<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 August 1, 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                  (I.R.S. Employer I.D. No.)
of 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.

<TABLE>
<CAPTION>
              Class                Outstanding at September 15, 1999
              -----                ---------------------------------
<S>                                <C>
          Common Stock, $.01                14,084,704
          par value per share
</TABLE>

<PAGE>   2
                      WEST COAST ENTERTAINMENT CORPORATION

                                      INDEX

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

          Item 1.     -  Financial Statements

                      Consolidated Balance Sheets -
                                  As of August  1, 1999 and January 31, 1999                       3

                      Consolidated Statements of Operations-
                                  Quarters Ended August 1, 1999
                                  and August 2, 1998
                                  Two Quarters Ended August 1, 1999 and
                                  August 2, 1998                                                   4

                      Consolidated Statements of Cash Flows-
                                  Two Quarters Ended August 1, 1999 and  August 2, 1998            5

                      Consolidated Statement of Stockholders Equity-
                                  As of August 1, 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


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
                     WEST COAST ENTERTAINMENT CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT PAR VALUE)

<TABLE>
<CAPTION>

                                                                                           JANUARY           AUGUST
                                                                                             31,               1,
                                                                                            1999              1999
                                                                                          ---------        ---------
<S>                                                                                       <C>              <C>
                                     ASSETS

Current assets:

  Cash ............................................................................       $   2,424        $     866
  Accounts receivable and other receivables (net of allowance for doubtful accounts
    of $67 and $8 at January 31, 1999 and August 1,1999, respectively) ............           1,512            1,325
  Merchandise inventory ...........................................................           8,404            8,571
  Market development funds and co-op receivable ...................................           1,242              733
  Receivables from officers .......................................................             373              389
  Prepaid expenses and other current assets .......................................             472              552
                                                                                          ---------        ---------
   Total current assets ...........................................................          14,427           12,436

Videocassette rental inventory, net  (Note 2), ....................................          20,375           19,252
Furnishings, equipment and leasehold improvements, net ............................          17,892           17,090
Intangible assets (net of accumulated amortization of $ 16,497 and $19,694 at
  January 31, 1999 and August 1,1999, respectively) ...............................         110,530          107,075

Other assets ......................................................................           2,456            1,852
                                                                                          ---------        ---------

     Total assets .................................................................       $ 165,680        $ 157,705
                                                                                          =========        =========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt (Note 3) ......................................       $   8,081        $  69,734
  Accounts payable ................................................................          14,659           11,821
  Accrued expenses ................................................................           7,783            9,852
  Income taxes payable ............................................................             655              802
                                                                                          ---------        ---------
     Total current liabilities ....................................................          31,178           92,209

Long-term debt (Note 3) ...........................................................          58,187               --
Other Liabilities .................................................................              59               16
                                                                                          ---------        ---------

Total Liabilities .................................................................          89,424           92,225
                                                                                          ---------        ---------

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

Stockholders' equity:
Common stock ($0.01 par value; 14,185 shares as of January 31, 1999 and August 1,
1999 of which 14,073 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          104,093
   Accumulated (deficit) ..........................................................         (27,737)         (38,513)

   Treasury stock (92 shares of common stock, at cost) ............................            (242)            (242)
                                                                                          ---------        ---------
     Total stockholders' equity ...................................................          76,256           66,480
                                                                                          ---------        ---------
     Total liabilities and stockholders' equity ...................................       $ 165,680        $ 157,705
                                                                                          =========        =========
</TABLE>

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


                                       3
<PAGE>   4
                      WEST COAST ENTERTAINMENT CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                     TWO            TWO
                                                                QUARTER           QUARTER           QUARTERS       QUARTERS
                                                                 ENDED             ENDED             ENDED          ENDED
                                                                AUGUST 2,         AUGUST 1,         AUGUST 2,      AUGUST 1,
                                                                  1998              1999              1998           1999
                                                               ----------        ----------        ----------      ---------
<S>                                                            <C>               <C>               <C>              <C>
Revenues:
  Rental revenue .......................................       $   25,034        $   21,992        $   51,193       $   45,398
  Merchandise sales ....................................            4,734             2,863             9,449            6,422
  Franchise fees .......................................              948               300             1,631              608
                                                               ----------        ----------        ----------       ----------
                                                                   30,716            25,155            62,273           52,428
                                                               ----------        ----------        ----------       ----------
Costs and expenses:
  Store operating expenses .............................           14,187            13,090            28,110           25,767
  Cost of goods sold ...................................            3,337             1,986             6,683            4,470
  Amortization of videocassette and video game rental
     inventory (Note 2 ) ...............................            6,392             5,222            12,664           11,716
  Revenue sharing expense ..............................               --             2,656                --            3,922
  Selling, general and administrative ..................            3,752             4,912             7,270            8,669
  Amortization of intangible assets ....................            1,611             1,646             3,265            3,287
                                                               ----------        ----------        ----------       ----------
                                                                   29,279            29,512            57,992           57,831

