<PAGE>   1



                                  UNITED STATES
                       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 October 31, 1999

                                       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 0-28072

                      West Coast Entertainment Corporation
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                        04-3278751
         ------------                                    --------------
(State or other jurisdiction of                     (I.R.S. Employer I.D. No.)
incorporation or organization)


One Summit Square, Suite 200, Rte. 413 & Doublewoods Rd.
Langhorne, Pennsylvania                                             19047
--------------------------------------------------------          ----------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:  (215)968-4318
                                                     -------------

       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) had 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 at December 15 ,1999
             -----                             --------------------------------
       Common Stock, $.01                                  14,109,696
       par value per share




<PAGE>   2


<TABLE>


                                      INDEX



<S>            <C>                                                              <C>
Part I.        -  Financial Information                                         Page No.

     Item 1.   -  Financial Statements

               Consolidated Balance Sheets -
                  As of October 31, 1999 and January 31, 1999                      3

               Consolidated Statements of Operations- Quarters Ended
                  October 31, 1999 and November 1, 1998
                  Three Quarters Ended October 31, 1999 and November 1, 1998       4

               Consolidated Statements of Cash Flows-
                  Three Quarters Ended October 31, 1999 and November 1, 1998       5

               Consolidated Statement of Stockholders Equity-
                  As of October 31, 1999 and January 31, 1999                      6

               Notes to Consolidated Financial Statements                          7

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

     Item 3.   Quantitative and Qualitative Disclosure about Market                15



Part II.       - Other Information                                                 15

     Item 1.   - Legal Proceedings
     Item 2.   - Changes in Securities
     Item 3.   - Defaults Upon Senior Securities
     Item 4.   - Submission of Matters to a Vote of the Security Holders
     Item 5.   - Other Information
     Item 6.   - Exhibits and Reports on Form 8-K

</TABLE>



                                       2
<PAGE>   3

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT PAR VALUE)
<TABLE>
<CAPTION>

                                                                                     JANUARY             OCTOBER
                                                                                        31,                 31,
                                                                                       1999                1999
                                                                                    ---------           ---------
                                     ASSETS
<S>                                                                                 <C>                 <C>
Current assets:
  Cash ...................................................................          $   2,424           $   1,459
  Accounts receivable and other receivables (net of allowance for doubtful
  accounts of $ 67 and $ 8 at January 31, 1999 and October 31, 1999,
  respectively)...........................................................              1,512                 941
  Merchandise inventory ..................................................              8,404               9,005
  Market development funds and co-op receivable ..........................              1,242                 747
  Receivables from officers ..............................................                373                 383
  Prepaid expenses and other current assets ..............................                472                 382
                                                                                    ---------           ---------
   Total current assets ..................................................             14,427              12,917

Videocassette rental inventory, net  (Note 2), ...........................             20,375              19,812
Furnishings, equipment and leasehold improvements, net ...................             17,892              16,737
Intangible assets (net of accumulated amortization of $ 16,497 and $21,336
   at January 31, 1999 and October 31,1999, respectively) ................            110,530             105,429
Other assets .............................................................              2,456               1,307
                                                                                    ---------           ---------


   Total assets ..........................................................          $ 165,680           $ 156,202
                                                                                    =========           =========


            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt (Note 3) .............................          $   8,081           $  69,350
  Accounts payable .......................................................             14,659              15,276
  Accrued expenses .......................................................              7,783              11,577
  Income taxes payable ...................................................                655                 848
                                                                                    ---------           ---------
     Total current liabilities ...........................................             31,178              97,051
Long-term debt (Note 3) ..................................................             58,187                  --
Other Liabilities ........................................................                 59                  29
                                                                                    ---------           ---------

Total Liabilities ........................................................             89,424              97,080
                                                                                    =========           =========

Commitments and contingencies ............................................                 --                  --

Stockholders' equity:
Common stock ($0.01 par value; 14,185 shares as of January 31, 1999 of
which 14,073 shares were outstanding and 20 shares were to be issued
and 14,210 shares as of October 31, 1999 of which 14,098 shares were
outstanding and 20 shares were to be issued) ...................................          142                 142
   Preferred stock ($0.01 par value, 2,000 shares authorized, no shares
     issued) .............................................................                 --                  --
   Additional paid-in capital ............................................            104,093             104,100
   Accumulated (deficit) .................................................            (27,737)            (44,878)

   Treasury stock (92 shares of common stock, at cost) ...................               (242)               (242)
                                                                                    ---------           ---------
     Total stockholders' equity ..........................................             76,256              59,122
                                                                                    ---------           ---------
     Total liabilities and stockholders' equity ..........................          $ 165,680           $ 156,202
                                                                                    =========           =========

</TABLE>


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




                                       3
<PAGE>   4



                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                                                                                    THREE              THREE
                                                                      QUARTER        QUARTER      QUARTERS           QUARTERS
                                                                       ENDED          ENDED         ENDED              ENDED
                                                                        NOV 1,        OCT 31,       NOV 1,             OCT 31,
                                                                        1998           1999          1998               1999
                                                                      --------       --------      --------           --------
<S>                                                                   <C>            <C>           <C>                <C>
Revenues:
  Rental revenue ...........................................          $ 22,711       $ 21,133      $ 73,904           $ 66,531

