<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 April 30, 1997

                                       OR

       [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

         For the transition period from ____________ to _____________

                         Commission file number 0- 28072

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

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


One Summit Square, Suite 200, Rte. 413 & Doublewoods Rd.
P.O. Box 1400
Newtown,  Pennsylvania                                     18940
 (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) has been subject to such filing requirements
             for the past 90 days.

                 Yes __X__ No _____




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

<TABLE>
<CAPTION>
                         Class                 Outstanding at June 1, 1997
                         -----                 ---------------------------
<S>               <C>                          <C>       
                  Common Stock, $.01                   13,196,344
                  par value per share
</TABLE>
<PAGE>   2
                      WEST COAST ENTERTAINMENT CORPORATION


                                      INDEX


<TABLE>
<CAPTION>
Part I.                     -  Financial Information                                                     Page No.
<S>           <C>                                                                                        <C>
              Item 1.       -  Financial Statements


              Consolidated Balance Sheets -                                                              3
                       As of April 30, 1997 and January 31, 1997
              
              Consolidated Statements of Operations -                                                    4
                       First Quarter Ended April 30, 1997 and April 30, 1996
              
              Consolidated Statements of Cash Flows -                                                    5
                        First Quarter Ended April 30, 1997 and April 30, 1996
               
              Notes to Consolidated Financial Statements                                                 6 - 9


              Item 2.       - Management's Discussion and Analysis of Financial Condition and            10 - 15
                              Results of Operations

Part II.                    - Other Information                                                          16


              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>

<PAGE>   3
                      WEST COAST ENTERTAINMENT CORPORATION
                           CONSOLIDATED BALANCE SHEET
                      (in thousands, except for par value)
                                   (unaudited)




<TABLE>
<CAPTION>
                                                                                   APRIL 30,     JANUARY 31,
                                                                                     1997          1997
                                                                                     ----          ----
<S>                                                                                <C>           <C>     
Assets:

Current assets:
  Cash and cash equivalents                                                        $    923      $  1,311
  Accounts receivable and other receivables                                           1,803         1,899
  Merchandise inventory                                                               7,578         6,333
  Prepaid expenses and other current assets                                           2,358         2,046
  Receivable from officers                                                              184           141
                                                                                   --------      --------

    Total current assets                                                             12,846        11,730

Videocassette rental inventory, net of amortization                                  26,161        24,598
Furnishings, equipment and leasehold improvements, net                               12,849        11,285
Other assets                                                                          4,877         2,998
Intangible assets (net of accumulated amortization of
 $5,188 at April 30, 1997)                                                          108,579       109,193
Deferred tax asset                                                                      160           160
                                                                                   --------      --------

    Total assets                                                                   $165,472      $159,964
                                                                                   ========      ========

Liabilities and Stockholders' Equity:

Current liabilities:
  Current portion of long-term debt                                                $     17      $     19
  Accounts payable                                                                   11,770        12,941
  Accrued expenses and other liabilities                                              4,348         4,647
  Income taxes                                                                           --         1,555
  Deferred tax liability                                                                566           566
                                                                                   --------      --------

    Total current liabilities                                                        16,701        19,728

Long-term debt (net of current portion)                                              40,802        32,802
Other long-term liabilities                                                             299           299
                                                                                   --------      --------

    Total liabilities                                                                57,802        52,829

Stockholders' equity:
  Common stock ($0.01 par value; 13,808 shares as of April 30, 1997, of which
    13,169 shares were outstanding and 639 shares to be issued; and 13,770
    shares outstanding at January 31, 1997)                                             138           138
  Preferred stock ($0.01 par value, 2,000 shares authorized, no shares issued)           --            --
  Additional paid in capital                                                        103,947       103,947
  Accumulated surplus/(deficit)                                                       3,585         3,050
                                                                                   --------      --------

    Total stockholders' equity                                                      107,670       107,135
                                                                                   --------      --------

    Total liabilities and stockholders' equity                                     $165,472      $159,964
                                                                                   ========      ========
</TABLE>

                 See accompanying notes to financial statements


                                                                            3

<PAGE>   4
                      WEST COAST ENTERTAINMENT CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)



<TABLE>
<CAPTION>
                                                            Three months ended
                                                                  April 30,
                                                             1997           1996
                                                             ----           ----
<S>                                                        <C>            <C>    
Revenues:
  Rental revenue                                           $ 22,439       $ 2,414
  Merchandise sales                                           4,124           931
  Franchise fees                                                829         1,377
                                                           --------       -------

