<PAGE>

================================================================================


                      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 September 24, 2001

                                      OR

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

                     Commission file number(s) - 333-83637


                        AMERICAN MEDIA OPERATIONS, INC.

          (Exact  name of the registrant as specified in its charter)
          -----------------------------------------------------------


            Delaware                                      59-2094424
(State or other jurisdiction of              (IRS Employee Identification No.)
  incorporation or organization)


 5401 N.W. Broken Sound Blvd., Boca Raton, Florida             33487
    (Address of principal executive offices)                (Zip Code)



       Registrant's telephone number, including area code (561) 997-7733




American Media Operations, Inc. (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, and (2) HAS BEEN subject to such filing requirements for
the past 90 days.


 As of November 8, 2001 there were 7,507 shares of common stock outstanding.

================================================================================
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
                              INDEX TO FORM 10-Q
                              SEPTEMBER 24, 2001


<TABLE>
<CAPTION>
                                                                                                    Page(s)
                                                                                                  ----------
              PART I. FINANCIAL INFORMATION
<S>                                                                                                <C>
Item 1. Financial Statements-
Consolidated Balance Sheets......................................................................         3
Consolidated Statements of Income (Loss).........................................................       4-5
Consolidated Statements of Comprehensive Income (Loss) ..........................................       6-7
Consolidated Statements of Cash Flows............................................................       8
Notes to Consolidated Financial Statements.......................................................       9-13
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....      14-18

Item 3. Quantitative and Qualitative Disclosures about Market Risk ..............................      18-19

              PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.........................................................      20

Signature........................................................................................      21
</TABLE>

                                       2
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                     As of September 24 and March 26, 2001
                     (in 000's, except share information)

<TABLE>
<CAPTION>
                                                                                   March 26, 2001        Sept.  24, 2001
                                                                                  ---------------         ---------------
                                               ASSETS                                                       (Unaudited)
<S>                                                                                 <C>                   <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                            $   20,999              $    6,599
  Receivables, net                                                                         25,412                  22,042
  Inventories                                                                              14,101                  19,264
  Short term note receivable                                                                  322                      --
  Prepaid expenses and other                                                                5,015                   5,269
                                                                                  ---------------         ---------------
      Total current assets                                                                 65,849                  53,174
                                                                                  ---------------         ---------------

PROPERTY AND EQUIPMENT, at cost:
  Land and buildings                                                                       10,076                  11,138
  Machinery, fixtures and equipment                                                        19,990                  24,838
  Display racks                                                                            35,380                  39,367
                                                                                  ---------------         ---------------
                                                                                           65,446                  75,343
 Less - accumulated depreciation                                                          (18,651)                (25,691)
                                                                                  ---------------         ---------------
                                                                                           46,795                  49,652
                                                                                  ---------------         ---------------
LONG TERM NOTE RECEIVABLE, net                                                                427                     800
                                                                                  ---------------         ---------------

DEFERRED DEBT COSTS, net                                                                   19,126                  17,632
                                                                                  ---------------         ---------------

GOODWILL, net of accumulated amortization of $48,232 and $61,495                          482,256                 468,993
                                                                                  ---------------         ---------------

OTHER INTANGIBLES, net of accumulated amortization of $56,275 and $71,649                 520,537                 505,164
                                                                                  ---------------         ---------------
                                                                                       $1,134,990              $1,095,415
                                                                                  ===============         ===============
                         LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
  Current portion of term loan                                                         $   14,281              $   14,189
  10.38% Senior Subordinated Notes Due 2002                                                    --                     134
  Accounts payable                                                                         30,157                  21,578
  Accrued expenses                                                                         36,035                  30,422
  Deferred revenues                                                                        33,842                  28,990
                                                                                  ---------------         ---------------
      Total current liabilities                                                           114,315                  95,313

PAYABLE TO PARENT COMPANY                                                                   2,110                   1,740
                                                                                  ---------------         ---------------

LONG TERM DEBT:
  Term Loan and Revolving Credit Commitment, net of current portion                       415,719                 408,261
       10.25% Senior Subordinated Notes Due 2009                                          250,000                 250,000
       11.63% Senior Subordinated Notes Due 2004                                              740                     740
       10.38% Senior Subordinated Notes Due 2002                                              134                      --
                                                                                  ---------------         ---------------
                                                                                          666,593                 659,001
                                                                                  ---------------         ---------------

DEFERRED INCOME TAXES                                                                     165,479                 163,918
                                                                                  ---------------         ---------------

CONTINGENCIES
STOCKHOLDER'S EQUITY:
       Common stock, $.20 par value; 7,507 shares issued and outstanding                        2                       2
       Additional paid-in capital                                                         223,298                 223,344
       Retained deficit                                                                   (36,807)                (45,912)
       Accumulated other comprehensive income (loss)                                           --                  (1,991)
                                                                                  ---------------         ---------------
       Total stockholder's equity                                                         186,493                 175,443
                                                                                  ---------------         ---------------
                                                                                       $1,134,990              $1,095,415
                                                                                  ===============         ===============
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these consolidated balance sheets.