  Merchandise sales ........................................             4,828          2,835        14,277              9,256
  Franchise fees ...........................................               269             95         1,900                704
                                                                      --------       --------      --------           --------
                                                                        27,808         24,063        90,081             76,491
                                                                      --------       --------      --------           --------
Costs and expenses:
  Store operating expenses .................................            14,829         12,139        42,939             37,906
  Cost of goods sold .......................................             4,063          2,411        10,746              6,880
  Amortization  of video cassette rental inventory..........             7,077          4,512        19,741             16,227
  Revenue sharing expense ..................................                --          3,068            --              6,991
   General  and administrative .............................             4,343          4,082        11,613             12,751
  Amortization of intangible ...............................             1,613          1,646         4,878              4,934
  Store Closing Charge (Note 4) ............................             5,557             --         5,557                 --
                                                                      --------       --------      --------           --------

                                                                        37,482         27,858        95,474             85,689


Income  from Operations.....................................            (9,674)        (3,795)       (5,393)            (9,198)

Interest Expense ...........................................             1,587          2,591         4,852              7,853
Other Expense ..............................................               164            (21)          308                 10
                                                                      --------       --------      --------           --------
Income (loss) before raxes..................................           (11,425)        (6,365)      (10,553)           (17,061)
Income taxes ...............................................              (634)            --            --                 80
                                                                      --------       --------      --------           --------
Net income .................................................           (10,791)        (6,365)      (10,553)           (17,141)
                                                                      ========       ========      ========           ========

Income (loss) per common share data:
  Net income (loss) - basic and diluted ....................          $  (0.76)      $  (0.45)     $  (0.75)          $  (1.22)
                                                                      ========       ========      ========           ========
Weighted average number of common shares
outstanding ................................................            14,160         14,110        14,154             14,097
                                                                      ========       ========      ========           ========
</TABLE>


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



                                       4
<PAGE>   5

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                  THREE QUARTERS ENDED
                                                               NOV. 1,           OCT. 31,
                                                                1998               1999
                                                              --------           --------
Cash flows from operating activities:

<S>                                                           <C>                <C>
  Net income (loss) ................................          $(10,553)          $(17,141)
  Adjustments to reconcile net income (loss) to cash
flows provided by
     operating activities:
     Amortization of debt financing costs ..........               282                828
     Amortization of videocassette rental inventory             19,741             16,227

     Depreciation and amortization of furnishings,
     equipment and leasehold improvements ..........             2,361              2,736
     Amortization of intangible assets .............             4,878              5,101
     Store Closing Change (Note 4) .................             5,557                 --
     Changes in assets and liabilities:
     Accounts receivable ...........................               203               1066

     Merchandise inventory .........................            (1,359)              (601)
     Prepaid expenses and other assets .............              (140)               401
     Accounts payable ..............................             2,594                617
     Accrued expenses and other liabilities ........               545              3,764
      Income taxes payable .........................             1,006                193
                                                              --------           --------
     Net cash provided by operating activities .....            25,115             13,191
                                                              --------           --------

Cash flows related to investing activities:

  Purchases of property and equipment ..............            (2,570)            (1,581)
  Purchases of videocassette rental inventory ......           (22,864)           (15,664)
                                                              --------           --------
       Net cash used in investing activities .......           (25,434)           (17,245)
                                                              --------           --------

Cash flows related to financing activities:

  Proceeds from debt ...............................               162              3,082
  Purchase of treasury stock .......................              (242)                --
  Repayments of debt ...............................                (6)                --
  Proceeds from issuance of common stock ...........                26                  7
                                                              --------           --------
Net cash provided by (used in) financing activities                (60)             3,089
                                                              --------           --------
Net increase (decrease) in cash ....................              (379)              (965)
Cash, beginning of period ..........................             2,604              2,424
                                                              --------           --------
Cash, end of period ................................          $  2,225           $  1,459
                                                              ========           ========

Supplemental cash flow data:

  Interest paid ....................................          $  4,376           $  4,444
                                                              ========           ========
  Income taxes paid ................................          $    219           $     31
                                                              ========           ========

</TABLE>

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


                                       5
<PAGE>   6



                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                                                                       TOTAL
                                                                        ADDITIONAL                                     STOCK-
                                                 COMMON STOCK            PAID-IN        ACCUMULATED     TREASURY      HOLDERS'
                                             SHARES        AMOUNT        CAPITAL         (DEFICIT)       STOCK         EQUITY
                                           ----------    ----------     ---------       -----------    ----------    ----------
<S>                                        <C>               <C>         <C>                <C>                        <C>
Balance at January 31, 1998 .....          13,843,106           138       104,063              (520)           --       103,681
Shares issued - Employee Stock
Purchase Plan ...................              39,506             1            33                --            --            34
Shares issued - 1996 acquisitions             302,065             3            (3)               --            --            --
Treasury stock,  at cost ........                  --            --            --                --          (242)         (242)
Net (loss) ......................                  --            --            --           (27,217)           --       (27,217)
                                           ----------    ----------     ---------       -----------    ----------    ----------
Balance at January 31, 1999 .....          14,184,677           142       104,093           (27,737)         (242)       76,256
Shares issued - Employee Stock
Purchase Plan ...................              24,992            --             7                --            --             7
Net (loss .......................                  --            --            --           (17,141)           --       (17,141)
                                           ----------    ----------     ---------       -----------    ----------    ----------
Balance at January 31, 1999 .....          14,209,669          $142     $ 104,000          $(44,878)        $(242)    $  59,122
                                           ==========    ==========     =========       ===========    ==========    ==========
</TABLE>