    Total revenues                                           27,392         4,722
                                                           --------       -------

Operating costs and expenses:
  Store operating expenses                                   12,834         1,473
  Cost of goods sold                                          2,881           693
  Amortization of videocassette and video game rental
    inventory                                                 5,353           386
  General and administrative                                  3,203         1,586
  Intangible amortization                                     1,426           133
                                                           --------       -------

    Total operating costs and expenses                       25,697         4,271
                                                           --------       -------

Income from operations                                        1,695           451
                                                           --------       -------

Interest expense                                                757           285
Other, net                                                      (35)           (9)
                                                           --------       -------

Income before provision for income taxes                        973           175

Provision for income taxes                                      438            74
                                                           --------       -------

Net income                                                 $    535       $   101
                                                           ========       =======

Income per common share data:

Net income                                                 $   0.04       $  0.02
                                                           ========       =======

Weighted average shares outstanding                          13,785         4,756
                                                           ========       =======
</TABLE>

                 See accompanying notes to financial statements

                                                                            4
<PAGE>   5
                      WEST COAST ENTERTAINMENT CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                             Three months ended
                                                                 April 30,
                                                             1997          1996
                                                             ----          ----
<S>                                                        <C>           <C>    
Cash flows from operating activities:
  Net income                                               $   535       $   101
  Adjustments to reconcile net income to cash
    flows provided by (used in) operating activities:
    Amortization of debt financing costs                        44            --
    Amortization of videocassette rental inventory           5,353           386
    Depreciation and amortization of furnishings,
      equipment and leasehold improvements                     427           104
    Amortization of intangible assets                        1,426           133
    Changes in assets and liabilities:
      Accounts receivable                                       96            21
      Merchandise inventories                               (1,208)          (34)
      Prepaid expenses and other assets                       (526)          111
      Accounts payable                                      (1,190)          270
      Accrued expenses and other liabilities                  (299)        1,278
      Income taxes                                          (1,628)           38
                                                           -------       -------

    Net cash provided by operating activities                3,030         2,408
                                                           -------       -------

Cash flows from investing activities:
  Acquisition of businesses, net of cash acquired           (1,037)       (1,318)
  Purchase of property and equipment                        (1,832)          (33)
  Purchase of videocassette rental inventory                (6,796)         (570)
                                                           -------       -------

    Net cash used in investing activities                   (9,665)       (1,921)
                                                           -------       -------

Cash flows from financing activities:
  Proceeds from long-term debt                               8,000           800
  Repayment of long-term debt                                   (2)         (396)
  Shareholder distributions                                     --            --
  Changes in other assets related to financing              (1,751)       (1,295)
                                                           -------       -------

    Net cash provided by financing activities                6,247          (891)
                                                           -------       -------

Net increase(decrease) in cash and cash equivalents           (388)         (404)

Cash and cash equivalents, beginning of period               1,311           611
                                                           -------       -------

Cash and cash equivalents, end of period                   $   923       $   207
                                                           =======       =======

Supplemental cash flow data:
  Interest paid                                            $   676       $   285
                                                           =======       =======

  Income taxes paid                                        $ 2,199       $    --
                                                           =======       =======
</TABLE>

                 See accompanying notes to financial statements

                                                                               5
<PAGE>   6
                      WEST COAST ENTERTAINMENT CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)


1        Basis of Presentation

         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 1, 1997.

         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 reported 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 months ended April 30, 1997 are not
         necessarily indicative of the results to be expected for the year
         ending January 31, 1998.


2        Videocassette Rental Inventory

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

<TABLE>
<CAPTION>
                                                                   April 30, 1997                      April 30, 1996
                                                                   --------------                      --------------
         <S>                                          <C>                                 <C>    
         Videocassette rental inventory                               $ 42,807                             $ 3,868
         Accumulated amortization                                      (16,646)                             (2,175)
                                                                      --------                             -------
                                                                      $ 26,161                             $ 1,693
                                                                      ========                             =======
</TABLE>

         Amortization expense related to video cassette rental inventory total
         $386 and $5,353 for the three months ended April 30, 1996 and 1997,
         respectively.