                                       3
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
              UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                  (In 000's)


<TABLE>
<CAPTION>
                                                                    Two Fiscal          Two Fiscal
                                                                     Quarters            Quarters
                                                                      ended                ended
                                                                  Sept. 25, 2000       Sept. 24, 2001
                                                                  --------------       --------------
<S>                                                               <C>                  <C>
OPERATING REVENUES:
   Circulation                                                        $171,184             $172,698
   Advertising                                                          15,577               18,238
   Other                                                                10,101                9,092
                                                                    ----------           ----------
                                                                       196,862              200,028
                                                                    ----------           ----------

OPERATING EXPENSES:
   Editorial                                                            19,714               19,952
   Production                                                           50,120               52,989
   Distribution, circulation and other cost of sales                    39,747               39,526
   Selling, general and administrative expenses                         21,664               21,704
   Depreciation and amortization                                        36,746               38,937
                                                                    ----------           ----------
                                                                       167,991              173,108
                                                                    ----------           ----------

   Operating income                                                     28,871               26,920

INTEREST EXPENSE                                                       (35,811)             (32,970)
OTHER INCOME, net                                                          419                   81
                                                                    ----------           ----------

        Loss before provision for income taxes                          (6,521)              (5,969)

PROVISION FOR INCOME TAXES                                              (2,584)              (3,136)
                                                                    ----------           ----------

        Net loss                                                      $ (9,105)            $ (9,105)
                                                                    ==========           ==========

</TABLE>

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

                                       4
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
              UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                  (IN 000's)


<TABLE>
<CAPTION>
                                                                     Fiscal              Fiscal
                                                                    Quarter             Quarter
                                                                     Ended               Ended
                                                                Sept. 25, 2000       Sept. 24, 2001
                                                                --------------       --------------
<S>                                                             <C>                  <C>
OPERATING REVENUES:
   Circulation                                                      $ 86,512             $ 88,240
   Advertising                                                         8,529                9,387
   Other                                                               4,445                4,656
                                                                  ----------           ----------
                                                                      99,486              102,283
                                                                  ----------           ----------

OPERATING EXPENSES:
   Editorial                                                           9,668                9,700
   Production                                                         25,255               27,384
   Distribution, circulation and other cost of sales                  19,831               19,990
   Selling, general and administrative expenses                       10,981               11,206
   Depreciation and amortization                                      18,404               19,626
                                                                  ----------           ----------
                                                                      84,139               87,906
                                                                  ----------           ----------

   Operating income                                                   15,347               14,377

INTEREST EXPENSE                                                     (17,989)             (17,035)
OTHER INCOME, net                                                        232                   54
                                                                  ----------           ----------

   Loss before provision for income taxes                             (2,410)              (2,604)

PROVISION FOR INCOME TAXES                                            (1,693)              (1,916)
                                                                  ----------           ----------

   Net loss                                                         $ (4,103)            $ (4,520)
                                                                  ==========           ==========
</TABLE>

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

                                       5
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
       UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                  (IN 000's)


<TABLE>
<CAPTION>
                                                                      Two Fiscal            Two Fiscal
                                                                       Quarters              Quarters
                                                                        Ended                 Ended
                                                                      Sept. 25,             Sept. 24,
                                                                         2000                 2001
                                                                   -------------        ---------------
<S>                                                                  <C>                  <C>
Net loss                                                                 $(9,105)              $ (9,105)

Other comprehensive loss

        Interest rate swap adjustment (See Footnote 9)                        --                 (1,991)
                                                                   -------------        ---------------

Other comprehensive loss                                                      --                 (1,991)
                                                                   -------------        ---------------

Comprehensive loss                                                       $(9,105)              $(11,096)
                                                                   =============        ===============
</TABLE>

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

                                       6
<PAGE>

                AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                   (IN 000's)


<TABLE>
<CAPTION>
                                                                            Fiscal                  Fiscal
                                                                           Quarter                 Quarter
                                                                            Ended                   Ended
                                                                          Sept. 25,               Sept. 24,
                                                                             2000                    2001
                                                                       -------------          ---------------
<S>                                                                      <C>                    <C>
Net loss                                                                    $(4,103)                 $(4,520)

Other comprehensive income

        Interest rate swap adjustment (See Footnote 9)                           --                      316
                                                                       -------------          ---------------

Other comprehensive income                                                       --                      316
                                                                       -------------          ---------------

Comprehensive loss                                                          $(4,103)                 $(4,204)
                                                                       ============           ==============
</TABLE>

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

                                       7
<PAGE>

                AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (IN 000's)

<TABLE>
<CAPTION>
                                                                        Two Fiscal         Two Fiscal
                                                                         Quarters           Quarters
                                                                           Ended              Ended
                                                                      Sept. 25, 2000     Sept. 24, 2001
                                                                      --------------     --------------
<S>                                                                   <C>                <C>
Cash Flows from Operating Activities:
  Net loss                                                                  $ (9,105)          $ (9,105)
                                                                      --------------     --------------
Adjustments to reconcile net loss to net cash
 used in operating activities -
    Reduction of allowance for long term note receivable                          --               (500)
    Gain on sale of assets                                                        --                (38)
    Depreciation and amortization                                             36,746             38,937
    Deferred debt cost amortization                                            1,495              1,494
    Non-cash compensation charge                                                  --                 45
    Decrease (increase) in -
        Receivables, net                                                      (6,895)             3,692
        Inventories                                                              180             (5,163)
        Prepaid expenses and other                                             2,062               (127)
    Increase (decrease) in -
        Accounts payable                                                      (6,485)            (8,579)
        Accrued expenses                                                     (13,331)            (3,077)
        Accrued interest                                                          48               (653)
        Payable to Parent Company                                                972               (370)
        Accrued and current deferred income taxes                              2,584             (4,270)
        Deferred revenues                                                     (5,150)            (4,852)
                                                                      --------------     --------------
          Total adjustments                                                   12,226             16,539
                                                                      --------------     --------------
                 Net cash provided by operating activities                     3,121              7,434
                                                                      --------------     --------------