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



                                       6
<PAGE>   7


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 31, 1999 (unaudited)


1        Basis of Presentation

         The accompanying consolidated financial statements have been prepared
         assuming West Coast Entertainment Corporation and subsidiaries
         (collectively the "Company") will continue as a going concern. As
         discussed in Note 3, the Company has approximately $69.4 million of its
         debt maturing by February 15, 2000.

         Although the Company believes that its projected cash flow as well as
         additional borrowings under the Revised Facility will be sufficient to
         meet its operating needs until the debt maturity date mentioned above,
         there can be no assurances beyond that date.

         While the Company is continuing to monitor and reduce its operating
         expenses, including payroll, it has also entered into an agreement and
         plan of merger with Video City Inc.

         On August 2, 1999 the Company announced that it has signed a definitive
         Merger Agreement with Video City Inc. (OTC-BB: VDCT). The terms of the
         transaction call for each West Coast Entertainment shareholder to
         receive .33 shares of Video City common stock (subject to adjustments
         under certain conditions) and .05 shares of Video City series F
         preferred stock ($25 stated value) for each share of West Coast
         Entertainment stock held by stockholders. The Merger Agreement is
         subject to stockholder approval of both companies, and is currently
         anticipated to be completed some time in the first quarter of fiscal
         2001.

         The obligations of the Company and Video City to consummate the merger
         are subject to the satisfaction of certain conditions, including, but
         not limited to, obtaining requisite approvals of the stockholders for
         the Company and Video City, obtaining consents under their respective
         bank credit agreements (for the Company, a consent under and/or a
         modification of the Credit Facility), obtaining adequate financing,
         obtaining requisite regulatory approvals (under the Hart-Scott-Rodino
         Antitrust Improvements Act of 1976, as amended, the "HSR Act" and the
         effectiveness under the securities laws of a registration statement
         which has not yet been filed), and the continuing accuracy, in all
         material respects, as of the effective time of the merger of the
         representations and warranties made by the Company and Video City in
         the Merger Agreement. There can be no assurances that the transaction
         will close.


         The accompanying unaudited consolidated financial statements have been
         prepared in accordance with generally accepted accounting principles
         for interim financial information and pursuant to the rules and
         regulations of the Securities and Exchange Commission ("SEC").
         Accordingly, they do not include all of the information and footnotes
         required by generally accepted accounting principles for complete
         financial statements. For further information, refer to the
         consolidated financial statements and footnotes included in West Coast
         Entertainment Corporation's Form 10-K filed with the SEC on May 16,
         1999.

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenue
         and expenses during the reporting period. Actual results could differ
         from these estimates.

         In the opinion of management, all adjustments necessary for a fair
         presentation of this interim financial information have been included.
         Such adjustments consisted only of normal recurring items. The results
         of operations for the three quarters ended October 31, 1999 are not
         necessarily indicative of the results to be expected for the year
         ending February 6, 2000.



                                       7
<PAGE>   8

         Business

         On April 30, 1998 the Company adopted a fiscal year ending on the first
         Sunday following January 30, which will result in the Company having a
         52 or periodically, a 53 week fiscal year. Results for this fiscal year
         will reflect a 53 week year ending on February 6, 2000. Results for the
         three quarters ended November 1, 1998 and October 31, 1999 reflect a 39
         week period.

         As of October 31, 1999 the Company owned and operated 237 video stores
         and was a franchisor of approximately 125 video stores.


         Earnings Per Share

         Income per common share data has been calculated per Financial
         Accounting Standards Board Statement No. 128 "Earnings Per Share"
         ("SFAS 128"), which requires current and retroactive presentation of
         basic and diluted earnings per share. Basic earnings per share is
         computed by dividing net income by the weighted average number of
         common shares outstanding during the period. Diluted earnings per share
         is computed in a similar manner except that the weighted average number
         of common shares is increased for dilutive potential common shares.
         Potentially dilutive common shares were considered to be anti-dilutive
         for the computation of diluted earnings per share for the quarter and
         three quarters ended October 31, 1999.

2        Videocassette Rental Inventory

         Videocassette rental inventory and related amortization are as follows
         (in thousands):
<TABLE>
<CAPTION>

                                                 January 31, 1999   October 31, 1999
                                                ------------------ ------------------
<S>                                                  <C>                <C>
         Videocassette rental inventory              $ 87,985           $ 103,649
         Accumulated amortization                     (67,610)            (83,837)
                                                     --------           ---------
                                                     $ 20,375           $  19,812
                                                     ========           =========
</TABLE>

         Amortization expense related to videocassette rental inventory totaled
         approximately $16,227,000 and $19,741,000 for the three quarters ended
         October 31, 1999 and November 1, 1998, respectively.