3        Acquisitions

         May Acquisitions 
         On May 17, 1996, the Company acquired 172 video specialty stores (the
         "May Acquisitions"), including 13 stores owned by franchisees of the
         Company. Taking into account certain adjustments and calculation of
         certain contingent payments, the aggregate consideration of $83.9
         million was paid consisting of the following: $53.0 million in cash,
         approximately $26.2 million in shares of common stock (2.1 million
         shares), and approximately $4.7 million of acquisition costs. Of these
         amounts, approximately $0.4 million represents remaining minimum
         contingent consideration (of which approximately $0.1 million and $0.3
         million (19,734 shares) is to be paid in cash and stock, respectively).

                                                                               6
<PAGE>   7
                      WEST COAST ENTERTAINMENT CORPORATION


         Early Fall Acquisitions 
         Between August 26 and October 25, 1996, the Company acquired the assets
         of 21 video specialty stores (the "Early Fall Acquisitions"). Aggregate
         consideration of $13.6 million was paid, consisting of the following:
         $8.2 million in cash and $4.9 million in shares of common stock (0.5
         million shares). Approximately $0.5 million of acquisition costs was
         also paid. The shares (0.4 million) associated with one of these
         acquisitions are to be issued in three equal installments (six, twelve
         and eighteen months from the acquisition date) and the number of shares
         issuable will be increased in certain cases by the difference between
         the share price at issuance date and a formulaic common share price
         calculated as of the date of acquisition. Additionally, 0.1 million
         shares associated with another Early Fall Acquisition are to be issued
         on August 26, 1997. In both instances these common shares and other
         common shares to be issued in installments have been considered
         outstanding as of the beginning of the periods presented.

         Late Fall Acquisitions
         Between November 15 and December 3, 1996, the Company acquired the
         assets of 47 video specialty stores (the "Late Fall Acquisitions"),
         including 19 stores owned by franchises of the Company for aggregate
         consideration of $27.7 million consisting of the following: $14.4
         million in cash and $11.0 million in shares of common stock (1.0
         million shares) and approximately $2.3 million of acquisition costs.

         The excess of the cost over the fair value of the assets acquired is
         being amortized over 20 years on a straight line basis. The results of
         operations of the acquired stores have been included in operations of
         the Company since the date of acquisition. The purchase method of
         accounting was used to account for the acquisitions.

         The following unaudited pro forma information presents the results of
         operations as though (i) the May Acquisitions, the Early Fall
         Acquisitions and Late Fall Acquisitions had occurred as of the
         beginning of the periods presented, (ii) each entity included in the
         consolidated statement of operations had been included in the Company's
         consolidated income tax returns and subject to corporate income
         taxation as a C corporation during all periods presented, and (iii) the
         borrowings under the new credit facility had occurred as of the
         beginning of the periods presented.

         The following unaudited pro forma net income per share for the three
         months ended April 30, 1996 and 1997 was calculated by dividing the
         respective unaudited pro forma net income by the pro forma weighted
         average number of shares of Common Stock outstanding after giving
         effect to (i) the 0.340-for-1 reverse stock split approved by the Board
         of Directors on May 14, 1996, and the shares issued in conjunction with
         the Initial Public Offering on May 17, 1996 ("the Offering"), (ii)
         issuance of shares in connection with the May, Early Fall and Late Fall
         Acquisitions, (iii) repayment of outstanding debt at the date of the
         Offering, and (iv) the impact of a detachable warrant with a primary
         supplier of videocassettes and a portion of a convertible note which
         was converted into shares of the Company's common stock as if the
         transactions had occurred on the first day of the periods presented.
         The pro forma weighted average number of common shares used to
         calculate pro forma net income per share was 14,000,605 and 14,000,605
         for the three months ended April 30, 1996 and 1997.

                                                                               7
<PAGE>   8
                      WEST COAST ENTERTAINMENT CORPORATION

<TABLE>
<CAPTION>
                                                                 Unaudited
                                                                 Pro Forma
                                                        Three Months Ended April 30,
                                                       1997                        1996
                                                   (in thousands, except per share data)
         <S>                                       <C>                      <C>         
         Pro forma revenues                        $27,392                  $28,368
         Pro forma net income                          535                    1,668
         Pro forma net income per share            $  0.04                  $  0.12
</TABLE>



4        Long Term Debt

         On May 17, 1996 the Company obtained a $60,000,000 Credit Facility
         ("the Facility") from a bank which consists of a 17 month revolving
         credit facility followed by a three year term loan. In association with
         the borrowing the Company paid a fee of $700,000 on May 17, 1996 which
         has been recorded in other long term assets and will be amortized over
         the term of the Credit Facility. Borrowings under the Facility are
         available for working capital, capital expenditures, refinancing of
         existing indebtedness, and for certain permitted acquisition financing.