Cash Flows from Investing Activities:
         Capital expenditures                                                (11,790)           (13,120)
         Acquisition of business, net of cash acquired                        (7,418)            (1,164)
                                                                      --------------     --------------
                 Net cash used in investing activities                       (19,208)           (14,284)
                                                                      --------------     --------------

Cash Flows from Financing Activities:
    Term loan and revolving credit commitment principal repayments            (5,000)           (22,550)
    Proceeds from revolving credit commitment                                  5,000             15,000
                                                                      --------------     --------------
                  Net cash used in financing activities                           --             (7,550)
                                                                      --------------     --------------

Net Decrease in Cash and Cash Equivalents                                    (16,087)           (14,400)
Cash and Cash  Equivalents at Beginning of Period                             23,404             20,999
                                                                      --------------     --------------
Cash and Cash  Equivalents at End of Period                                 $  7,317           $  6,599
                                                                      ==============     ==============

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for -
    Income taxes                                                            $     77           $  8,909
    Interest                                                                  34,069             31,947
</TABLE>

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

                                       8
<PAGE>

               AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              September 24, 2001
                         (000's omitted in all tables)
                                  (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 with the instructions to Form 10-Q.  There has been no
material change in the information disclosed in the notes to consolidated
financial statements included in the Annual Report on Form 10-K of American
Media Operations, Inc. and subsidiaries for the fiscal year ended March 26,
2001.

In the opinion of management, all adjustments considered necessary for a fair
presentation have been included herein. Operating results for the fiscal period
ended September 24, 2001 are not necessarily indicative of the results that may
be expected for future periods.

(2) REVENUE RECOGNITION

Substantially all publication sales, except subscriptions, are made through
unrelated distributors.  Issues, other than special topic issues, are placed on
sale approximately one week prior to the issue date; however, circulation
revenues and related expenses are recognized for financial statement purposes on
an issue date basis (i.e., off sale date).  Special topic and monthly issues
revenue and related expenses are recognized at the on sale date.  On the date
each issue is placed on sale, we receive a percentage of the issue's estimated
sales proceeds for our publications as an advance from the distributors.  All of
our publications are sold with full return privileges.

Revenues from copy sales are net of reserves provided for expected sales
returns, which are established in accordance with generally accepted accounting
principles after considering such factors as sales history and available market
information. We continually monitor the adequacy of the reserves and make
adjustments when necessary.

Subscriptions received in advance of the issue date are recognized as income
over the term of the subscriptions as served.  Advertising revenues are
recognized in the period in which the related advertising appears in the
publications.

    Deferred revenues were comprised of the following:

<TABLE>
<CAPTION>
                                               March 26,              Sept. 24,
                                                 2001                   2001
                                             -------------          -------------
<S>                                          <C>                    <C>
        Single Copy                                $10,139                $ 5,321
        Subscriptions                               23,176                 23,227
        Advertising                                    527                    442
                                             -------------          -------------

                                                   $33,842                $28,990
                                             =============          =============
</TABLE>


                                       9
<PAGE>

Other revenues, primarily from marketing services performed for third parties by
Distribution Services, Inc. ("DSI") and Frontline Marketing, Inc. ("FMI"), are
recognized when the service is performed.   On November 27, 2000 the Company
sold its 80% owned subsidiary, FMI  (see Note 7).

(3) CERTAIN TRANSACTIONS AND MERGER

On May 7, 1999, all of the common stock of the Company's parent, American Media,
Inc. ("Media") was purchased by EMP Group LLC (the "LLC"), a Delaware limited
liability company, for $837 million pursuant to a merger of Media and EMP
Acquisition Corp. ("EMP"), a wholly owned subsidiary of the LLC (the
"Acquisition"). Proceeds to finance the Acquisition included (a) a cash equity
investment of $235 million by the LLC, (b) borrowings of $352 million under a
new $400 million senior bank facility (the "New Credit Agreement") and (c)
borrowings of $250 million in the form of senior subordinated notes (the
"Notes"). These proceeds were used to (d) acquire all of the outstanding common
stock of Media for $299.4 million, (e) repay $267 million then outstanding under
the existing credit agreement with our banks (the "Prior Credit Agreement"), (f)
retire approximately $199.3 million of Senior Subordinated Notes due 2004 and
(g) pay transaction costs (collectively (a) through (g), the "Transactions").
Upon consummation of the Transactions, EMP was merged with and into Media (the
"Merger") resulting in a change in ownership control of both Media and the
Company.

The Acquisition has been accounted for under the purchase method of accounting
in accordance with Accounting Principles Board No. 16 ("APB No. 16").  The
excess of purchase price over the fair value of net tangible assets acquired has
been allocated between identified intangible assets including the value of the
tradenames and subscription lists of the Company's publications, as determined
through an independent appraisal, with the remainder allocated to goodwill.
For the Inception Period and thereafter, intangible assets, including goodwill,
are being amortized on a straight-line basis over 20 years for tradenames and
goodwill and 9-15 years for subscription lists. Goodwill for the period from
March 30, 1999 to May 6, 1999, was amortized on a straight-line basis over 40
years and intangible assets for the period was amortized on a straight-line
basis over 25 years.

