, "Earnings per Share" (SFAS No. 128):

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                        ----------------------
                                                                          1999           1998
                                                                        -------        -------
<S>                                                                     <C>            <C>
           Numerator:
             Numerator for basic earnings per share - net income        $ 1,528        $   827
             Effect of dilutive securities:
                Convertible debentures                                       --             --
                                                                        -------        -------

                Numerator for diluted earnings per share                $ 1,528        $   827
                                                                        =======        =======

           Denominator:
              Denominator for basic earnings per share -
                Weighted average common shares                           20,322         20,085
                                                                        -------        -------
              Effect of dilutive securities:
                 Stock options                                               --             86
                 Convertible debentures                                      --             --
                                                                        -------        -------
              Dilutive potential common shares                               --             86
                                                                        -------        -------

              Denominator for diluted earnings per share                 20,322         20,171
                                                                        =======        =======

           Basic earnings per share:
                Net income per share before accounting change           $  0.08        $  0.19
                Cumulative effect of change in accounting principle          --          (0.15)
                                                                        -------        -------
                Net income per share                                    $  0.08        $  0.04
                                                                        =======        =======


           Diluted earnings per share:
                Net income per share before accounting change           $  0.08        $  0.19
                Cumulative effect of change in accounting principle          --          (0.15)
                                                                        -------        -------
                Net income per share                                    $  0.08        $  0.04
                                                                        =======        =======
</TABLE>

    At September 30, 1999, the Company has 1,335,944 of employee stock options
    that are potentially dilutive that were not included in the computation of
    diluted earnings per share as their effect would be antidilutive. The
    Company had $100,000,000 of convertible subordinated debentures outstanding
    at September 30, 1999 and 1998, that were convertible into 3,058,000 shares
    of Class A Common Stock that were not included in the computation of diluted
    earnings per share as their effect would be antidilutive for all periods
    presented.

4.  The Company's facility in Indianapolis, Indiana has been the subject of an
    investigation by federal authorities, and the Company has engaged in
    discussions with representatives of the U.S. Attorney's office concerning
    the alleged violations of federal law at that facility. It is possible that
    the imposition of significant fines or other remedies in connection with the
    Indiana matter could have a material effect on the Company's financial
    condition and results of operations.

    The Company is involved from time to time in other litigation and regulatory
    investigations on various matters relating to the conduct of its business
    and acquisition related events. The Company is unable to predict the
    ultimate outcome of these other various current litigation and regulatory
    investigation matters. The Company

                                       8
<PAGE>   9
    intends to vigorously defend actions currently pending. However, if the
    Company is unsuccessful in defending such matters and insurance is
    unavailable or insufficient, the resolution of certain lawsuits and
    regulatory investigations could have a material effect on the Company's
    consolidated financial position, results of operations, and cash flows.

    Certain of the Company's acquisition agreements provide for contingent
    purchase price arrangements under which the purchase price paid may be
    subsequently increased upon the achievement of specific operating
    performance targets during post acquisition periods. The additional purchase
    price, payable in cash or Company stock is recorded, if earned, upon
    resolution of the contingent factors. Depending on the outcome of various
    contingent factors, the purchase price contingently payable could have a
    material effect on the Company's financial condition and results of
    operations.

                                       9
<PAGE>   10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

Results of Operations

Operating results for the fiscal quarter ended September 30, 1999 continued to
be negatively impacted by the implementation of Medicare's Prospective Payment
System (PPS). The adverse impact of the implementation of the PPS under the
Balanced Budget Act of 1997 for Medicare residents of skilled nursing
facilities was significantly greater than anticipated. PPS has created numerous
changes to reimbursement policies applicable to skilled nursing under Medicare
Part A. Prior to PPS, Medicare reimbursed each skilled nursing facility based on
that facility's actual Medicare Part A costs plus a premium. Under PPS, Medicare
pays skilled nursing facilities a fixed fee per Medicare Part A patient day
based on the acuity level of the patient. The per diem rate covers all items and
services furnished during a covered stay for which reimbursement was formerly
made separately under Medicare. Consequently, the Company has experienced
revenue pressure as a result of nursing facilities attempting to manage
pharmaceutical costs along with all other costs associated with patient care
under a simple per diem reimbursement amount. In addition, there has been a
reduction in utilization of other therapies such as speech, occupational and
physical rehabilitation. Additionally, as a result of these changes, skilled
nursing facilities have become increasingly more reluctant to admit Medicare
residents, especially those requiring complex care, causing Medicare census in
these facilities to weaken and a reduction in the average length of stay for
Medicare residents. These factors have had the effect of significantly reducing
overall occupancy in the facilities served by the Company. The resident acuity
level has also decreased as these facilities have attempted to avoid high acuity
patients negatively impacting overall utilization of drugs, particularly those
with higher cost such as infusion therapy. For Medicare certified skilled
nursing facilities with a high cost structure, or those which are unable to cut
costs, PPS has caused significant earnings and cash pressure. Some facilities
have sought consolidation as a method of reducing costs and increasing
efficiencies causing the Company to experience some bed loss.