         On October 31, 1996 the Company received a commitment from the Bank to
         increase the Credit Facility to $65,000,000 effective August 5, 1996.
         As of May 31, 1997 the Company had $40,800,000 outstanding under the
         Credit Facility.

         Borrowings are limited to 2.75 times the Company's operating cash flow,
         as defined, during the previous four quarters. At the Company's option,
         interest rates vary from either the Bank's base rate, as defined, at 1%
         above such base rate, or from the Eurodollar rate, as defined, at 2.5%
         above such Eurodollar rate (8.25% at May 31, 1997). Additionally, the
         Facility provides for a commitment fee payable quarterly, computed at
         0.5% of the unused portion of the available Facility during the
         previous quarter.

         The Credit Facility is secured by a first security interest in
         substantially all of the Company's assets, including the stock of its
         subsidiaries and provide for certain restrictive covenants, including
         among others compliance with certain financial tests and ratios and
         dividend restrictions.


5        Earnings Per Share

         In February 1997, SFAS No. 128, "Earnings Per Share", was issued. This
         pronouncement will be effective for the Company's year ending 
         January 31, 1998 financial statements. SFAS No. 128 supersedes the
         pronouncement of the Accounting Principles Board (APB) No. 15. The
         statement eliminates the calculation of primary earnings per share and
         requires the disclosure of Basic Earnings Per Share and Diluted
         Earnings Per Share (formerly referred to as fully diluted earnings per
         share). SFAS No. 128 would not have had a material impact on the
         Company's calculation of earnings per share for the quarter ended 
         April 30, 1997. Basic Earnings Per Share and Diluted Earnings Per 
         Share would be the same for the quarter ended April 30, 1997.



6        Subsequent Event

         On June 16, 1997, the Company acquired a total of 23 stores from one
         selling group for aggregate consideration of $11.3 million, including
         payment of assumed liabilities of $3.2 million.

                                                                               8

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

RESULTS OF OPERATIONS

Three Months ended April 30, 1997 compared to Three Months ended April 30, 1996

Revenues

Revenues increased $22.7 million, or 483.0 %, from $4.7 million for the three
months ended April 30, 1996 to $27.4 million for the three months ended April
30, 1997. This change reflected an increase of $20.1 million in rental
revenues, an increase of $3.2 million in merchandise sales and a decrease of
$0.6 million in franchise fee revenue. The increases in rental and merchandise
sales revenues are attributable to the acquisition of 242 video specialty stores
on the following dates: 172 on May 17, 1996; 5 on August 26, 1996; 14 on
September 30, 1996; 1 on October 1, 1996; 1 on October 25 1996; 45 on November
15, 1996; 1 on December 1, 1996; 1 on December 3, 1996; 1 on March 21, 1997 and
1 on April 10, 1997.

Rental revenues increased $20.1 million, or 837.5%, from $2.4 million for the
three months ended April 30, 1996 to $22.5 million for the three months ended
April 30, 1997. This change is solely attributable to the inclusion of $20.1
million of rental revenues from the 242 video specialty stores acquired since
May 17, 1996 as described above. Rental revenues for the Company and the
industry during the quarter ended April 30, 1997 were adversely impacted by
weather and by the release of titles that had not performed strongly at the box
office.

Merchandise sales increased $3.2 million, or 355.6%, from $0.9 million for the
three months ended April 30, 1996 to $4.1 million for the three months ended
April 30, 1997, primarily reflecting $3.5 million of merchandise sales
contributed by the 242 video specialty stores purchased since May 17, 1996.
Merchandise sales to franchisees also decreased by $0.3 million during the
period.

Franchise fee revenues decreased $0.6 million, or 42.9%, from $1.4 million for
the three months ended April 30, 1996 to $0.8 million for the three months ended
April 30, 1997. Approximately $0.3 million of this decrease is due to the
acquisition of 33 franchised stores by the Company since May 17, 1996. The
remaining $0.3 million decrease is attributable to a decline in the number of
royalty payments received from franchisees due to a decline in their business.

As a result of the Company's acquisition activities the mix of revenue sources
changed dramatically to approximately 82% rental, 15% merchandising and 3%
franchising during the quarter ended April 30, 1997 from approximately 51%, 20%
and 29%, respectively, during the quarter ended April 30, 1996.