On November 1, 1999, the Company acquired all of the common stock of Globe
Communications Corp. and certain of the publishing assets and liabilities of
Globe International, Inc. (collectively, the "Globe Properties") for total
consideration of approximately $105 million, including approximately $100
million in cash and $5 million in equity of the LLC (the "Globe Acquisition").
The Globe Properties consist of several tabloid style magazines, including
Globe, National Examiner and Sun as well as other titles including Mini Mags.
Proceeds to finance the acquisition of the Globe Properties included an
expansion of our existing senior bank facility of $90 million, approximately $14
million from the Company's existing revolving line of credit and the issuance of
$5 million of equity in the LLC.  These proceeds were used to acquire the Globe
Properties and to pay transaction costs.

On July 11, 2000, the Company and the former owner of the Globe Properties
signed an agreement whereby the existing voting shareholders of the LLC
repurchased the $5 million of equity in the LLC originally issued to the former
owner.  Concurrent with this purchase, the former owner and his son resigned
their positions as directors of the board of Media.

Additionally, in July 2000, the Company bought out the remaining term of the
former owner's five year employment agreement and collected the amount due per
the net asset calculation as required in the initial purchase agreement. The net
amount paid to the former owner for these items and miscellaneous other items
was approximately $3.2 million. This adjustment was a part of the Globe
Acquisition and was therefore accounted for as an increase in goodwill.

                                       10
<PAGE>

The Globe Acquisition has been accounted for under the purchase method of
accounting in accordance with APB No. 16, and accordingly, results of operations
are included in the financial statements from the date of acquisition, and the
assets and liabilities have been recorded based upon their fair values at the
date of acquisition. The excess of purchase price over the fair value of net
tangible assets acquired has been allocated between identified intangible assets
including the value of the tradenames of the Company's publications, as
determined through an independent appraisal, with the remainder allocated to
goodwill. During the quarter ended December 25, 2000, the Company finalized the
fair values of the assets and liabilities acquired.  Goodwill and tradenames
related to the Globe Acquisition are being amortized over 20 years on a
straight-line basis.

(4) INVENTORIES

Inventories are stated at the lower of cost or market.  We use the first-in,
first-out (FIFO) cost method of valuation, which approximates market value.
Inventories are comprised of the following:

<TABLE>
<CAPTION>
                                                    March 26,         Sept. 24,
                                                       2001              2001
                                                   -----------       ------------
<S>                                                <C>               <C>
Raw materials - paper                                  $ 8,559            $13,496
Finished product - paper, production
  and distribution costs of future issues                5,542              5,768
                                                   -----------       ------------
                                                       $14,101            $19,264
                                                   ===========       ============
</TABLE>

(5) INCOME TAXES

The Company files a consolidated Federal income tax return with Media, and
calculates its income taxes on a separate return basis. Income taxes have been
provided based upon the Company's anticipated effective annual income tax rate.
In accordance with the Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes", deferred taxes are recognized for temporary
differences related to identified intangible assets other than goodwill. The
temporary difference is calculated based on the difference between the new book
bases of the amounts allocated to tradenames and subscription lists and their
historical tax bases. Accordingly, as of May 7, 1999, in connection with the
Acquisition, a deferred tax liability of approximately $162 million was recorded
with a corresponding increase in goodwill. Our effective income tax rate exceeds
the federal statutory income tax rate of 35% because of the effect of goodwill
amortization which is not deductible for income tax reporting purposes.


(6) CREDIT AGREEMENT

As of September 24, 2001, the Company's effective interest rate on borrowings
under the New Credit Agreement was 7.6%. The effective rate for borrowings under
the New Credit Agreement averaged 8.0% for the two fiscal quarters ended
September 24, 2001.  The effective rate for borrowings under the new Credit
Agreement averaged 10.0% for the two fiscal quarters ended September 25, 2000.
In order to reduce our exposure to interest rate risk, we entered into a $100.0
million interest rate swap agreement which expired in November 2000 under which
we paid a fixed rate of 5.95%.  In November 2000, we entered into a new $90.0
million interest rate swap agreement expiring in May 2002 under which we pay a
fixed rate of 6.53%.

American Media Operations, Inc. has no material assets or operations other than
investments in its subsidiaries.  The Notes are unconditionally guaranteed, on a
senior subordinated basis, by all of its subsidiaries.  Each subsidiary that
will be organized in the future by the Company, unless such subsidiary is
designated as an unrestricted subsidiary, will jointly, severally, fully and
unconditionally guarantee the Notes on a senior subordinated basis.  Note
guarantees are joint and several, full and unconditional and general unsecured
obligations of the note guarantors.  The note guarantors are the Company's
subsidiaries.  At present, the note guarantors comprise all of the Company's
direct and indirect subsidiaries. Note guarantees are subordinated in right of
payment to all existing and future senior debt of the note guarantors, including
the New Credit Facility,

                                       11
<PAGE>

and are also effectively subordinated to all secured obligations of note
guarantors to the extent of the assets securing such obligations, including the
New Credit Facility. Furthermore, the Notes indenture permits note guarantors to
incur additional indebtedness, including senior debt, subject to certain
limitations. We have not presented separate financial statements and other
disclosures concerning each of the note guarantors because management has
determined that such information is not material to investors.