These outcomes have negatively impacted nursing facilities and the institutional
pharmacy services industry as a whole. Although there may be some legislative
relief for the Company's customers, management is reacting to pressures in the
current PPS environment by adjusting its cost structure appropriately. The
Company is rapidly reducing operating and overhead costs and accelerating the
implementation of the hub and spoke fulfillment and delivery model.

Revenues for the three months ended September 30, 1999 increased $11,345,000 or
6.6% to $184,191,000 from $172,846,000 recorded in the comparable period in
fiscal 1999.

The increase in revenues during the first quarter of fiscal 2000 over the
comparable prior year period is primarily attributed to internal growth. The
Company's revenues continued to grow through marketing efforts to new and
existing clients, increased drug utilization of long-term care facilities and
the growth and integration of new and existing products and services by non
Medicare Part-A residents. Internal revenue growth was primarily driven by
expansion of the Company's non-pharmacy products and services. The total number
of beds served by the Company as of September 30, 1999 was 258,000, up from the
251,000 beds served at September 30, 1998, but a slight decrease from the
262,000 beds served at June 30, 1999. Although the Company added a number of
new customers during the quarter through its sales and marketing efforts, the
number of beds served by the Company declined slightly due to decisions by
management to terminate several uneconomic accounts.

Cost of revenues for the three months ended September 30, 1999 increased
$14,901,000 or 11.6% to $143,891,000 from $128,990,000 recorded in the
comparable period in fiscal 1999. Cost of revenues as a percentage of revenues
for the three month period ended September 30, 1999 was 78.1%, compared to 74.6%
for the same period during the prior fiscal year.

Gross margins during the period were effected by improved leverage associated
with purchasing pharmaceuticals, improvements in formulary management programs
and restructuring and streamlining production costs. These improvements were
offset by gross margin reductions due to the impact of the PPS reimbursement
system. The current period margin pressure resulted from continued Medicare Part
A pricing pressure and reduced acuity levels and census

                                       10
<PAGE>   11
at customer facilities. In addition, payer mix has shifted slightly towards
lower margin payers from the higher margin Medicare Part A business.

Selling, general and administrative expenses for the three months ended
September 30, 1999 decreased by $761,000 or 2.3% to $32,040,000, from
$32,801,000 recorded in the comparable period in fiscal 1999. Selling, general
and administrative expenses as a percentage of revenues was 17.4% for the three
month period ended September 30, 1999, compared to 19.0% during the comparable
period in fiscal 1999. Excluding the addition of $1,757,000 of pre-tax costs in
the first quarter of fiscal 1999 for costs that were capitalized prior to the
adoption of SOP-98-5, "Reporting on the Costs of Start-up Activities", selling,
general and administrative costs for the three months ended September 30, 1999
increased $996,000 or 3.2% to $32,040,000 from $31,044,000 recorded in the
comparable period in fiscal 1999. Excluding the effects of the adoption of SOP
98-5, selling, general and administrative expenses as a percentage of revenues
was 17.4% for the three month period ended September 30, 1999, compared to 18.0%
during the comparable period in fiscal 1999. The percentage decrease for the
three month period ended September 30, 1999 is a result of efforts by the
Company to reduce operating and overhead costs, accelerating the implementation
of the hub and spoke fulfillment and delivery model and the ability to leverage
overhead expenses over a larger revenue base. The Company has already reduced
annualized operating expenses by over $8 million through staff reductions,
selling general and administrative expense savings and the closing of four
pharmacy sites.

The Company had net interest expense of $5,670,000 for the three month period
ended September 30, 1999, compared to net interest expense of $4,478,000 during
the comparable period in fiscal 1999. The increase is primarily attributable to
increased borrowing on the Company's revolving credit facility and other finance
related charges during the first quarter of fiscal 2000 as compared to the same
period in fiscal 1999. The additional funds were primarily used to fund internal
growth and capital expenditures for infrastructure improvement.