Store Operating Expenses

Store operating expenses increased $11.3 million, or 753.3%, from $1.5 million
for the three months ended April 30, 1996 to $12.8 million for the three months
ended April 30, 1997. As a percentage of total revenues, store operating
expenses increased 14.8 percentage points from 31.9% for the three months ended
April 30, 1996 to 46.7% for the three months ended April 30, 1997. Except as
discussed below this increase was caused primarily by the decrease from 1996 to
1997 in the relative significance of the Company's franchise operations (as
measured by the decrease in franchise revenues as a percentage of total
revenues), since the franchise business involves virtually no store operating
expenses. As a percentage of rental revenues and merchandise sales, store
operating costs increased 2.6 percentage points from 45.5% for the three months
ended April 30, 1996 to 48.1% for the three months ended April 30, 1997. This

                                                                              10


<PAGE>   10
                      WEST COAST ENTERTAINMENT CORPORATION


2.6 percentage point increase is primarily due to higher rent and
utilities costs which increased from 15.0% for the three months ended April 30,
1996 to 19.9% for the three months ended April 30, 1997. Since the initial
acquisition of 172 stores on May 17, 1996 most of the remaining 70 stores
acquired are located in large metropolitan areas which generally have higher
occupancy costs. Higher occupancy costs were partially offset by a decrease in
depreciation expense related to purchase accounting for the 242 video specialty
stores.

Cost of Goods Sold

Cost of goods sold increased $2.2 million, or 314.3%, from $0.7 million for the
three months ended April 30, 1996 to $2.9 million for the three months ended
April 30, 1997, primarily as a result of an increase in merchandise sales volume
due to the acquisition of the 242 video specialty stores since May 17, 1996. As
a percentage of merchandise sales, cost of goods sold decreased by 7.1
percentage points from 77.8% for the three months ended April 30, 1996 to 70.7%
for the three months ended April 30, 1997. This decrease was primarily due to a
change in sales mix also caused by the acquisition of the 242 video specialty
stores.


Amortization of Videocassette and Video Game Rental Inventory

Amortization of Rental Inventory increased $5.0 million, or 1,250.0%, from $0.4
million for the three months ended April 30, 1996 to $5.4 million for the three
months ended April 30, 1997, primarily as a result of the acquisition of the 242
video specialty stores since May 17, 1996. As a percentage of rental revenues
this amortization increased 7.3 percentage points from 16.7% for the three
months ended April 30, 1996 to 24.0% for the three months ended April 30, 1997.
This is primarily due to the change in mix of titles offered for rent resulting
from the acquisition of the 242 video specialty stores since May 17, 1996. Prior
to these acquisitions the Company was able to purchase fewer new movie releases
due to the orientation towards catalog titles of its Boston stores, which then
generated a majority of the Company's rental revenues.


Selling, General and Administrative Expense

Selling, general and administrative expenses increased $1.6 million, or 100%,
from $1.6 million for the three months ended April 30, 1996 to $3.2 million for
the three months ended April 30, 1997. The increase is primarily related to the
additional personnel and non-store operating costs which were absorbed from the
acquisition of the 242 video specialty stores and the franchise business. As a
percentage of total revenues, however, selling, general and administrative
expenses decreased 22.3 percentage points from 34.0% for the three months ended
April 30, 1996 to 11.7% for the three months ended April 30, 1997 primarily
reflecting the ability of the Company's administrative staff to operate an
increasing number of corporate stores and, to a lesser extent, the change in
the mix of rental revenues, merchandise sales and franchise fees. Franchise fees
have higher associated selling, general and administrative costs than rental
revenues and merchandise sales.

Amortization of Intangible Assets

Intangible amortization expense increased $1.3 million, from $0.1 million for
the three months ended April 30, 1996 to $1.4 million for the three months ended
April 30, 1997. As a percentage of total revenues, intangible amortization
increased 3.0 percentage points from 2.1% for the three months ended April 30,
1996 to 5.1% for the three months ended April 30, 1997. These increases are
entirely related to amortization of goodwill associated with the acquisition of
the 242 video specialty stores since May 17, 1996.

                                                                              11


<PAGE>   11
                      WEST COAST ENTERTAINMENT CORPORATION


Interest Expense and Other

Net interest expense and other increased $0.5 million, or 166.7%, from $0.3
million for the three months ended April 30, 1996 to $0.8 million for the three
months ended April 30, 1997. Interest expense comprises almost all of this net
amount. The increase in dollars is attributable to additional interest expense
incurred in connection with the acquisition of the 242 video specialty stores.
However, as a percentage of total revenues, interest expense decreased 3.5
percentage points from 6.4% for the three months ended April 30, 1996 to 2.9%
for the three months ended April 30, 1997.