Income (loss) from operations ..........................            1,437            (4,357)            4,281           (5,403)

Interest expense .......................................            1,627             3,250             3,265            5,262
Other expense (income) .................................               70                42               144               31
                                                               ----------        ----------        ----------       ----------
Income (loss) before provision for income taxes ........             (260)           (7,649)              872          (10,696)
Provision  for income taxes ............................                0                40               634               80
                                                               ----------        ----------        ----------       ----------
Net income (loss) ......................................       $     (260)       $   (7,689)       $      238       $  (10,776)
                                                               ==========        ==========        ==========       ==========

Income (loss) per common share data:
  Net income (loss) - basic and diluted ................       $    (0.02)       $    (0.55)       $     0.02       $    (0.77)
                                                               ==========        ==========        ==========       ==========
Weighted average number of common shares outstanding ...           14,159            14,085            14,153           14,085
                                                               ==========        ==========        ==========       ==========
</TABLE>

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


                                       4
<PAGE>   5
                      WEST COAST ENTERTAINMENT CORPORATION


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 TWO QUARTERS ENDED
                                                                             --------------------------
                                                                             AUGUST 2,        AUGUST 1,
                                                                               1998             1999
                                                                             ---------        ---------
<S>                                                                          <C>             <C>
Cash flows from operating activities:
  Net income (loss) ..................................................       $    238        $ (10,776)
  Adjustments to reconcile net income (loss) to cash flows provided by
     operating activities:
     Amortization of debt financing costs ............................            222              605
     Amortization of videocassette rental inventory ..................         12,664           11,716
     Depreciation and amortization of furnishings, equipment
       and leasehold improvements ....................................          1,588            1,931
     Amortization of intangible assets ...............................          3,265            3,287
     Changes in assets and liabilities:
     Accounts receivable .............................................           (385)             186
     Merchandise inventory ...........................................         (4,471)            (167)
     Prepaid expenses and other assets ...............................           (395)             581
     Accounts payable ................................................          3,544           (2,838)
     Accrued expenses and other liabilities ..........................            188            2,027
     Income taxes payable ...........................................             743              147
                                                                             --------         --------
     Net cash provided by operating activities .......................         17,201            6,699
                                                                             --------         --------
Cash flows related to investing activities:
  Purchases of property and equipment ................................         (1,900)          (1,129)
  Purchases of videocassette rental inventory ........................        (15,292)         (10,594)
                                                                             --------         --------
       Net cash used in investing activities .........................        (17,192)         (11,723)
                                                                             --------         --------
Cash flows related to financing activities:
  Proceeds from long-term debt .......................................             --            3,506
  Purchase of treasury stock .........................................           (242)              --
  Repayments of long-term debt .......................................             (4)             (40)
  Proceeds from issuance of common stock .............................             26               --
                                                                             --------         --------
Net cash provided by (used in) financing activities ..................           (220)           3,466
                                                                             --------         --------
Net increase (decrease) in cash ......................................           (211)          (1,558)
Cash, beginning of period ............................................          2,604            2,424
                                                                             --------         --------
Cash, end of period ..................................................       $  2,393         $    866
                                                                             ========         ========
Supplemental cash flow data:
  Interest paid ......................................................       $  2,892        $  3,415
                                                                             ========        ========
  Income taxes paid ..................................................       $    185        $     13
                                                                             ========        ========
</TABLE>

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


                                       5
<PAGE>   6
                      WEST COAST ENTERTAINMENT CORPORATION


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

<TABLE>
<CAPTION>
                                                                                                                           TOTAL
                                                       COMMON STOCK          ADDITIONAL                                    STOCK-
                                                 ------------------------     PAID-IN      ACCUMULATED     TREASURY        HOLDERS'
                                                   SHARES        AMOUNT       CAPITAL       (DEFICIT)       STOCK          EQUITY
                                                 ----------    ----------    ----------    -----------    ----------     ----------
<S>                                              <C>           <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
Net (loss) ....................................          --            --            --       (10,776)            --        (10,776)
                                                 ----------    ----------    ----------    ----------     ----------     ----------
Balance at  August 1, 1999 ....................  14,184,677    $      142    $  104,093    $  (38,513)    $     (242)    $   65,480
                                                 ==========    ==========    ==========    ==========     ==========     ==========
</TABLE>

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


                                       6
<PAGE>   7
                      WEST COAST ENTERTAINMENT CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 1, 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 $69.7
            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. See "---Management's
            Discussion and Analysis of Financial Condition and Results of
            Operations."