During the fourth quarter of fiscal 1999, the Company recorded special and
nonrecurring charges of $40.5 million ($24.3 million net of tax). A special
charge of $32.4 million before tax was recorded to increase the allowance for
doubtful accounts, and nonrecurring charges of $8.1 million before tax were
recorded in connection with the implementation and execution of strategic
restructuring and consolidation initiatives of certain operations and other
nonrecurring items.

The special charge to increase the allowance for doubtful accounts resulted from
significant changes observed in industry and customer trends during the last
three months of the fiscal year ended June 30, 1999, and items encountered from
recent acquisitions. The circumstances of the customer and industry trends
primarily relate to increased bankruptcies and significant financial
difficulties recently experienced by the Company's customers primarily as a
result of the Medicare Prospective Payment System implementation. The
acquisition items encountered pertain to specific accounts receivable
collectibility issues identified relating to previous utilization of "legacy"
systems, and other nonrecurring issues which have resulted in potentially
uncollectible accounts receivable.

During the fourth quarter of fiscal 1999, the Company adopted a new plan of
restructuring to consolidate certain pharmacy sites in similar geographies. The
plan is a continuation of the plan adopted in fiscal 1998 to combine pharmacies
in close proximity in order to improve operating efficiencies. As a result of
the new exit plan, 4 additional pharmacy sites were consolidated into either a
new or existing location as of September 30, 1999. During the year ended June
30, 1999, the Company recorded nonrecurring charges of $4.7 million, before tax,
related to the new site consolidations and additional costs incurred on the site
consolidations announced in the prior year.

The remaining $3.4 million of the nonrecurring charge primarily relates to
severance incurred during the fourth quarter associated with the Company's
expense reduction initiatives, additional acquisition related and other
miscellaneous expenses.

Employee severance costs included in the nonrecurring charge relate to the
termination of 120 employees.

                                       11
<PAGE>   12
Details of the fourth quarter fiscal 1999 special and nonrecurring charge,
related activity and reserve balance are as follows:

<TABLE>
<CAPTION>
                                                        Nonrecurring               Reserve                 Reserve
            Description                Cash/Non-cash       Charge      Activity   At 6/30/99   Activity   At 9/30/99
            -----------                -------------    ------------   --------   ----------   --------   ----------
                                                        (In millions)
<S>                                    <C>              <C>            <C>        <C>          <C>        <C>
Site Consolidations
     Severance/compensation related    Cash                 $ 2.1       $ (1.5)      $ .6        $(.4)       $.2
     Lease terminations                Cash                    .6          (.1)        .5         (.2)        .3
     Asset impairments                 Non-cash               1.5         (1.5)        --          --         --
     Other                             Cash                    .5          (.5)        --          --         --

Special increase to allowance
     for doubtful accounts             Non-cash              32.4        (32.4)        --          --         --

Other                                  Cash                   3.4         (2.7)        .7         (.3)        .4
                                                            -----       ------       ----        ----        ---

Total                                                       $40.5       $(38.7)      $1.8        $(.9)       $.9
                                                            =====       ======       ====        ====        ===
</TABLE>


During the fourth quarter of fiscal 1998, the Company recorded a nonrecurring
charge of $8,900,000 primarily related to: 1) the Company adopting a formal plan
of restructuring to consolidate certain pharmacy sites in similar geographies;
2) the buyout of existing employment agreements with the prior owners of certain
acquired businesses; 3) the write-off of certain financing fees; and 4)
additional acquisition related expenses.

The Company adopted a formal plan of restructuring that will combine pharmacies
in close geographical proximity in order to improve operating efficiencies. As a
result of the plan, 17 pharmacy sites will be consolidated into either new or
existing locations and an estimated total of 149 employees will be terminated as
a result of the plan. As of September 30, 1999, 14 site consolidations were
completed with the remainder expected to be completed by the end of fiscal 2000.