So long as the factors set forth in the paragraph immediately above remain true
and correct, under applicable SEC rules and regulations, the Company's note
guarantors will not need to individually comply with the reporting requirements
of the Securities Exchange Act of 1934 ("Exchange Act"), nor will the Company
have to include separate financial statements and other disclosures concerning
each of the note guarantors in its Exchange Act reports.

(7)  SALE OF SUBSIDIARY

On November 27, 2000 the Company sold its 80% owned subsidiary, FMI, to the
minority shareholder for a $2.5 million note receivable ("The Note"). The Note
initially had a short-term component of $500,000 and a long-term component of
$2,000,000 which is payable to the Company based on defined cash flow of FMI.
The Note bears interest at 9%. Due to the uncertainty of FMI's ability to
generate defined cash flow for the repayment of The Note, the Company initially
reserved $1.6 million of The Note. No gain or loss was recognized on this
transaction. As of September 24, 2001, The Note's short-term and long-term
balances were $0 and $1,873,000, respectively, due to payments received from
FMI. During the quarter ended June 25, 2001, the Company reversed $500,000 of
the original $1.6 million reserve based on management's belief that FMI will
generate the cash flow to make future payments on this amount. This amount is
included in selling, general and administrative expenses for the two quarters
ended September 24, 2001.

(8)  INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

In June 2001, the Company formed a joint venture ("The Joint Venture") with
Fashion Wire Daily, Inc. ("FWD") to publish and distribute a fashion magazine
titled "Style 24/7" for a four issue test period.  The Company and FWD each have
a 50 percent ownership interest in The Joint Venture.  Pursuant to the terms of
the joint venture agreement, the Company and FWD each contributed $669,000 to
The Joint Venture.  The Company accounts for its investment under the equity
method of accounting since it has no controlling influence over The Joint
Venture.  The Joint Venture had a net loss of $330,000 for the quarter ended
September 24, 2001 of which 50 percent is included in selling, general and
administrative expenses for the quarter ended September 24, 2001.  Accordingly,
the Company reduced its investment by 50 percent of the net loss of The Joint
Venture.  The Company's investment in The Joint Venture of $504,000 is included
in prepaid expenses and other current assets as of September 24, 2001.

(9)  DERIVATIVES AND HEDGING - ADOPTION OF SFAS NOS. 133 AND 138

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 133,
"Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities
(an amendment of FASB Statement No. 133)" on March 27, 2001.  The Company
reports all derivative instruments on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in earnings or
comprehensive income, depending on the designation of the derivative.  Changes
in the fair value of derivatives that are not designated as a hedge are reported
immediately in earnings.

The Company documents all relationships between derivative hedging instruments
and hedged items, as well as its risk-management objective and strategy for
entering into various hedge transactions.

                                       12
<PAGE>

As a result of adopting SFAS No. 133, the Company recorded the fair market value
of the liability of $2,065,000 on March 27, 2001 and the change in the fair
market value during the two quarters ended September 24, 2001 of a reduction of
the liability of $74,000 relating to their cash flow variable debt hedge as a
charge to other comprehensive loss.


(10)  LITIGATION

Various suits and claims arising in the ordinary course of business have been
instituted against the Company.  The Company has various insurance policies
available to recover potential legal costs incurred by it.  The Company
periodically evaluates and assesses the risks and uncertainties associated with
litigation independent from those associated with its potential claim for
recovery from third party insurance carriers.  At present, in the opinion of
management, after consultation with outside legal counsel, the liability
resulting from litigation, if any, will not have a material effect on the
Company's financial position and results of operations.

(11)  SUBSEQUENT EVENT

The Company's Boca Raton headquarters, which housed substantially all editorial
operations (including its photo, clipping and research libraries), executive
offices and certain administrative functions, was closed on October 7, 2001 by
the Palm Beach Department of Health when traces of anthrax were found on a
computer keyboard following the death of a photo editor of the Sun from
inhalation anthrax. In response to the closure of the Boca facility, the Company
immediately implemented its hurricane disaster plan to produce all the weekly
publications as originally scheduled. The Company has temporarily moved its
editorial operations into a facility being leased on a short-term basis, which
allows AMI to produce the impacted publications weekly without interruption. We
will remain in this leased facility until the Palm Beach Health Department deems
the Boca Raton facility is safe to return to, or if we are unable to return,
until we find a new headquarters. The Company has property insurance on its Boca
Raton headquarters and on the building's contents and also has business
interruption insurance. The amount of any potential loss and related insurance
recovery is indeterminable at this time.

                                       13
<PAGE>

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

Results of Operations

Fiscal Quarter Ended September 24, 2001 vs Fiscal Quarter Ended September 25,
2000

Total operating revenues were $102,283,000 for the current fiscal quarter.
Operating revenues increased by $2,797,000, or 2.8%, from the prior year's
comparable fiscal quarter.  Results in the current fiscal quarter reflect a loss
of revenue from discontinued/sold operations of $1.4 million. Circulation
revenue for continuing publications increased $2.2 million primarily due to
increased cover prices.  Advertising revenues increased 10.1%, from $8.5 million
to $9.4 million, despite a weak industry-wide advertising climate.

