<PAGE>   1

                    U. S. Securities and Exchange Commission
                            Washington, D. C. 20549


                                  FORM 10-QSB




(MARK ONE)

  X    Quarterly Report pursuant to Section 13 or 15(d) of the
----   Securities Exchange Act of 1934

For the Quarterly Period Ended  November 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 0-18091

                               RSI HOLDINGS, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

         NORTH CAROLINA                              56-1200363
----------------------------------           -------------------------
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                  Identification No.)

245 E. Broad Street, Suite A, P. O. Box 6847
Greenville, South Carolina                                          29606
------------------------------------------------------------------------------ 
                    (Address of principal executive offices)

                                 (864) 271-7171
     ----------------------------------------------------------------------
                            Issuer's telephone number


                                 Not Applicable
     -----------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
   -----     -----



<PAGE>   2



State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock, $.01 Par Value - 7,900,822 shares outstanding as of January 8,
1998

         Transitional Small Business Disclosure Format (check one):
          Yes         No   X
             -------    -------




<PAGE>   3


                                      INDEX


                               RSI HOLDINGS, INC.




PART I.  FINANCIAL INFORMATION                                             PAGE

Item 1.  Financial Statements (Unaudited)

     Condensed consolidated balance sheet -- November 30, 1997                4

     Condensed consolidated statement of operations -- Three
     months ended November 30, 1997 and 1996                                  5

     Condensed consolidated statement of cash flows -- Three 
     months ended November 30, 1997 and 1996                                  6

     Notes to condensed consolidated financial statements --
     November 30, 1997                                                        7

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  9

PART II. OTHER INFORMATION                                                   14

Item 1.  Legal Proceedings                                                   14

Item 2.  Changes in Securities                                               16

Item 3.  Default                                                             16

Item 4.  Submission of Matters to a Vote of Security Holders                 16

Item 5.  Other Information                                                   16

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

SIGNATURES                                                                   18


                                        3


<PAGE>   4


                               RSI Holdings, Inc.
                Condensed Consolidated Balance Sheet (Unaudited)
                                November 30, 1997


<TABLE>

<S>                                                               <C>       
Assets

Current Assets:
     Cash                                                         $  688,000
     Certificate of deposit                                          100,000
     Notes receivable                                                271,000
     Accounts receivable                                               7,000
     Prepaid expenses                                                 21,000
                                                                  ----------
Total current assets                                               1,087,000

Property and equipment
     Cost                                                            208,000
     Less accumulated depreciation                                    32,000
                                                                  ----------
                                                                     176,000
Other assets
     Restricted cash                                                 500,000
     Other                                                            15,000
                                                                  ----------
                                                                     515,000
                                                                  ----------
                                                                  $1,778,000
                                                                  ==========
Liabilities and shareholders' equity 
Current liabilities:
     Trade accounts payable                                       $  106,000
     Accrued expenses                                                138,000
     Notes payable                                                   287,000
                                                                  ----------
                                                                     531,000

Deferred compensation                                                103,000

Shareholders' equity:
     Common Stock, $.01 par value-authorized
          25,000,000 shares, issued and outstanding
          7,900,822 shares at November 30, 1997                       79,000
     Excess of paid-in capital over par value                      3,776,000
     Deficit                                                      (2,711,000)
                                                                  ----------
                                                                   1,144,000

Contingencies (Note C)
                                                                  ----------
                                                                  $1,778,000
                                                                  ==========
</TABLE>

See accompanying notes.

                                        4



<PAGE>   5

                               RSI Holdings, Inc.
           Condensed Consolidated Statement of Operations (Unaudited)
                 Three Months ended November 30, 1997 and 1996


<TABLE>
<CAPTION>
                                                          1997                1996
                                                      -----------          -----------
<S>                                                   <C>                  <C>        
Revenues:
     Origination fees                                 $   117,000          $         0
     Gain on sale of loans                                 26,000                    0
                                                      -----------          -----------
         Total revenues                               $   143,000          $         0


Expenses
     Selling, general and administrative                  408,000          $   145,000
                                                      -----------          -----------
         Loss from operations                            (265,000)            (145,000)

Other income (expense)
     Interest income                                       15,000               34,000
     Rental income on asset held for sale                   6,000                7,000
     Gain on sale of real estate                           74,000                    0
     Interest expense                                      (4,000)              (4,000)
     Cost to settle lawsuit                               (42,000)            (300,000)
                                                      -----------          -----------
         Total other income (expense)                      49,000             (263,000)
                                                      -----------          -----------
Net loss                                              $  (216,000)         $  (408,000)
                                                      ===========          ===========

Net loss per share                                    $      (.03)         $      (.05)
                                                      ===========          ===========

Weighted average number of shares outstanding           7,900,822            7,973,019
                                                      ===========          ===========
</TABLE>





See accompanying notes.