Net Income

As a result of the foregoing, net income increased $0.4 million for the three
months ended April 30, 1997 from $0.1 million for the three months ended April
30, 1996 to $0.5 million for the three months ended April 30, 1997.

Certain Factors That May Affect Future Results:

The following important factors, among others, could cause actual results of
operations to differ materially from any forward-looking statements made in this
Quarterly Report on Form 10-Q or any forward-looking statements made elsewhere
by management of the Company from time to time.

The Company's rapid growth, particularly its acquisition of 242 video specialty
stores between May 17, 1996, could strain the Company's ability to manage
operations, integrate newly acquired stores into its systems, and effectively
pursue its growth strategy. The Company competes with many others, including
Blockbuster Entertainment, having significantly greater financial and marketing
resources, market share, and name recognition than the Company. Further
developments in competing technologies could have a material adverse effect upon
the video retail industry and the Company. Industry and Company revenues are
somewhat seasonal and may be affected by many factors, including variation in
the acceptance of new release titles available for rental and sale, the extent
of competition, marketing programs, weather, the timing of any holiday weekends,
special or unusual events, and other factors that may affect retailers in
general. There can be no assurance that stores already acquired or acquired in
future will perform as expected or that the prices paid for such stores will
prove to be advantageous. The Company's effective cost of capital used to
finance acquisitions and the costs of integrating newly acquired stores into the
Company's systems may vary significantly from the amounts assumed for purposes
of the Company's pro forma financial statements. Acquisitions of stores within
the exclusive territories of existing West Coast Video(R)franchised stores may
require the Company to relocate or sell such acquired stores, assist the
franchisee to relocate, grant the franchisee additional franchises or
territorial or other rights, or include the franchisee's stores in the Company's
intended program of acquisitions. The Company's management does not have
significant experience in operating a company as large as the Company now is.
The Company's Common Stock has traded publicly only since May 14, 1996 and no
prediction can be made as to future price levels for such stock.

PRO FORMA RESULTS OF OPERATIONS

Revenues

Revenues decreased by $1.0 million or 3.5% from $28.4 million for the three
months ended April 30, 1996 to $ 27.4 million for the three months ended April
30, 1997. This decrease in revenues was mainly due to a decline in comparable
stores sales of 5.6% partially offset by the opening of new stores.

                                                                              12

<PAGE>   12
                      WEST COAST ENTERTAINMENT CORPORATION


Net Income

Pro forma net income decreased by $1.2 million or 70.6% from $ 1.7 million for
the three months ended April 30, 1996 to $0.5 million for the three months ended
April 30, 1997. This decrease in net income was primarily attributable both to a
decrease in revenues in 1997 over the comparable prior year period as well as a
change in the sales mix. Although merchandise sales increased $0.5 million, they
are less profitable than rental revenue which decreased by $1.5 million for the
three months ended April 30, 1997 as compared to the three months ended April
30, 1996. In addition, total costs and expenses (excluding interest and other
expenses) increased as a percentage of revenues by 6.5 percentage points from
87.3% for the first quarter of 1996 to 93.8% for the first quarter of 1997. This
was mainly due to the lower margins on merchandise sales because of a change in
sales mix.


LIQUIDITY AND CAPITAL RESOURCES

For the three months ended April 30, 1997, the Company had net cash provided by
operating activities of $3.0 million, net cash used in investing activities of
$9.7 million (consisting of cash used to purchase videocassette rental inventory
of $6.8 million, $1.8 million of cash used to purchase property and equipment
and $1.1 million of net cash paid for the acquisitions of new video specialty
stores acquired in such period) and net cash provided by financing activities of
$6.3 million (consisting of $8.0 million of borrowings from the Existing Credit
Facility (as described below, less $1.7 million of costs related to financing),
resulting in a net decrease in cash and cash equivalents of $0.4 million.