Effective November 2, 1998, the Company adopted a new method of amortizing its
videocassette rental inventory in order to better match an industry change in
the stream of revenues resulting from the new practice of revenue sharing
adopted during 1998 as an alternative to historical business models of directly
purchasing rental titles. Under revenue sharing, the retailer typically incurs
an upfront fee to acquire videocassettes, with an ongoing requirement to share
the revenue generated on a pre-determined percentage over a specific period of
time with the studios. Given the lower cost of product, the retailer has the
additional requirement of acquiring 2 to 4 times the number of copies of a title
than they would have acquired under the prior purchase models. This new practice
is founded upon the slope over time of consumer demand and the related
desirability of titles over time. Under the Company's new method of
amortization, all new release, non-revenue sharing videocassettes, regardless of
the number of copies of a title, will be amortized to a salvage value of $6 over
a period of 6 months. Videocassettes purchased through revenue sharing
agreements will be amortized to the $6 salvage value over the life of the
respective contracts. Studios' share of revenues will be expensed as such
revenues are earned as specified in each agreement.

     Prior to November 2, 1998 videocassette rental inventory, which includes
video games, was stated at cost and amortized as follows: videocassette rental
inventory base stock was amortized over its economic life of 36 months, to its
estimated salvage value of $6. New release base stock (the first three copies
of a

                                       8
<PAGE>   9
title in a particular store), less the $6 salvage value, was amortized 50% in
the first six months, then amortized on a straight-line basis to the $6 salvage
value over the remaining 30 months. All copies of new release videocassette
rental inventory in excess of three copies per store were amortized to $10 on a
straight-line basis during the first nine months, and the balance was then
amortized on a straight-line basis over 27 months to the $6 salvage value. The
unamortized cost, if any, of videocassette rental inventory that was sold was
charged to operations at the time of the sale.



3        Long Term Debt

On December 15, 1997, the Company signed an agreement which incorporated the
major points of, but superceded, its previous bank loan agreement (the "New
Facility"). On June 11, 1998 and September 14, 1998, the Company signed
amendments to the New Facility changing the term of the loan as well as certain
maximum debt-to-operating cash flow ratios and minimum operating cash flow
requirements as defined, as well as modifying certain permitted capital and
other expenditures.

On January 12, 1999, the Company signed an amendment to the New Facility (the
"Revised Facility") increasing the Bank's commitment by $5 million (the
"Overadvance") to a total of $70 million as well as providing for certain credit
enhancements. The Revised Facility is a non-revolving loan maturing on February
15, 2000. At October 31, 1999, the Company had no available funds under the
Revised Facility.

On October 22, 1999 the Company entered into a fourth amendment to the Revised
Facility increasing the Overadvance to $9,500,000 and eliminating the commitment
reductions originally scheduled for October 31, 1999, November 1, 1999 and
February 1, 2000. The full amount of both the Credit Facility and the
Overadvance are due February 14, 2000.

The first $65 million of the Revised Facility bears interest at 5% above the
Prime rate (12.75% at October 31, 1999). The interest rate on the Overadvance is
equal to the Prime rate plus 5.5% (13.25% at October 31, 1999. In addition,
Commitment Extension Fees equaling 143 basis points times the total outstanding
debt will be due and payable each month as of July 1, 1999 through February 15,
2000 should the debt remain unpaid as of August 31, 1999, subject to certain
conditions.

The Revised Facility also provided for delivery to the agent on behalf of the
banks of a warrant to purchase, in the event that the all debt is not paid in
full by September 30, 1999, subject to certain conditions, up to 5% of the
Company's capital stock at a price equal to 75% of the average price of the
stock during the 15 days prior to July 1, 1999. As of December 29, 1999, this
warrant has not been exercised.

The Revised Facility is secured by a first security interest in substantially
all of the Company's assets, including the stock of its subsidiaries, and
provides for certain restrictive covenants, including those of a financial
nature.



4        Store Closing Charges

During the quarter ended November 1, 1998, the Company began and completed an
extensive analysis of its base store performance and made a decision to close 33
of its stores. This analysis resulted in the Company recording charges of
approximately $5,557,000. The components of the charges included approximately
$3,100,000 for lease terminations and miscellaneous closing costs, as well as
approximately $2,457,000 in property asset write downs.


                                       9
<PAGE>   10


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

         SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS. Certain statements in this
         Report on Form 10-Q, under the captions "Management's Discussion and
         Analysis of Financial Condition and Results of Operations," and
         elsewhere relate to future events and expectations and as such
         constitute "forward-looking statements." The Company desires to take
         advantage of the "safe harbor" provisions of the Private Securities
         Litigation Reform Act of 1995 and in that regard is cautioning the
         readers of this Report that the following important factors, among
         others, could affect the Company's actual results of operations and may
         cause changes in the Company's strategy with the result that the
         Company's operations and results may differ materially from those
         expressed in any forward looking statements made by, or on behalf of,
         the Company. For this purpose, any statements contained herein that are
         not statements of historical fact may be deemed to be forward-looking
         statements. Without limiting the generality of the foregoing, the words
         "believes," "anticipates," "plans," "expects," and similar expressions
         are intended to identify forward-looking statements. Such
         forward-looking statements involve known and unknown risks,
         uncertainties and other factors which may cause the actual results,
         performance or achievements of the Company to be materially different
         from any future results, performance or achievements expressed or
         implied by such forward-looking statements. Such factors include, among
         other things, the following considerations, as well as those factors
         set forth under the caption "Liquidity and Capital Resources."