Circulation revenues (which include all single copy and subscription sales) were
$88,240,000 for the current fiscal quarter.  Circulation revenues increased by
$1,728,000, or 2.0%, when compared to the prior year's comparable fiscal
quarter.  Circulation revenue for continuing publications increased $2.2 million
primarily due to increased cover prices.  Subscription revenues were $9,331,000
for the current fiscal quarter.  Subscription revenues increased by $637,000, or
7.3%, when compared to the prior year's comparable fiscal quarter.

Advertising revenues were $9,387,000 for the current fiscal quarter.
Advertising revenues increased by $858,000, or 10.1%, when compared to the prior
year's comparable fiscal quarter.  This increase is primarily due to additional
advertising revenues from our tabloids (National Enquirer and Star magazines --
$0.7 million) and from MIRA! ($0.4 million).

Total operating expenses for the current fiscal quarter increased by $3,767,000
when compared to the prior year's comparable fiscal quarter.  Results in the
quarter reflect an increase in depreciation expense of $1.2 million and
increased production expenses of $2.1 million in the current fiscal quarter
versus the prior year's comparable fiscal quarter.

Interest expense decreased for the current fiscal quarter by $954,000 to
$17,035,000 compared to the prior year's comparable fiscal quarter. This
decrease in interest expense relates to a lower average effective interest rate.

Our effective income tax rates exceed the federal statutory income tax rate of
35% because of the effect of goodwill amortization which is not deductible for
income tax reporting purposes.


Two Fiscal Quarters Ended September 24, 2001 vs Two Fiscal Quarters Ended
September 25, 2000

Total operating revenues were $200,028,000 for the two current fiscal quarters.
Operating revenues increased by $3,166,000, or 1.6%, from the prior year's
comparable fiscal quarters.  Results in the two current fiscal quarters reflect
a loss of revenue from discontinued/sold operations of $3.5 million. Circulation
revenue for continuing publications increased $2.9 million primarily due to
increased cover prices.  Advertising revenues increased 17.1%, from $15.6
million to $18.2 million, despite a weak industry-wide advertising climate.

Circulation revenues (which include all single copy and subscription sales) were
$172,698,000 for the two current fiscal quarters.   Circulation revenues
increased by  $1,514,000, or 0.9%, when compared to the two prior year's
comparable fiscal quarters.  Circulation revenue for continuing publications
increased $2.9 million primarily due to increased cover prices.  These
circulation gains were offset by the loss of circulation revenues from
discontinued/sold publications.  Subscription revenues were $18,120,000 for the
two current fiscal

                                       14
<PAGE>

quarters. Subscription revenues increased by $619,000, or 3.5%, when compared to
the two prior year's comparable fiscal quarters.

Advertising revenues were $18,238,000 for the two current fiscal quarters.
Advertising revenues increased by $2,661,000, or 17.1%, when compared to the two
prior year's comparable fiscal quarters.  This increase is primarily due to
additional advertising revenues from our tabloids (National Enquirer and Star
magazines -- $1.5 million), and increased advertising revenues from MIRA! ($0.9
million).

Total operating expenses for the two current fiscal quarters increased by
$5,117,000 when compared to the two prior year's comparable fiscal quarters.
Results in the two quarters reflect an increase in depreciation expense of $2.3
million and increased production expenses of $2.9 million in the current fiscal
quarters versus the prior year's comparable two fiscal quarters.

Interest expense decreased for the two current fiscal quarters by $2,841,000 to
$32,970,000 compared to the two prior year's comparable fiscal quarters. This
decrease in interest expense relates to a lower average effective interest rate.

Our effective income tax rates exceed the federal statutory income tax rate of
35% because of the effect of goodwill amortization which is not deductible for
income tax reporting purposes.


Subsequent Event

The Company's Boca Raton headquarters, which housed substantially all editorial
operations (including its photo, clipping and research libraries), executive
offices and certain administrative functions, was closed on October 7, 2001 by
the Palm Beach Department of Health when traces of anthrax were found on a
computer keyboard following the death of a photo editor of the Sun from
inhalation anthrax.  In response to the closure of the Boca facility, the
Company immediately implemented its hurricane disaster plan to produce all the
weekly publications as originally scheduled.  The Company has temporarily moved
its editorial operations into a facility being leased on a short-term basis,
which allows AMI to produce the impacted publications weekly without
interruption. We will remain in this leased facility until the Palm Beach Health
Department deems the Boca Raton facility is safe to return to, or if we are
unable to return, until we find a new headquarters.   The Company has property
insurance on its Boca Raton headquarters and on the building's contents and also
has business interruption insurance.  The amount of any potential loss and
related insurance recovery is indeterminable at this time.

     As a result of the above, we have cancelled all expanded issues (72 page
folio versus 48 page folio) through December 31, 2001 that were scheduled to be
on sale after October 7, 2001.

     We believe as a result of the anthrax incident, we have experienced a
decline in circulation.  When the incident first occurred, there were specific
concerns and consumer discomfort and lack of knowledge with respect to the
safety of our magazines.  The Company quickly responded to safety concerns with
an extensive public relations effort to educate consumers that there was no
health risk in buying our magazines.  Since the first issues following the
anthrax incident, we have witnessed a steady improvement in unit sales, although
they remain below normalized levels.