Prior to May 1996, the Company funded its operations and acquisitions through
cash provided by operating activities, bank loans guaranteed by its existing
stockholders, loans and lines of credit from Rental Inventory suppliers, and
financing provided by sellers in connection with certain acquisitions. On May
17, 1996 the Company raised net proceeds of $63.1 million in its Initial Public
Offering, refinanced its outstanding bank debt through its $65.0 million bank
credit facility (the "Existing Credit Facility"), paid down all of its other
outstanding indebtedness, and consummated certain acquisitions, which it expects
will increase its future flows of cash provided by operating activities. The
Company has subsequently consummated additional acquisitions. The aggregate
purchase price of such recent acquisitions has been financed through borrowings
under the Existing Credit Facility and through issuance of shares of Common
Stock to certain of the sellers.

The Company expects to meet its short-term liquidity requirements through net
cash provided by operations and borrowings under the Existing Credit Facility.
Management believes that these sources of cash will be sufficient to meet the
Company's operating needs for at least the next 12 months.

The Company is seeking to effect a private placement of $110.0 million of senior
notes (the "Proposed Private Placement") during the second fiscal quarter of the
current year and, if successful, expects to use a portion of the net proceeds
from the Proposed Private Placement to fund certain prospective acquisitions,
repay all outstanding borrowings under the Existing Credit Facility and fund the
capital commitments described below. The remaining portion of such net proceeds,
together with amounts available under a new $40.0 million bank credit facility
for which the Company has received a commitment letter (the "New Credit
Facility") will be available for future acquisitions or for other corporate
purposes. The Company has arranged for the New Credit Facility to become
effective upon consummation of the Proposed Private Placement and satisfaction
of certain other conditions. The terms of the commitment letter outlining the
New Credit Facility are described below.

The Existing Credit Facility, which is provided by a syndicate of banks for
which PNC Bank, National Association ("PNC Bank") serves as agent, consists of a
17 month revolving credit

                                                                              13
<PAGE>   13
                      WEST COAST ENTERTAINMENT CORPORATION


facility followed by a three-year term loan. Borrowings under the facility are
available for working capital, capital expenditures, refinancing of existing
indebtedness and certain permitted acquisition financing. The maximum amount
available for borrowing at any time will equal 2.75 times the Company's
operating cash flow (as defined for the Existing Credit Facility) during the
previous four quarters. At the Company's option, interest rates will vary from
either PNC Bank's base rate, as defined, at 1% above such base rate, or from the
Eurodollar rate, as defined, at 2.5% above such Eurodollar rate. At May 31, 1997
the weighted average borrowing rate was 8.25%. Borrowings are secured by a first
security interest in substantially all of the Company's assets, including the
stock of its subsidiaries. Borrowings are subject to various conditions
including compliance with certain financial tests and ratios.

The Company and PNC Bank, N.A. (the "Bank") have executed a commitment letter
(the "Commitment Letter") providing for the replacement of the Existing Credit
Facility by the New Credit Facility, conditioned upon the Proposed Private
Placement and satisfaction of certain other conditions as described below. Under
the Commitment Letter, the New Credit Facility will be a $40.0 million senior
secured revolving credit and term loan facility consisting of a two-year
reducing revolving credit facility to be followed by a three-year term loan. The
Company expects that definitive agreements to establish the New Credit Facility
will be executed substantially simultaneously with the consummation of the
Proposed Private Placement. There can be no assurance that the New Credit
Facility will, in fact, become effective. The obligation of the Bank to
consummate the transactions contemplated by the Commitment Letter is subject to
the fulfillment of certain conditions, including (i) the absence of any material
adverse change in the financial condition, operations, prospects or property of
the Company and its subsidiaries, taken as a whole (a "Material Adverse Change")
and (ii) the absence of any material adverse change in the financial markets or
the market for senior debt financing. The obligation of the Bank to provide
advances under the New Credit Facility will also be subject to the fulfillment
of certain conditions, including without limitation (I) the completion of the
Proposed Private Placement and (ii) the absence of a Material Adverse Change.

In the future, the Company may also seek additional debt financing or equity
capital through additional private or public offerings of securities.

The availability of the Proposed Private Placement or other debt financing or
equity capital will depend upon prevailing market conditions, the market price
of the Company's Common Stock and other factors over which the Company has no
control, as well as the Company's financial condition and results of operations.
The number of shares of Common Stock, if any, to be issued to sellers in
connection with future acquisitions will also be affected by such factors, since
such number will be determined in accordance with a formula based on trading
prices of the Common Stock. There can be no assurance that funds will be
available in sufficient amounts to finance the acquisition or opening of enough
video specialty stores to sustain the Company's recent rates of growth.