Details of the fourth quarter fiscal 1998 nonrecurring charge, related activity
and reserve balance are as follows:

<TABLE>
<CAPTION>
                                                        Nonrecurring               Reserve                 Reserve
            Description                Cash/Non-cash       Charge      Activity   At 6/30/99   Activity   At 9/30/99
            -----------                -------------    ------------   --------   ----------   --------   ----------
                                                        (In millions)
<S>                                    <C>              <C>            <C>        <C>          <C>        <C>
Site Consolidations
     Severance packages                Cash                 $ .5        $ (.5)        $--        $ --        $--
     Lease terminations                Cash                   .7          (.4)         .3         (.1)        .2
     Asset impairments                 Non-cash              3.5         (3.5)         --          --         --
     Other                             Cash                   .6          (.6)         --          --         --

Buyout of employment agreements        Cash                   .9          (.8)         .1          --         .1

Write-off financing fees               Non-cash              1.3         (1.3)         --          --         --

Other
     Cash                                                    1.0          (.9)         .1         (.1)        --
     Non-cash                                                 .4          (.4)         --          --         --
                                                            ----        -----         ---        ----        ---

Total                                                       $8.9        $(8.4)        $.5        $(.2)       $.3
                                                            ====        =====         ===        ====        ===
</TABLE>

Liquidity and Capital Resources

Net cash provided by operating activities was $6,776,000 for the three months
ended September 30, 1999, as compared to net cash used in operating activities
of $19,838,000 during the comparable period in fiscal 1999. The increase in net
cash provided by operating activities was primarily due to a slower growth rate
in accounts

                                       12
<PAGE>   13
receivable and refunds received from federal and state income tax authorities.
The slower growth rate in accounts receivable from June 30, 1999 is mainly
attributable to slower internal sales growth during the three months ended
September 30, 1999, as compared to the three months ended June 30, 1999.
Additionally, some accounts receivable growth is attributable to slower payment
trends by customers as a result of PPS implementation.

Net cash used in investing activities decreased to $4,082,000 during the three
months ended September 30, 1999, as compared to $8,456,000 during the comparable
period in fiscal 1999. The decrease is primarily the result of reduced cash
outlays for information system equipment and building leasehold improvements.
The reduced levels of capital expenditures were achieved as a result of
decreased activity in the conversion of sites to a common operating system and
fewer build-outs required as the majority of the physical infrastructure of the
Company has been completed. To date, conversion to the common operating system,
Concord DX, has been implemented in over 80% of the Company's customer base.

Net cash used in financing activities increased to $11,762,000 during the three
months ended September 30, 1999, from net cash provided by financing activities
of $24,950,000 during the comparable period in fiscal 1999. The increase in cash
used in financing activities is a result of the Company's efforts to pay down
the outstanding revolving credit facility balance using positive cash flow
generated from operating activities and decreasing cash reserves.

In August 1997, the Company issued $100 million of convertible subordinated
debentures due 2004. The debentures carry an interest rate of 5 3/4%. The
debentures are obligations of the Company. The operations of the Company are
currently conducted principally through subsidiaries, which are separate and
distinct legal entities. The Company's ability to make payments of principal and
interest on the debentures will depend on its ability to receive distributions
of cash from its subsidiaries. Each of the Company's wholly-owned subsidiaries
has guaranteed the Company's payment obligations under the debentures, so long
as such subsidiary is a member of an affiliated group (within the meaning of
Section 279(g) of the Internal Revenue Code of 1986, as amended) that includes
the Company. The satisfaction by the Company's subsidiaries of their contractual
guarantees, as well as the payment of dividends and certain loans and advances
to the Company by such subsidiaries, may be subject to certain statutory or
contractual restrictions, are contingent upon the earnings of such subsidiaries
and are subject to various business considerations.

The Company expects to meet future financing needs principally through the use
of its $235 million revolving credit facility. The Credit Facility bears
interest at a variable rate based upon the Eurodollar rate plus a spread of 150
to 275 basis points, dependent upon the Company's ratio of Total Funded Debt to
EBITDA. The Company believes that its cash and available sources of capital,
including funds available under its revolving credit facility, are sufficient to
meet its normal operating requirements.

Certain Regulatory Investigations and Legal Proceedings

In the ordinary course of its business, the Company is subject to inspections,
audits, inquiries and similar actions by governmental authorities responsible
for enforcing the laws and regulations to which the Company is subject.