            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 fourth quarter of fiscal 2000.

            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 (the "Company'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 two quarters ended August 1, 1999
            are not necessarily indicative of the results to be expected for the
            year ending February 6, 2000.

            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 two quarters ended August 2, 1998 and August 1, 1999
            reflect a 26 week period.

            As of August 1, 1999 the Company owned and operated 251 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


                                       7
<PAGE>   8
                      WEST COAST ENTERTAINMENT CORPORATION


            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 two quarters ended August 1, 1999.

2           Videocassette Rental Inventory

            Videocassette rental inventory and related amortization are as
            follows (in thousands):

<TABLE>
<CAPTION>
                                             January 31, 1999     August 1, 1999
                                             ----------------     --------------
<S>                                          <C>                  <C>
            Videocassette rental inventory        $ 87,985            $ 98,579
            Accumulated amortization               (67,610)            (79,327)
                                                  --------            --------
                                                  $ 20,375            $ 19,252
                                                  ========            ========
</TABLE>

            Amortization expense related to videocassette rental inventory
            totaled approximately $5,222,000 and $6,392,000 for the quarters
            ended August 1, 1999 and August 2, 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 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


                                       8
<PAGE>   9
                      WEST COAST ENTERTAINMENT CORPORATION


February 15, 2000. At August 1, 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 August 1, 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 August 1, 1999). The interest rate on the Overadvance is
equal to the Prime rate plus 5.5% (13.25% at August 1, 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 October 22, 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           Subsequent Event

The Company was a defendant in a lawsuit with Brookfield Communication, Inc. A
verdict was returned against West Coast Entertainment Corporation subsequent to
August 1, 1999 in the amount of $1,700,000 of which all but $750,000 is believed
to be covered by its general liability insurance. The Company plans to pursue
all remedies available under law to overturn and reverse the decision.



                                       9
<PAGE>   10
                      WEST COAST ENTERTAINMENT CORPORATION


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 "Factors Affecting Future Results" in Item
        7 below.

        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 such stockholders. The Merger Agreement is subject to stockholder
        approval of both companies, and is currently anticipated to be completed
        some time in the fourth quarter of fiscal 2000.

        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 August 1, 1999 compared to Quarter ended August 2, 1998

        Revenues. Revenues decreased $5.5 million, or 17.9%, from $30.7 million
        for the quarter ended August 2, 1998 to $25.1 million for the quarter
        ended August 1, 1999. This change consisted of a decrease of $3.0
        million in rental revenues, a decrease of $1.9 million in merchandise
        sales and a decrease of $0.6 million in franchise fee revenue. The
        decreases in store rental and merchandise sales revenues of $4.9 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 30 stores
        from 282 stores owned during the quarter ended August 2, 1998 to 252
        stores owned during the quarter ended August 1, 1999 and accounted for
        $3.2 million of the total decrease. In addition, a decrease in average
        per store revenues accounted for the remaining decrease of $1.7 million
        in store revenues.

             Rental revenues decreased $3.0 million, or 12.0%, from $25.0
        million for the quarter ended August 2, 1998 to $22.0 million for the
        quarter ended August 1, 1999. This decrease is primarily attributable to
        the closing of underperforming stores during the fourth quarter of the
        last fiscal year and, the resulting decrease in weighted average number
        of stores owned as discussed above. This decrease in stores owned
        accounted for $2.6 million of the decrease. The remaining $0.4 million
        decrease is related to a decrease in average store rental revenues.

             Merchandise and other sales decreased $1.9 million, or 39.6%, from
        $4.8 million for the quarter ended August 2, 1998 to $2.9 million for
        the quarter ended August 1, 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 $0.5 million. The remaining $1.4 million decrease is due
        to lower merchandise and other sales as a result of lower store
        inventory levels, as compared to inventory levels during the quarter
        ended August 2, 1998.

             Franchise fee revenues decreased $0.6 million, or 66.7%, from $0.9
        million for the quarter ended August 2, 1998 to $0.3 million for the
        quarter ended August 1, 1999. This decrease is attributable to a decline
        in the number of franchises and the decrease in the sale or settlement
        of franchise agreements received for the quarter ended August 2, 1998.