         On August 2, 1999 the Company announced that it has signed a definitive
         Merger Agreement with Video City Inc. (OTC-BB: VDCT). The terms of the
         transaction call for each West Coast Entertainment shareholder to
         receive .33 shares of Video City common stock (subject to adjustments
         under certain conditions) and .05 shares of a series F preferred stock
         ($25 stated value) for each share of West Coast Entertainment stock
         held by stockholders. The Merger Agreement is subject to stockholder
         approval of both companies, and is currently anticipated to be
         completed some time in the first quarter of fiscal 2001.

         The obligations of the Company and Video City to consummate the merger
         are subject to the satisfaction of certain conditions, including, but
         not limited to, obtaining requisite approvals of the stockholders for
         the Company and Video City, obtaining consents under their respective
         bank credit agreements (for the Company, a consent under and/or a
         modification of the Revised Facility), obtaining adequate financing,
         obtaining requisite regulatory approvals (under the Hart-Scott-Rodino
         Antitrust Improvements Act of 1976, as amended, the "HSR Act" and the
         effectiveness under the securities laws of a registration statement
         which has not yet been filed), and the continuing accuracy, in all
         material respects, as of the effective time of the merger of the
         representations and warranties made by the Company and Video City in
         the Merger Agreement. There can be no assurances that the transaction
         will close.


         RESULTS OF OPERATIONS

         Quarter ended October 31, 1999 compared to Quarter ended November 1,
         1998

         Revenues. Revenues decreased $3.7 million, or 13.5%, from $27.8 million
         for the quarter ended November 1, 1998 to $24.1 million for the quarter
         ended November 1, 1999. This change consisted of a decrease of $1.6
         million in rental revenues, a decrease of $2.0 million in merchandise
         sales and a decrease of $0.2 million in franchise fee revenue. The
         decreases in store rental and merchandise sales revenues of $3.6
         million are attributable to a lower weighted average number of stores
         owned (after closing underperforming stores primarily in the fourth
         quarter of the fiscal year ending January 31, 1999) which decreased by
         23 stores from 265 stores owned during the quarter ended November 1,
         1998 to 242 stores owned during the quarter ended October 31, 1999 and
         accounted for $2.4 million of the total decrease. In addition, a
         decrease in average per store revenues accounted for the remaining
         decrease of $1.3 million in store revenues.

             Rental revenues decreased $1.6 million, or 6.9%, from $22.7 million
         for the quarter ended November 1, 1998 to $21.1 million for the quarter
         ended October 31, 1999. This decrease is primarily attributable to the
         closing of underperforming stores during the fourth quarter of the last
         fiscal year and, the resulting

                                       10
<PAGE>   11

         decrease in weighted average number of stores owned as discussed above.
         This decrease in stores owned accounted for $2.0 million of the
         decrease offset by an increase of $0.4 million relating to an increase
         in average store rental revenues.

                  Merchandise and other sales decreased $2.0 million, or 41.3%,
         from $4.8 million for the quarter ended November 1, 1998 to $2.8
         million for the quarter ended October 31, 1999. This decrease is
         attributable to the closing of underperforming stores during the fourth
         quarter of the last fiscal year as described above which caused
         merchandise and other sales to decrease by $0.4 million. The remaining
         $1.6 million decrease is due to lower merchandise and other sales as a
         result of lower store inventory levels, and the impact of Titanic which
         was priced as a sell through title and released September 1, 1998.

                  Franchise fee revenues decreased $0.2 million, or 64.7%, from
         $0.3 million for the quarter ended November 1, 1998 to $0.1 million for
         the quarter ended October 31, 1999. This decrease is attributable to a
         decline in the number of operating franchisees.

                  Store Operating Expenses. Store operating expenses decreased
         $2.7 million, or 18.1%, from $14.8 million for the quarter ended
         November 1, 1998 to $12.1 million for the quarter ended October 31,
         1999. A decrease of approximately $1.3 million caused by the closing of
         underperforming stores during the fourth quarter of the last fiscal
         year as described above. The remaining decrease of $1.4 million was
         primarily caused by lower occupancy costs and advertising expense.

                  Cost of Goods Sold. Costs of goods sold decreased $1.6
         million, or 39.6 %, from $4.0 million for the quarter ended November 1,
         1998 to $2.4 million for the quarter ended October 31, 1999. Of this
         decrease, $0.4 million is related to lower merchandise and other sales
         caused by the closing of underperforming stores during the fourth
         quarter of the last fiscal year as previously discussed. The remaining
         $1.2 million decrease is related to lower merchandise and other sales.
         As a percentage of merchandise sales, cost of goods increased 1.0
         percentage points from 84% for the quarter ended November 1, 1998 to
         85% for the quarter ended October 31, 1999.