In January 1997, governmental authorities requested information from the Company
in connection with an audit and investigation of the circumstances surrounding
the apparent drug-related homicide of a non-management employee of one of the
Company's pharmacies. The information provided relates to the Company's
inventory and the possible theft of controlled substances from this pharmacy.
The review identified inadequacies in record keeping and inventory control at
this pharmacy. In a meeting with governmental authorities in August 1997, the
Company discussed its findings and those of the government and documented
corrective measures taken by the Company. In September 1998, the Company was
notified by the United States Department of Justice, United States Attorney for
the Southern District of Indiana ("USA-Indiana") that the United States Drug
Enforcement Administration had referred this matter to the Office of the
USA-Indiana for possible legal action involving certain numerous alleged
violations of federal law. The USA-Indiana invited the Company to contact the
Office of the USA-Indiana in an effort to resolve the matter. The Company
subsequently contacted the Office of the USA-Indiana, discussions regarding a
possible settlement of this matter ensued and are currently proceeding. No
specific settlement terms or amounts have yet been agreed upon by the parties.

                                       13
<PAGE>   14
In January 1998, federal and state government authorities sought and obtained
various documents and records from a Herrin, Illinois pharmacy operated by a
wholly-owned subsidiary of the Company. The Company has cooperated fully and
continues to cooperate fully with the government's inquiry. In June 1999,
representatives of the Company met with attorneys with the Civil and Criminal
Divisions of the Office of the United States Department of Justice, United
States Attorney for the Southern District of Illinois ("USA-Illinois") regarding
the government's investigation. The USA-Illinois informed the Company that it
had information that allegedly substantiated numerous violations of federal law,
but the Company has not received any written notification of these allegations.
Discussions regarding the government's investigation have ensued and are
currently proceeding between representatives of the USA-Illinois and the
Company.

It is possible that the imposition of significant fines or other remedies in
connection with the resolution of either of these matters could have a material
effect on the Company's financial condition and results of operations.

On June 7, 1999, a lawsuit was filed against the Company in the Superior Court
of Norfolk County, Massachusetts. Plaintiffs are certain selling stockholders of
the PharmaSource Group, Inc. ("PharmaSource"), which NCS acquired on September
17, 1997. The complaint alleges breach of contract and unfair business practices
arising out of NCS' non-payment of certain amounts allegedly payable under the
terms of an earn-out provision included in the acquisition agreement. Plaintiffs
seek to compel payment of NCS stock worth $17,385,223 based on the preliminary
earn-out calculation. NCS disputes the amount of the earn-out claim by the
plaintiffs.

Under the terms of the earn-out arrangement, amounts payable under the earn-out
are to be paid through the issuance of additional shares of Class A Common
Stock. If on the first anniversary of the date of issuance of the earn-out
shares, the per share price of the Company's Class A Common Stock is less than
$17.225 per share, then the Company will be required to issue additional shares
to compensate for the difference in value.

The Court held a pretrial hearing on October 4, 1999, at which time the court
set a discovery schedule and order concerning the progression of the
proceedings. Discovery closes on April 14, 2000 and dispositive motions are due
on April 28, 2000. Trial has been set for June of 2000. NCS strongly believes
that it has meritorious defenses against the claim of the plaintiffs and
believes the earn-out, if any, is substantially less than the amount claimed by
the plaintiffs.

Year 2000 Readiness Disclosure

Computer systems in use after the beginning of the year 2000 will need to accept
four-digit entries in the date code field in order to distinguish 21st century
dates from 20th century dates. Consequently, many companies face significant
uncertainties because of the need to upgrade or replace their currently
installed computer systems to comply with such "Year 2000" requirements. Various
systems could be affected ranging from complex information technology ("IT")
computer systems to non-IT devices, such as an individual machine's programmable
logic controller.

The Company has reviewed all significant current and planned internal IT systems
and believes these systems are Year 2000 compliant. However, there can be no
assurance that coding errors or other defects will not be discovered in the
future. The Company is currently in the process of reviewing and assessing all
significant non-IT devices for Year 2000 compliance. The Company expects to
complete the process for review and assessment, device testing and resolution of
noncompliance issues, if any, by November 30, 1999.

The Company is currently determining the extent to which it may be impacted by
any third parties' failure to remediate their own Year 2000 issues. The Company
is assessing and reviewing relationships with all significant customers,
suppliers, payors and other third parties to determine the extent, if any, to
which the Company could be impacted by those third-parties' failure to remediate
their own Year 2000 issues. The Company expects to complete this review and
assessment by November 30, 1999. At this stage of the review no assurance can be
given that the failure by one or more third parties to become Year 2000
compliant will not have a material adverse impact on its operations.