             Store Operating Expenses. Store operating expenses decreased $1.1
        million, or 7.7%, from $14.2 million for the quarter ended August 2,
        1998 to $13.1 million for the quarter ended August 1, 1999. A


                                       10
<PAGE>   11
                      WEST COAST ENTERTAINMENT CORPORATION


        decrease of approximately $1.5 million caused by the closing of
        underperforming stores during the fourth quarter of the last fiscal year
        as described above. The remaining increase of $0.4 million was primarily
        caused by higher occupancy costs and increased depreciation expense.

             Cost of Goods Sold. Costs of goods sold decreased $1.3 million, or
        39.4 %, from $3.3 million for the quarter ended August 2, 1998 to $2.0
        million for the quarter ended August 1, 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 $0.9 million decrease
        is related to lower merchandise and other sales caused by a decrease in
        inventory levels of new movies for sale. As a percentage of merchandise
        sales, cost of goods increased 2.3 percentage points from 66.7% for the
        quarter ended August 2, 1998 to 69.0% for the quarter ended August 1,
        1999.

             Amortization of Videocassette and Video Game Rental Inventory.
        Amortization of rental inventory decreased $1.2 million, or 18.8 %, from
        $6.4 million for the quarter ended August 2, 1998 to $5.2 million for
        the quarter ended August 1, 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 $2.7 million
        for the quarter ended August 1, 1999, as compared to no revenue sharing
        expense for the quarter ended August 2, 1998. The Company entered into
        revenue sharing agreements with studios as more fully discussed in Note
        2 of the consolidated financial statements.

             Selling, General and Administrative Expense. Selling, general and
        administrative expenses increased $1.1 million, or 28.9%, from $3.8
        million for the quarter ended August 2, 1998 to $4.9 million for the
        quarter ended August 1, 1999. This increase was 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 7.1 percentage points from
        12.4 % for the quarter ended August 2, 1998 to 19.5% for the quarter
        ended August 1, 1999 as a result of the legal judgment and lower
        revenues primarily related to store closures as previously discussed.

             Amortization of Intangible Assets. Intangible amortization expense
        remained unchanged at $1.6 million for the quarters ended August 2, 1998
        and the quarter ended August 1, 1999. As a percentage of total revenues,
        intangible amortization increased 1.2 percentage points from 5.2% for
        the quarter ended August 2, 1998 to 6.4% for the quarter ended August 1,
        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 $1.5 million, or 88.2%, from $1.7 million for the quarter
        ended August 2, 1998 to $3.2 million for the quarter ended August 1,
        1999. Interest expense comprises almost all this net amount. This
        increase was caused by higher 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 increased
        $7.4 million, from a $0.3 million net loss for the quarter ended August
        2, 1998 to a $7.7 million net loss for the quarter ended August 1, 1999.

        Two quarters ended August 1, 1999 compared to Two quarters ended August
        2, 1998

             Revenues. Revenues decreased $9.9 million, or 15.9%, from $62.3
        million for the two quarters ended August 2, 1998 to $52.4 million for
        the two quarters ended August 1, 1999. This change reflected a decrease
        of $5.8 million in rental revenues, a decrease of $3.1 million in
        merchandise sales and a decrease of $1.0 million in franchise fee
        revenue. Approximately $6.4 million of the $8.9 million decrease in
        store rental and merchandise sales revenues was attributable to a lower
        weighted average number of stores owned (after


                                       11
<PAGE>   12
                      WEST COAST ENTERTAINMENT CORPORATION


        closing underperforming stores primarily in the fourth quarter of last
        year ending January 31, 1999) which decreased by 30 stores from 284
        stores owned during the two quarters ended August 2, 1998 to 254 stores
        owned during the two quarters ended August 1, 1999 and accounted for
        $6.4 million of the total decrease. A decrease in average per store
        revenues, for the reasons discussed below, accounted for a decrease of
        $2.5 million in store revenues.

             Rental revenues decreased $5.8 million, or 11.3%, from $51.2
        million for the two quarters ended August 2, 1998 to $45.4 million for
        the two quarters ended August 1, 1999. Approximately $5.4 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. The
        remaining $0.4 million decrease is related to a decrease in average
        store rental revenues.

             Merchandise and other sales decreased $3.1 million, or 32.6%, from
        $9.5 million for the two quarters ended August 2, 1998 to $6.4 million
        for the two quarters ended August 1, 1999. Approximately $1.1 million of
        this decrease was attributable to the closing of underperforming stores
        during the fourth quarter of last year. The remaining $2.1 million
        decrease was due to lower merchandise and other sales as a result of
        lower store inventory levels, which were necessitated by working capital
        restrictions.