                  Amortization of Videocassette and Video Game Rental Inventory.
         Amortization of rental inventory decreased $2.6 million, or 36.3 %,
         from $7.1 million for the quarter ended November 1, 1998 to $4.5
         million for the quarter ended October 31, 1999, primarily as a result
         of the Company entering into revenue sharing agreements with studios.
         Without the effects of revenue sharing, amortization expense would have
         increased due to the reduction of estimated life of tapes established
         through the change in amortization method as discussed in Note 2 of the
         consolidated financial statements.

                  Revenue Sharing Expense. Revenue sharing expense was $3.1
         million for the quarter ended October 31, 1999 as compared to no
         revenue sharing expense for the quarter ended November 1, 1998. The
         Company entered into revenue sharing agreements with studios as more
         fully discussed in Note 2 to the consolidated financial statements.

                  Selling, General and Administrative Expense. Selling, general
         and administrative expenses decreased $0.2 million or 6%, from $4.3
         million for the quarter ended November 1, 1998 to $4.1 million for the
         quarter ended October 31, 1999. This decrease was primarily caused by a
         decrease in salaries and related employee costs of approximately $0.6
         million along with a decrease in bad debt expense of approximately $0.6
         million offset by an increase in professional fees of approximately
         $0.9 million.

                  Amortization of Intangible Assets. Intangible amortization
         expense remained unchanged at $1.6 million for the quarters ended
         November 1, 1998 and October 31, 1999. As a percentage of total
         revenues, intangible amortization increased 1.0 percentage points from
         5.8% for the quarter ended November 1, 1998 to 6.8% for the quarter
         ended October 31, 1999. This percentage increase is primarily to the
         decline in revenues for reasons discussed above.

                  Interest Expense and Other. Net interest expense and other
         increased $0.8 million, or 46.7%, from $1.8 million for the quarter
         ended November 1, 1998 to $2.6 million for the quarter ended October
         31, 1999. Interest expense comprises almost all this net amount. This
         increase was caused by higher

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<PAGE>   12
         interest rates as a result of the amended credit agreement of January
         12, 1999 as more fully described in Note 3 to the consolidated
         financial statements and by higher levels of borrowings under the
         revised agreement.

                  Net Income (Loss). As a result of the foregoing, net loss
         decreased $4.4 million, from a $10.8 million net loss for the quarter
         ended November 1, 1998 to a $6.4 million net loss for the quarter ended
         October 31, 1999.

         Three quarters ended October 31, 1999 compared to Three quarters ended
         November 1, 1998

                  Revenues. Revenues decreased $13.6 million, or 15.1%, from
         $90.1 million for the three quarters ended November 1, 1998 to $76.5
         million for the three quarters ended October 31, 1999. This change
         reflected a decrease of $7.4 million in rental revenues, a decrease of
         $5.0 million in merchandise sales and a decrease of $1.2 million in
         franchise fee revenue. Approximately $9.2 million of the $12.4 million
         decrease in store rental and merchandise sales revenues was
         attributable to a lower weighted average number of stores owned (after
         closing underperforming stores primarily in the fourth quarter of last
         year ending January 31, 1999) which decreased by 29 stores from 279
         stores owned during the three quarters ended November 1, 1998 to 250
         stores owned during the three quarters ended October 31, 1999. A
         decrease in average per store revenues for the reasons discussed below
         accounted for a decrease of $3.2 million in store revenues.

                  Rental revenues decreased $7.4 million, or 10.0%, from $73.9
         million for the three quarters ended November 1, 1998 to $66.5 million
         for the three quarters ended October 31, 1999. Approximately $7.7
         million of this decrease was primarily attributable to the closing of
         underperforming stores during the fourth quarter of last year and, the
         resulting decrease in weighted average number of stores owned. This was
         offset by a $0.3 million increase relating to an increase in average
         store rental revenues.

                  Merchandise and other sales decreased $5.0 million, or 35.2%,
         from $14.3 million for the three quarters ended November 1, 1998 to
         $9.3 million for the three quarters ended October 31, 1999.
         Approximately $1.5 million of this decrease was attributable to the
         closing of underperforming stores during the fourth quarter of last
         year. The remaining $3.5 million decrease was due to lower merchandise
         and other sales as a result of lower store inventory levels.

                  Franchise fee revenues decreased $1.2 million, or 63.0%, from
         $1.9 million for the three quarters ended November 1, 1998 to $0.7
         million for the three quarters ended October 31, 1999. This decrease is
         attributable to a decline in the number of franchisees and a decrease
         through the sale or settlement of franchise agreements received for the
         three quarters ended November 1, 1998.

                  Store Operating Expenses. Store operating expenses decreased
         $5.0 million, or 11.7%, from $42.9 million for the three quarters ended
         November 1, 1998 to $37.9 million for the three quarters ended October
         31, 1999. A decrease of approximately $4.5 million was caused by the
         closing of underperforming stores during the fourth quarter of last
         year. The remaining decrease of $0.5 million was primarily caused by
         lower occupancy costs and advertising expense.