                                       15
<PAGE>

     LIQUIDITY AND CAPITAL RESOURCES

We have substantially increased our indebtedness in connection with the
Transactions and the Globe Acquisition (see Note 3).   As a result of the New
Credit Agreement and the Notes, our liquidity requirements have been
significantly increased, primarily due to increased interest and principal
payment obligations under the New Credit Agreement which, other than certain
excess cash flow payment obligations, will commence in fiscal 2002.  We believe
that the net cash generated from operating activities and amounts available
under the $60.0 million revolving credit facility will be sufficient to fund our
debt service requirements under the New Credit Agreement and the Notes, to make
capital expenditures and to cover working capital requirements.  As of November
8, 2001, there was $5.0 million outstanding on the revolving credit facility.
We believe, however, that based upon our current level of operations and
anticipated growth, it will be necessary to refinance the Notes upon their
maturity. To the extent we make future acquisitions, we may require new sources
of funding, including additional debt, or equity financing or some combination
thereof. There can be no assurances that such additional sources of funding will
be available to us on acceptable terms.

Our ability to make scheduled payments of principal and interest under the New
Credit Agreement and the  Notes, as well as our other obligations and
liabilities, is subject to our future operating performance which is dependent
upon general economic, financial, competitive, legislative, regulatory, business
and other factors beyond our control.

At September 24, 2001, we had cash and cash equivalents of $6.6 million and a
working capital deficit of $42.1  million.  We do not consider our working
capital deficit to be a true measure of our liquidity position as our working
capital needs typically are met by cash generated by our business. Our working
capital deficit results principally from:

 .  our policy of using available cash to reduce borrowings which are recorded as
   noncurrent liabilities, thereby reducing current assets without a
   corresponding reduction in current liabilities;

 .  our minimal accounts receivable level relative to revenues, as most of our
   sales revenues are received from national distributors as advances based on
   estimated single copy circulation; and

 .  accounting for deferred revenues as a current liability. Deferred revenues
   are comprised of deferred subscriptions, advertising and single copy revenues
   and represent payments received in advance of the period in which the related
   revenues will be recognized.

Historically, our primary sources of liquidity have been cash generated from
operations and amounts available under our credit agreements, which have been
used to fund shortfalls in available cash.  Cash on hand on March 26, 2001 of
$21.0 million was used to fund working capital requirements (including interest
and tax payments of $40.9 million) as well as to fund capital expenditures.

We made capital expenditures in the two fiscal quarters ended September 24, 2001
and September 25, 2000 totaling $13.1 million and $11.8 million, respectively.

At September 24, 2001, our outstanding indebtedness totaled $673.3 million, of
which $422.4 represented borrowings under the New Credit Agreement.  In
connection with the acquisition of the Globe Properties as discussed in Note 3.
to the Consolidated Financial Statements, we expanded our New Credit Agreement
by $90 million. As of September 24, 2001, the Company's effective interest rate
on borrowings under the New Credit Agreement was 7.6%. The effective rate for
borrowings under the New Credit Agreement averaged 8.0% for the two fiscal
quarters ended September 24, 2001.  The effective rate for borrowings under the
New Credit Agreement averaged 10.0% for the two fiscal quarters ended September
25, 2000.   In order to reduce our exposure to interest rate risk, we entered
into a $100.0 million interest rate swap agreement which expired in November
2000 under which we paid a fixed rate of 5.95%.  In November 2000, we entered
into a new $90.0

                                       16
<PAGE>

million interest rate swap agreement expiring in May 2002 under which we pay a
fixed rate of 6.53%.

We have no material assets or operations other than the investments in our
subsidiaries. The Notes are unconditionally guaranteed, on a senior subordinated
basis, by all of our subsidiaries. Each subsidiary that will be organized in the
future by us, unless such subsidiary is designated as an unrestricted
subsidiary, will jointly, severally, fully and unconditionally guarantee the
Notes on a senior subordinated basis.  Note guarantees are joint and several,
full and unconditional and general unsecured obligations of the note guarantors.
The note guarantors are  our  subsidiaries.  At  present,  the note  guarantors
comprise  all of our direct and  indirect  subsidiaries.  Note guarantees are
subordinated in right of payment to all existing and future senior debt of  the
note guarantors, including the New Credit Facility, and are also effectively
subordinated to all secured obligations of note guarantors to the extent of the
assets securing such obligations, including the New Credit Facility.
Furthermore, the Notes indenture permits note guarantors to incur additional
indebtedness, including senior debt, subject to certain limitations.  We have
not presented separate financial statements and other disclosures concerning
each of the note guarantors because management has determined that such
information is not material to investors.

So long as the factors set forth in the paragraph immediately above remain true
and correct, under applicable SEC rules and regulations, we believe that note
guarantors will not need to individually comply with the reporting requirements
of the Exchange Act, nor will we have to include separate financial statements
and other disclosures concerning each of the note guarantors in its Exchange Act
reports.


Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")

The following table and discussion summarizes EBITDA for the three and six
months ended September 24, 2001 and September 25, 2000.