                                        5


<PAGE>   6

                               RSI Holdings, Inc.
           Condensed Consolidated Statement of Cash Flows (Unaudited)
                  Three Months ended November 30, 1997 and 1996



<TABLE>
<CAPTION>
                                                          1997                 1996
                                                      -----------          -----------
<S>                                                     <C>                  <C>         
Cash used in operating activities                     $  (516,000)         $  (412,000)

Investing activities
     Proceeds from sale of property                       321,000
     Acquisition of outstanding stock of
         HomeAdd Financial Corporation                                         (15,000)
     Purchase of equipment                               (153,000)
     Purchase of common stock                                                  (25,000)
     Organization expense                                                      (13,000)
     Other                                                  9,000
                                                      -----------          -----------
Net cash provided by (used in) investing activities       177,000              (53,000)
                                                      -----------          -----------
Financing activities
     Advances under bank lines of credit                1,327,000
     Payments on bank line of credit                   (1,059,000)
                                                      -----------
Net cash provided by financing activities                 268,000
                                                      -----------          -----------
Decrease in cash and cash equivalents                     (71,000)            (465,000)

Cash and cash equivalents at beginning of year            759,000            2,256,000
                                                      -----------          -----------
Cash and cash equivalents at end of quarter           $   688,000          $ 1,791,000
                                                      ===========          ===========

</TABLE>



See accompanying notes.

                                        6


<PAGE>   7

RSI Holdings, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Note A - Basis of Presentation 

         The accompanying unaudited condensed consolidated financial statements
at November 30, 1997 have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments including normal recurring accruals considered
necessary for a fair presentation have been included. Operating results for the
three months ended November 30, 1997 are not necessarily indicative of the
results that may be expected for the year ended August 31, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10 - KSB for the year
ended August 31, 1997. 

Note B - Sale of Real Property

         On November 19, 1997, the Company sold a parcel of real estate that was
located in Tampa, Florida for $425,000 less selling expenses of approximately
$28,000. The depreciated cost of the property was $248,000. The purchase price
was paid in a combination of cash and a $75,000 promissory note. The note is
secured by a second mortgage and bears interest at 8.5% per annum and is payable
by the purchaser over ten years. The gain on the sale is recognized under the
cost recovery method. The gain to date recognized on the sale of the property of
$74,000 is included in the results of operations for the period ended November
30, 1997.

              The principal balance of the note receivable is offset in the
accompanying balance sheet by the gain that will be recognized as income as the
principal amount of the note receivable is collected. Such amounts that have
been deferred are as follows:

<TABLE>
<S>                                                <C>    
              Due within one year                  $ 5,000
              Due after one year                    70,000
                                                   -------
                                                   $75,000
                                                   =======
</TABLE>


Note C - Contingencies

         On November 18, 1996, Wiegmann & Rose International Corp. ("Wiegmann &
Rose"), a wholly-owned subsidiary of the Company, entered into an agreement to
settle a lawsuit brought by Triple A Machine Shop, Inc. ("Triple A") relating to
environmental contamination on property formerly owned by Wiegmann & Rose and
sold to Triple A in 1987. Pursuant to the settlement agreement Wiegmann & Rose
paid to Triple A the sum of three hundred thousand ($300,000) dollars in
exchange for settlement of the lawsuit as well as Triple A's release of Wiegmann
& Rose and the Company from any further liability to Triple A in connection with
the property or under the agreement made at the time of the sale of property.



                                        7
<PAGE>   8

         The Company is one of several defendants in a lawsuit filed in July
1993 claiming indemnification with respect to payments due and the cost of
performing certain covenants and obligations under a land lease agreement
allegedly in default. During December 1997, an agreement in principal was
reached among the parties to settle this lawsuit. The proposed settlement that
involves the payment by the Company of $42,000 to end claims by all parties to
this litigation. The Company understands that settlement documents are currently
being prepared. The settlement amount of $42,000 is accrued in the accompanying
statements as of November 30, 1997.

         Wiegmann & Rose has also been sued, along with several other
defendants, in seven personal injury asbestos suits. Although, Wiegmann & Rose
has been dismissed without prejudice in each of the seven suits, Wiegmann could
be brought back into the litigation in five of these seven dismissed cases. No
provisions have been made in the accompanying financial statements for any
liability which may result from this matter.

         In addition, in January 1995, a complaint against the Company seeking
damages in excess of the minimal jurisdictional amount was served. The plaintiff
in that case alleges that he was injured while operating a vehicle that was sold
by the Company. The Complaint also named the manufacturer of the vehicle. The
manufacturer has accepted defense of the Company regarding this matter. The
Company believes, based on the arrangements with the manufacturer and the
Company's own insurance, that this action should not have a material adverse
effect on the Company's financial position.