Capital Commitments. The cash consideration expected to be paid in connection
with certain acquisitions which the Company has identified for June and July
1997 (the "Prospective Acquisitions") including certain fees, acquisition costs
and expenses is estimated at $48.3 million.

The Company's capital expenditure plan provides for converting the stores
acquired in the Recent Acquisitions and Prospective Acquisitions to West Coast
signage and format and installing certain West Coast layout and features at a
rate of approximately 125 stores per year at an estimated cost of $32,000 per
store. The remaining aggregate costs of upgrading West Coast's management
information systems and integrating stores acquired in the Recent Acquisitions
and Prospective Acquisitions onto such systems are expected to be approximately
$1.2 million over the next 12 months.

                                                                              14

<PAGE>   14
                      WEST COAST ENTERTAINMENT CORPORATION


Build-out costs for new stores are expected to range from $325,000 to $375,000
per store. The Company expects to open approximately 40 additional stores during
the next twelve months, which number may increase if the Prospective
Acquisitions are consummated.

Approximately $7.8 million of the aggregate purchase price of certain
Prospective Acquisitions is subject to adjustment based upon the future
operating cash flow of 32 stores; any upward adjustment is payable chiefly in
cash, with a portion payable, at the Company's election, in cash or shares of
Common Stock. Over the next twelve months the Company will make additional
payments of cash and Common Stock, currently estimated at $0.4 million in the
aggregate, to the sellers of six stores purchased in connection with the Recent
Acquisitions at formulaic purchase prices based on certain financial
measurements for such stores in future periods. The Company has commitments or
options to purchase an additional 17 stores at similar formulaic prices (which
cannot yet be estimated), payable in cash.

The excess (if any) of these definitive purchase prices over current estimates
will be payable primarily in cash with a portion payable, at the Company's
election, in cash or shares of Common Stock. The purchase price for future
acquisitions may contain similar components. If such components of such purchase
prices are materially more that is initially expected, the Company will have to
deploy more cash or issue more shares of Common Stock than it budgeted for such
purpose.

Under certain cross-purchase and area development agreements, the Company will
be entitled to acquire (and, subject to certain conditions, will be required to
acquire, if the owners so elect) all of the assets of up to 55 stores operated
or to be operated by such owners at specified times between 1997 and 2002. The
purchase prices will be equal to specified multiples of the stores' net
operating cash flow; the purchase prices of 24 such stores will be payable in
shares of Common Stock and the other purchase prices will be payable in cash or
in shares of Common Stock, at the Company's election.

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. Due to
the accounting treatment of Rental Inventory as a noncurrent asset, the Company
had a working capital deficit at January 31, 1997.

                                                                              15


<PAGE>   15
                      WEST COAST ENTERTAINMENT CORPORATION


                                     PART II
                                OTHER INFORMATION


<TABLE>
<CAPTION>
<S>                        <C>
Item 1.                    Legal Proceedings
                                    Not Applicable

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
                                    Not Applicable


Item 5.                    Other Information
                                    None

Item 6.                    Exhibits and Reports on Form 8-K
                                    None
</TABLE>

                                                                              16


<PAGE>   16
                      WEST COAST ENTERTAINMENT CORPORATION


                                   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


<TABLE>
<CAPTION>
<S>                              <C>
Date:  June 16, 1997             By: /s/ T. Kyle Standley
                                     --------------------
                                     T. Kyle Standley, President and
                                     Chief Executive Officer
                                     (Principal Executive Officer)





Date:  June 16, 1997             By: /s/ Richard G. Kelly
                                     --------------------
                                     Richard G. Kelly, Chief Financial Officer
                                     (Principal Financial Officer)





Date   June 16, 1997             By: /s/ Jerry L. Misterman
                                     ----------------------
                                     Jerry L. Misterman, Chief Accounting Officer
                                     (Principal Accounting Officer)
</TABLE>

                                                                              17
<PAGE>   17
                      WEST COAST ENTERTAINMENT CORPORATION


                                   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


<TABLE>
<CAPTION>
<S>                              <C>
Date:  June 16, 1997             By: ------------------------------------
                                     T. Kyle Standley, President and
                                     Chief Executive Officer
                                     (Principal Executive Officer)





Date:  June 16, 1997             By: -----------------------------------
                                     Richard G. Kelly, Chief Financial Officer
                                     (Principal Financial Officer)





Date   June 16, 1997             By: ------------------------------------
                                     Jerry L. Misterman, Chief Accounting Officer
                                     (Principal Accounting Officer)
</TABLE>

                                                                              18