             Franchise fee revenues decreased $1.0 million, or 62.5%, from $1.6
        million for the two quarters ended August 2, 1998 to $0.6 million for
        the two quarters ended August 1, 1999. This decrease is attributable to
        a decline in the number of franchises and a decrease through the sale or
        settlement of franchise agreements.

             Store Operating Expenses. Store operating expenses decreased $2.3
        million, or 8.2%, from $28.1 million for the two quarters ended August
        2, 1998 to $25.8 million for the two quarters ended August 1, 1999. A
        decrease of approximately $3.0 million was caused by the closing of
        underperforming stores during the fourth quarter of last year. This
        decrease was offset by an increase of $0.7 million which was primarily
        caused by higher occupancy costs and depreciation expense.

             Cost of Goods Sold. Costs of goods sold decreased $2.2 million, or
        32.8%, from $6.7 million for the two quarters ended August 2, 1998 to
        $4.5 million for the two quarters ended August 1, 1999. Approximately
        $0.7 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 $1.5 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 70% for both the
        two quarters ended August 1, 1999 and the two quarters ended August 2,
        1998.

             Amortization of Videocassette and Video Game Rental Inventory.
        Amortization of rental inventory decreased $1.0 million, or 7.9%, from
        $12.7 million for the two quarters ended August 2, 1998 to $11.7
        million for the two quarters ended August 1, 1999, primarily as a
        result of the Company entering into revenue sharing agreements with
        studios as discussed in Note 2 to the consolidated financial
        statements.

             Revenue Sharing Expense. Revenue sharing expense was $3.9 million
        for the two quarters ended August 1, 1999, as compared to no revenue
        sharing expense for the two quarters ended August 2, 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 $1.3 million, or 17.8%, from $7.3
        million for the two quarters ended August 2, 1998 to $8.6 million for
        the two quarters ended August 1, 1999. This increase was caused by
        increases in insurance, consulting and professional fees expenses. The
        increase in insurance expense was due to recording a retroactive premium
        for the first quarter of the year ended August 2, 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 4.7 percentage points from 11.7% for
        the two quarters ended August 2, 1998 to 16.4% for the two quarters
        ended August 1, 1999 as a result of the legal judgment and lower
        revenues resulting primarily from store closures as previously
        discussed.


                                       12
<PAGE>   13
                      WEST COAST ENTERTAINMENT CORPORATION


             Amortization of Intangible Assets. Intangible amortization expense
        increased $0.1 million, or 3.1%, from $3.2 million for the two quarters
        ended August 2, 1998 to $3.3 million for the two quarters ended August
        1, 1999.. As a percentage of total revenues, intangible amortization
        increased 1.2 percentage points from 5.1 % for the two quarters ended
        August 2, 1998 to 6.3% for the two quarters ended August 1, 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 $1.9 million, or 61.2%, from $3.4 million for the two quarters
        ended August 2, 1998 to $5.3 million for the two quarters ended August
        1, 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 financial statements and by higher levels of borrowings under the
        amended agreement.

             Net Income (Loss). As a result of the foregoing, net income
        decreased $11.1 million, from $0.3 million of net income for the two
        quarters ended August 2, 1998 to a $10.8 million net loss for the two
        quarters ended August 1, 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 $69.7 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 two quarters ended August 1, 1999, the Company had net cash
        provided by operating activities of $6.7 million, net cash used in
        investing activities of $11.7 million (consisting primarily of cash used
        to purchase videocassette rental inventory of $10.6 million and $1.1
        million of cash paid for purchases of property and equipment) and net
        cash provided by financing activities of $3.5 million (consisting
        primarily of net borrowings under the Revised Facility, as described in
        Note 3 to the Consolidated Financial Statements), resulting in a net
        decrease in cash of $1.6 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
        October 22, 1999, this warrant has not been exercised.

                                       13
<PAGE>   14
                      WEST COAST ENTERTAINMENT CORPORATION


        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 intends to upgrade its POS systems over the upcoming months
        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 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.


                                       14
<PAGE>   15
                      WEST COAST ENTERTAINMENT CORPORATION


                                     PART II
                                OTHER INFORMATION

Item 1.    Legal Proceedings

                       The Company was a defendant in a lawsuit with Brookfield
                       Communication, Inc. A verdict was returned against West
                       Coast Entertainment Corporation subsequent to August 1,
                       1999 in the amount of $1,700,000 of which all but
                       $750,000 is believed to be covered by its general
                       liability insurance. The Company plans to pursue all
                       remedies available under law to overturn and reverse the
                       decision.

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.

                                   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)


                                       15