                  Cost of Goods Sold. Costs of goods sold decreased $3.9
         million, or 36.4%, from $10.7 million for the three quarters ended
         November 1, 1998 to $6.9 million for the three quarters ended October
         31, 1999. Approximately $1.1 million of this decrease is related to
         lower merchandise and other sales caused by the closing of
         underperforming stores during the fourth quarter of last year. The
         remaining $2.8 million decrease was related to lower merchandise and
         other sales caused by a decrease in inventory levels of new movies for
         sale. As a percentage of merchandising sales, cost of goods sold
         remained unchanged at approximately 74.5% for both the three quarters
         ended October 31, 1999 and the three quarters ended November 1, 1998.

                  Amortization of Videocassette and Video Game Rental Inventory.
         Amortization of rental inventory decreased $3.5 million, or 17.8%, from
         $19.7 million for the three quarters ended November 1, 1998 to $16.2
         million for the three quarters ended October 31, 1999, primarily as a
         result of the Company entering

                                       12
<PAGE>   13
         into revenue sharing agreements with studios. Without the effects of
         revenue sharing, amortization expense would have increased due to the
         reduction of estimated life of tapes established through the change in
         amortization method as discussed in Note 2 to the consolidated
         financial statements.

                  Revenue Sharing Expense. Revenue sharing expense was $7.0
         million for the three quarters ended October 31, 1999 as compared to no
         revenue sharing expense for the three quarters ended November 1, 1998.
         The Company entered into revenue sharing agreements with studios as
         more fully discussed in Note 2 to the consolidated financial
         statements.

                  Selling, General and Administrative Expense. Selling, general
         and administrative expenses increased $1.1 million, or 9.8%, from $11.6
         million for the three quarters ended November 1, 1998 to $12.7 million
         for the three quarters ended October 31, 1999. This increase was caused
         by increases in insurance, consulting and professional fees expenses
         offset by a decrease of salaries and bad debt expense. The increase in
         insurance expense was due to recording a retroactive premium for the
         first quarter of the year ended November 1, 1998. The increase in
         professional fees is primarily caused by a legal judgement against the
         Company in which all but $750,000 is believed to be covered by the
         Company's general liability insurance. In addition, the Company
         experienced increased professional fees related to higher legal
         expenses due to costs incurred related to the merger and in fees
         related to negotiation of the merger agreement and amendments to the
         Revised Facility. As a percentage of total revenues, selling, general
         and administrative expenses increased 3.8 percentage points from 12.9%
         for the three quarters ended November 1, 1998 to 16.7% for the three
         quarters ended October 31, 1999 as a result of the legal judgement and
         lower revenues resulting primarily from store closures as previously
         discussed.

                  Amortization of Intangible Assets. Intangible amortization
         expense increased $0.1 million, or 1.1%, from $4.9 million for the
         three quarters ended November 1, 1998 to $4.9 million for the three
         quarters ended October 31, 1999. As a percentage of total revenues,
         intangible amortization increased 1.0 percentage point from 5.4 % for
         the three quarters ended November 1, 1998 to 6.4% for the three
         quarters ended October 31, 1999. This percentage increase was primarily
         attributable to the decline in revenues for reasons discussed above.

                  Interest Expense and Other. Net interest expense and other
         increased $2.7 million, or 52.4%, from $5.2 million for the three
         quarters ended November 1, 1998 to $7.9 million for the three quarters
         ended October 31, 1999. Interest expense comprises almost all this net
         amount. This increase was caused by higher interest rates as a result
         of amending the credit agreement on January 12, 1999 as more fully
         described in Note 3 to the consolidated financial statements and higher
         levels of borrowings under the amended agreement.

                  Net Income (Loss). As a result of the foregoing, net loss
         increased $6.6 million, from $10.6 million of net loss for the three
         quarters ended November 1, 1998 to a $17.1 million net loss for the
         three quarters ended October 31, 1999.

         LIQUIDITY AND CAPITAL RESOURCES

         The accompanying consolidated financial statements have been prepared
         assuming the Company will continue as a going concern. As discussed in
         Note 3 to the consolidated financial statements, the Company has
         approximately $69.4 million of its debt maturing by February 15, 2000.

         Although the Company believes that its projected cash flow and
         additional borrowings under the Revised Facility will be sufficient to
         meet its operating needs until the debt maturity date discussed above,
         there can be no assurances beyond that date.

         For the three quarters ended October 31, 1999, the Company had net cash
         provided by operating activities of $13.2 million, net cash used in
         investing activities of $17.2 million (consisting primarily of cash
         used to purchase videocassette rental inventory of $15.6 million and
         $1.6 million of cash paid for purchases of property and equipment) and
         net cash provided by financing activities of $3.1 million (consisting
         primarily of net borrowings under the Revised Facility, as described in
         Note 3 to the

                                       13
<PAGE>   14

         Consolidated Financial Statements), resulting in a net decrease in cash
         of $1.0 million.

         During the current fiscal year, the Company has financed its operations
         and capital expenditures primarily through available operating cash
         flow, as well as additional borrowings under the Revised Facility.