                                        8


<PAGE>   9


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

General

         Special Cautionary Notice Regarding Forward-Looking Statements.

         This Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act and 21E of the Exchange Act.
Forward-looking statements are indicated by such terms as "expects", "plans",
"anticipates", and words to similar effect. Such forward-looking statements are
subject to known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company to be
materially different from future results, performance or achievements expressed
or implied by such forward-looking statements. Important factors ("Cautionary
Statements") that could cause the actual results, performance or achievements of
the Company to differ materially from the Company's expectations are disclosed
in this Report on Form 10-QSB including, without limitation, those factors
discussed in the paragraph immediately preceding the heading "Liquidity and
Capital Resources" on page 12 and otherwise herein. All written or oral
forward-looking statements attributable to the Company are expressly qualified
in their entirety by the Cautionary Statements. The Company does not undertake
to publicly update or revise its forward-looking statements even if experience
or future changes make it clear that any projected results expressed or implied
herein will not be realized.

Results of Operations

         The Company acquired a consumer loan business during fiscal year 1997.
The Company has no other business operations. The following discussion of the
results of operations during the three months ended November 30, 1997 relates to
the consumer loan business.

         Revenues were $143,000 during the three months ended November 30, 1997
and consisted of loan origination fees and gain from the sale of the loans made.
There were no revenues during the three months ended November 30, 1996.

         General and administrative expenses include expenses incurred by
HomeAdd of $293,000 during the three months ended November 30, 1997 as compared
to $44,000 during the three months ended November 30, 1996. The remaining
general and administrative expenses primarily consist of salaries, legal, audit
and other administrative expenses incurred by the Company. The HomeAdd expenses
primarily relate to advertising, salaries, and various administrative expenses
of HomeAdd.

         The real property located in Tampa, Florida was sold during November
1997 for $425,000 less selling expenses of $28,625. The depreciated cost of the
property was $248,000. The purchase price was paid in a combination of cash and
a $75,000 promissory note. The note is secured by a second mortgage on the
property. The property is subject to a first mortgage with a bank that is
payable by the purchaser of the property in the amount of approximately
$319,000. Because of the purchaser's relatively small equity in the property,
there can be no assurance that the Company would be able to recover the
principle amount of the note if the purchaser were to default on the note.
Neither can there be any assurance that the Company will receive timely payments
on the note. Gain to the extent of the proceeds represented by the note
receivable is deferred and will be recognized as income as the principal

                                        9


<PAGE>   10

amount of the note receivable is collected. The remaining gain on sale of the
property of $74,000 is included in the results of operations for the period
ended November 30, 1997.

         The results of operations for the three months ended November 30, 1997
included $42,000 accrued as the amount expected to be paid to settle the lawsuit
relating to Holiday Inns, Inc. litigation involving RSI Corporation and Sparjax
Corporation. Under the terms of an agreement in principle that was reached
during December 1997, the Company will be required to pay $42,000 to end claims
by all parties to this litigation against the Company, RSI Corporation or
Sparjax Corporation. For further discussion of the settlement of the lawsuit,
reference is made to Part II, Item 1, "Legal Proceedings," which is incorporated
herein by reference.

         HomeAdd offers high loan-to-value loans ("HLTV Loans") to certain
qualified borrowers that permit the loan proceeds to be used for debt
consolidation and home improvements. Under the terms of these HLTV loans,
HomeAdd will make loans secured by a second or third mortgage in which the loans
can be up to 125% of the estimated fair value of the real property. A qualified
borrower is required to be a homeowner with acceptable levels of income and have
an acceptable credit history. Approximately 97% of loan volume during the three
months ended November 30, 1997 consisted of HLTV Loans. The Company expects that
most of the loans made during fiscal 1998 will be HLTV Loans.

         HomeAdd also offers Title I home improvement loans ("Title I Loans")
under the Title I program administrated by the Federal Housing Administration
("FHA"). HomeAdd was approved by FHA as a Title I lender during 1995. The Title
I program was established by Title I of the National Housing Act of 1934. Loans
made under the Title I program are 90% guaranteed by the United States
Department of Housing and Urban Development ("HUD"). In addition to the FHA
Title I license, HomeAdd has to apply for licenses to operate under the banking
laws of each State in which this business chooses to operate. Approximately 3%
of HomeAdd's loan volume during the three months ended November 30, 1997 were
Title I home improvement loans. The Company does not expect Title I home
improvement loans to be a material portion of its business during fiscal 1998.

         HomeAdd is currently authorized to operate under the laws of South
Carolina and North Carolina. HomeAdd is subject to ongoing monitoring by
regulatory authorities and the failure to comply with applicable regulations
could result in the forfeiture of licenses on which the business is dependent.