                                       14
<PAGE>   15
The Company intends to develop contingency plans for significant third parties'
determined to be at high risk of noncompliance or business disruption before
November 30, 1999. The contingency plans will be developed on a case-by-case
basis. Judgments regarding contingency plans are themselves subject to many
variables and uncertainties. There can be no assurance that the Company will
correctly anticipate the level, impact or duration of noncompliance by third
parties, or that its contingency plan will be sufficient to mitigate the impact.

Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. Nevertheless, since it is not
possible to anticipate all future outcomes, especially when third parties are
involved, there could be circumstances in which the Company's operations could
be interrupted. If the federal and state healthcare reimbursement agencies or
their intermediaries fail to implement Year 2000 compliant technologies before
December 31, 1999, a significant cash flow problem may result. In addition,
disruptions in the economy in general resulting from Year 2000 issues could also
adversely impact the Company.

The majority of costs related to Year 2000 readiness issues have been and will
be expensed as incurred and are expected to be funded through operating cash
flows. Through the first quarter of fiscal 2000 costs related to the Year 2000
issue have been immaterial to the financial results of the Company. Future costs
related to Year 2000 issues are also expected to be immaterial to the financial
results of the Company. Estimates of costs are based on currently available
information and developments may occur that could increase the costs related to
Year 2000 issues.


Disclosure Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Quarterly
Report on Form 10-Q, including, but not limited to, those regarding the
Company's financial position, business strategy, Year 2000 readiness disclosure
and other plans and objectives for future operations and any other statements
that are not historical facts constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the actual results, performance or
achievements of the Company, or industry results, to differ materially from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have
expected effects on its business or operations. Among the factors that could
cause actual results to differ materially from the Company's expectations
include continuation of various trends in the long-term care market (including
the trend toward consolidation and the impact of the Balanced Budget Act of
1997), competition among providers of long-term care pharmacy services, the
availability of capital for capital requirements, changes in regulatory
requirements, reform of the health care delivery system, litigation, disruption
to the operations of the Company resulting from Year 2000 issues and other
factors.

                                       15
<PAGE>   16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks from transactions that are
entered into during the normal course of business. The Company has not entered
into derivative financial instruments for trading purposes. The Company's
primary market risk exposure relates to interest rate risk. The Company has
managed its interest rate risk by balancing its exposure between fixed and
variable rates while attempting to minimize its interest costs. The Company has
a balance of $203,120,000 on its revolving credit facility at September 30,
1999, which is subject to a variable rate of interest based on the Eurodollar
rate. Assuming borrowings at September 30, 1999, a one-hundred basis point
change in interest rates would impact net interest expense by approximately
$2,031,200 per year.

                                       16
<PAGE>   17
PART II. OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  Exhibit
                  Numbers                        Exhibit
                  -------                        -------

                    10.1    Amendment No. 3, dated August 3, 1999, to the Credit
                            Agreement dated as of June 1, 1998 , among the
                            Company and the Lenders named therein, NBD Bank and
                            National City Bank, as co-agents, and KeyBank
                            National Association, as a Lender, the Swing Line
                            Lender, the Letter of Credit issuer and as
                            Administrative Agent. (A)

                    10.2    Security Agreement, dated August 3, 1999, among the
                            Company, its subsidiaries and KeyBank National
                            Association. (A)

                    10.3    Form of Salary Continuation Agreement, dated July
                            20, 1999, between the Company and each of Thomas B.
                            Mangum, J. Patrick Morris, Marvin R. Richardson, and
                            Gerald D. Stethem.

                    27.1    Financial Data Schedule

             (A)  Incorporated herein, by reference to the appropriate exhibit
                  to the Company's Annual Report on Form 10-K for the year
                  ended June 30, 1999.

         (b)      Reports on Form 8-K:

                  No reports on Form 8-K were filed during the three months
                  ended September 30, 1999.

                                       17
<PAGE>   18
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.


                                               NCS HealthCare, Inc.
                                                  (Registrant)

Date:     November 15, 1999              By /s/ Kevin B. Shaw
                                         ----------------------------------
                                         Kevin B. Shaw
                                         President, Chief Executive Officer
                                         and Director


Date:     November 15, 1999              By /s/ William B. Byrum
                                         ----------------------------------
                                         William B. Byrum
                                         Chief Operating Officer


Date:     November 15, 1999              By /s/ Gerald D. Stethem
                                         ----------------------------------
                                         Gerald D. Stethem
                                         Chief Financial Officer

                                       18