<TABLE>
<CAPTION>
                                                        Two Fiscal             Two Fiscal
      Fiscal Quarter            Fiscal Quarter           Quarters               Quarters
          Ended                     Ended                 Ended                   Ended
      September 25,             September 24,         September 25,            September 24,
          2000                      2001                   2000                    2001
------------------------    --------------------    ---------------------   ------------------
<S>                         <C>                     <C>                     <C>
       $33,751,000               $34,003,000             $65,617,000            $65,857,000
</TABLE>

The Company defines EBITDA as net income (loss) before extraordinary charges,
interest expense, income taxes, depreciation and amortization and other income
(expense). EBITDA is presented and discussed because the Company considers
EBITDA an important indicator of the operational strength and performance of its
business including the ability to provide cash flows to service debt and fund
capital expenditures.  EBITDA, however, should not be considered an alternative
to operating or net income (loss), as an indicator of the performance of the
Company, or as an alternative to cash flows from operating activities as a
measure of liquidity, in each case determined in accordance with generally
accepted accounting principles ("GAAP").

New Accounting Pronouncement

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" ("SFAS No. 142").  Under SFAS No. 142, goodwill is no longer subject to
amortization over its estimated useful life.  Rather, goodwill is subject to an
annual assessment for impairment by applying a fair-value based test.  The
standard is effective for fiscal years beginning after December 15, 2001.  The
Company has yet to determine the impact of the standard on its financial
position and results of operations.

                                       17
<PAGE>

Forward-Looking Statements

Some of the information presented in this Form 10-Q constitutes forward-looking
statements, including, in particular, the statements about our plans, strategies
and prospects under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations.''  We have based these forward-
looking statements on our current assumptions, expectations and projections
about future events. We caution you that a variety of factors could cause
business conditions and results to differ materially from what is contained in
the forward-looking statements. These forward-looking statements are subject to
risks, uncertainties and assumptions about us, including, among other things:

<TABLE>
<S>                                          <C>
 .  our high degree of leverage and           .  increasing competition by domestic
   significant debt service obligations,        and foreign media companies,

 .  our ability to increase circulation and   .  changes in the costs of paper used
   advertising revenues,                        by us,

 .  market conditions for our publications,   .  any future changes in management and

 .  our ability to develop new publications   .  general risks associated with the
   and services,                                publishing industry.
</TABLE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks that are inherent in our financial
statements.  We are subject to interest risk on our credit facilities and any
future financing requirements.  Our fixed rate debt consists primarily of Senior
Subordinated Notes, as well as $90 million of interest rate swap agreements on
our term loan.  The interest rate swap agreements effectively convert a portion
of our variable rate debt to fixed-rate debt.  The interest rate swap agreement
which expired in November 2000 had a fixed interest rate of 5.95%.  In November
2000, we entered into a new $90.0 million swap agreement expiring in May 2002
under which we pay a fixed rate of 6.53%.

                                       18
<PAGE>

The following table presents the future principal payment obligations and
weighted average interest rates associated with our existing credit instruments
assuming our actual level of indebtedness (in 000's):

<TABLE>
<CAPTION>
                                                                       Fiscal Year Ended
                                            ---------------------------------------------------------------
                                                     2002              2003           2004     Thereafter
                                                     ----              ----           ----     ----------
<S>                                               <C>               <C>            <C>           <C>
  Liabilities:

  $250,000 Fixed Rate (10.25%)                          -                 -              -       $250,000

  $740 Fixed Rate (11.63%)                              -                 -              -       $    740

  $134 Fixed Rate (10.38%)                              -           $   134              -              -

  Term Loan and Revolving Loan
  Variable Rate (8.0 % for the two
     quarters ended September 24, 2001)           $ 6,489           $16,611        $21,456       $377,894
   Interest Rate Derivatives:
      Interest Rate Swaps:
          Variable to Fixed                       $90,000                 -              -              -
          Average Pay Rate                          (6.53%)
         Average Receive Rate                       (5.23%)
</TABLE>

Interest rate changes result in increases or decreases in our income before
taxes and cash provided from operating activities.  A 1% change in our weighted
interest rate on our variable debt net of the effect of our interest rate swap
would result in a change of $831,000 in our interest expense for the three
months ended September 24, 2001.

Our primary market risk exposures relate to (1) the interest rate risk on long-
term and short-term borrowings, (2) our ability to refinance our Senior
Subordinated Notes at maturity at market rates, (3) the impact of interest rate
movements on our ability to meet interest expense requirements and comply with
financial covenants and (4) the impact of interest rate movements on our ability
to obtain adequate financing to fund acquisitions.  We manage the interest rate
risk on our outstanding long-term and short-term debt through our use of fixed
and variable rate debt.  While we cannot predict or manage our ability to
refinance existing debt or the impact interest rate movements will have on our
ability to refinance existing debt or the impact interest rate movements will
have on our existing debt, we continue to evaluate our financial position on an
ongoing basis.

                                       19
<PAGE>

PART II. OTHER INFORMATION
--------------------------

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

During the fiscal quarter ended September 24, 2001, the Company filed no reports
on Form 8-K.

                                       20
<PAGE>

                                   SIGNATURE


Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant  has duly caused this report to be signed by the
undersigned, thereto duly authorized.

                                          AMERICAN MEDIA OPERATIONS, INC.
                                          -------------------------------
                                          Registrant


Date: November 8, 2001                    By /s/ JOHN A. MILEY
                                          --------------------
                                          John A. Miley
                                          Executive Vice President
                                          Chief Financial Officer




                                       21