         On January 12, 1999, the Company signed an amendment to its bank
         agreement increasing the availability under the facility from $65
         million to $70 million as well as providing for certain credit
         enhancements. The amended credit agreement is a non-revolving facility
         maturing February 15, 2000. The bank agreement includes covenants,
         including, but not limited to, minimum operating cash flow, minimum net
         worth, dividend restrictions, and limitations on indebtedness. The
         facility is secured by substantially all of the Company's assets.

         On October 22, 1999 the Company entered into the forth amendment to the
         Revised Facility which increased the Overadvance from $5,000,000 to
         $9,500,000 and eliminated its scheduled commitment reductions due from
         August 1, 1999 through February 1, 2000.

         In the event the debt is not repaid in full, subject to certain
         conditions, prior to September 30, 1999, the banks have the right under
         a warrant agreement to purchase 5% of the Company's common stock at 75%
         of the average market price 15 days prior to July 1, 1999. As of
         December 31, 1999 this warrant has not been exercised.

         On October 7, 1998, the Company received formal notice from NASDAQ that
         its stock would no longer be eligible to be traded through the NASDAQ
         National Market, due to the Company's inability to meet the NASDAQ
         requirement to maintain $4 million of tangible net worth and a $1.00
         bid price, or in the alternative a $5.00 bid price and sales of $50
         million. Currently the Company stock is trading on the OTC Bulletin
         Board.

         During the third quarter of fiscal 1999, the Company implemented a plan
         to close certain under-performing stores, for which it recorded a
         charge of $5.6 million

         The Year 2000 Issue and Capital Commitments. The year 2000 problem is
         the result of computer programs being written using two digits (rather
         than four) to define the applicable year. Any of the Company's programs
         that have time-sensitive software may recognize a date using "00" as
         the year 1900 rather than the year 2000. This could result in system
         failures or miscalculations causing disruptions of operations,
         including, among other things, a temporary inability to process
         transactions, send invoices or engage in similar normal business
         activities. As a result, the computerized systems (including both
         information and non-information technology systems) and applications
         used by the Company are being reviewed, evaluated, and, if and where
         necessary, modified or replaced to ensure that all financial,
         information, and operating systems are Year 2000 compliant.

         The Company upgraded its POS systems in November 1999 in an effort to
         make more detailed data available on a system wide basis in a timely
         manner at a cost of approximately $1.0 million. Such costs will be
         capitalized and amortized over the useful life of the new software. The
         Company believes that with modifications to existing software and
         conversions to the new POS system, the year 2000 issue will not pose
         significant operational problems for the Company's computer systems.
         The Company has initiated formal communications with its suppliers to
         determine the extent to which the Company is vulnerable to those third
         parties' failure to remedy their own Year 2000 issues. The Company will
         continue to address any further year 2000 issues and believes that any
         costs relating to such issues will not be material to the Company's
         financial condition or results of operations.

         Rental inventories are treated as noncurrent assets under generally
         accepted accounting principles because they are not assets which are
         reasonably expected to be completely realized in cash or sold in the
         normal business cycle. Although the rental of this inventory generates
         the major portion of the Company's revenue, the classification of these
         assets as noncurrent results in their exclusion from working capital.
         The aggregate amount payable for this inventory, however, is reported
         as a current liability until paid and, accordingly, is included in the
         computation of working capital. Consequently, the

                                       14
<PAGE>   15

         Company believes working capital is not an appropriate measure of its
         liquidity.


         Item 3: Quantitative and Qualitative Disclosure about Market Risk

                  The Company's exposure to market risk relates primarily to
         potential changes in interest rates on the Company's long-term debt
         obligations. The Company has cash flow exposure on its long-term
         obligations related to changes in market interest rates. The Company
         enters into long-term debt obligations for general corporate purposes,
         including the funding of capital expenditures for acquisitions. The
         Company has not entered into any material derivative financial
         instruments to hedge interest rate risk on these general corporate
         borrowings.

                  The Company's management believes that fluctuations in
         interest rates in the near term may materially affect the Company's
         consolidated operating results, financial position or cash flows as the
         Company has significant exposure to interest rate fluctuations.


                                    PART II
                               OTHER INFORMATION

         Item 1.         Legal Proceedings

         Item 2.         Changes in Securities
                                 None

         Item 3.         Defaults Upon Senior Securities
                                 Not Applicable

         Item 4.         Submission of Matters to a Vote of the Security Holders
                                 None

         Item 5.         Other Information
                                 None

         Item 6.         Exhibits and Reports on Form 8-K

                         (a)  Exhibits

                                   27.0     -    Financial Data Schedule

                         (b)      Reports on Form 8-K

                                   The Registrant filed a Current Report on
                                   Form 8-K reporting an Item 5 merger agreement
                                   between the Registrant and Video City Inc. on
                                   August 10, 1999.




                                       15
<PAGE>   16

                                   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.


                                         WEST COAST ENTERTAINMENT
                                               CORPORATION


Date:  October 27, 1999       By:      /s/   T. Kyle Standley
                                       -------------------------------
                                       T. Kyle Standley, President and
                                       Chief Executive Officer
                                       (Principal Executive Officer)


Date: October 27, 1999        By:      /s/   Richard G. Kelly
                                       ----------------------------------
                                       Richard G. Kelly, Chief Financial Officer
                                       (Principal Financial Officer)












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