         The Company sells substantially all of the loans it originates on a
non-recourse basis in the secondary market. The non-recourse basis means that
the Company represents that loans were properly documented and made in
accordance with applicable lending criteria, but that the purchaser of the loans
assumes the full credit risk. The Company's credit guidelines for the Company's
loans currently meet the underwriting criteria of the current loan purchasers.
During the three months ended November 30, 1997, the Company made loans
aggregating $1,461,000 of which $42,000 in loans were made under the Title I
Loan program and $1,419,000 in loans were made under the HLTV Loan program.
Substantially all of the loans were sold on a non-recourse basis in the
secondary market ($271,000 of these were sold during December of 1997).

         As of November 30, 1997, HomeAdd had ten employees. The initial office
in Greenville, South Carolina includes sales, underwriting and administrative
personnel. An additional sales office in Charlotte, North Carolina opened on
April 1, 1997, but the Company determined that it was more cost effective to
generate its

                                       10


<PAGE>   11

loan activities through direct mail solicitations directed to the Charlotte area
from its Greenville, South Carolina office, accordingly, the Charlotte, North
Carolina office was closed during October of 1997. The Company currently has no
plans to open additional sales offices. The Company currently plans to attempt
to increase its volume of loans made by soliciting in additional markets, first
in North Carolina and then possibly other Southeastern States. During September
1997, the Company began soliciting loans in the Greensboro/Winston Salem, North
Carolina area and during January 1998 began soliciting in the Raleigh/Durham,
North Carolina area. The Company faces stiff competition in these markets.
Additional personnel will be added when and if the volume of loans increases to
a level that requires the additional personnel. If HomeAdd achieves its budgeted
operating goals, the Company estimates that 14 employees will be required by
HomeAdd at August 31, 1998. There is no assurance, however, that its operating
goals can be accomplished.

         The consumer finance market is highly competitive and fragmented.
HomeAdd competes with a number of finance companies that provide financing to
individuals who may not have sufficient equity in their homes to qualify for
traditional second mortgage financing. HomeAdd also competes with established
home improvement lenders, other Title I lenders (many of whom are now making
HLTV Loans), existing mortgage brokers and bankers that offer multi-purpose
second mortgages. To a lesser extent, HomeAdd competes with commercial banks,
savings and loan associations, credit unions, insurance companies, and captive
finance arms of major manufacturing companies that may apply more traditional
lending criteria and require greater equity in the underlying real property
assets. Almost all of these competitors or potential competitors are
substantially larger and have significantly greater capital, experience and
other resources than the Company.

         The Company expects that during the next twelve months the increase in
its business, if any, will be in HLTV Loans. Title I home improvement loans are
not expected to be a material factor in its business during the next twelve
months.

         Debt consolidation and home equity loan volume generally are not
materially impacted by seasonal climate changes and, with the exclusion of
slowdowns during the holiday and vacation seasons, tends to be relatively stable
throughout the year. Home improvement loan volume generally tracks the
seasonality of home improvement contract work. Volume tends to build during the
spring and early summer months. A decline is typically experienced in late
summer and early fall until temperatures begin to drop. This change in seasons
precipitates the need for new siding, window and insulation contracts. Peak
volume is generally experienced in November and early December and declines
dramatically from the holiday season through the winter months.

         HomeAdd attempts to sell, on a non-recourse basis, all of its loans on
the secondary market to wholesale buyers. HomeAdd does not have the capital that
would be necessary to make a significant volume of loans unless it is able
promptly to sell its loans on the secondary market. There can be no assurance
that the secondary market for loans will continue to be available to HomeAdd.
Adverse changes in the secondary market could materially impair HomeAdd's
ability to originate and sell loans on a favorable or timely basis. Delays in
the sale of a loan pool beyond a quarter-end could result in greater losses for
such quarter. If HomeAdd is unable to sell its loans on the secondary market,
its ability to grow could be materially impaired and its results of operations
and financial condition could be materially adversely affected. See Liquidity
and Capital Resources - Capital Requirements for HomeAdd.

         A portion of the revenues projected in HomeAdd's business plan is
dependent on the continuation of the Title I Loan program, which is federally
funded. The Title

                                       11


<PAGE>   12

I Loan program provides that qualifying loans are eligible for FHA insurance. In
September of 1997, a HUD official told a group of lenders that the FHA Title I
home improvement program will have to demonstrate that it is needed and
satisfies certain "core issues" in order to survive. In August of 1995, bills
were introduced in both houses of the United States Congress that would, among
other things, abolish HUD, reduce federal spending for housing and community
development activities and eliminate the Title I Loan program. Other changes to
HUD have been proposed, which, if adopted, could materially and adversely affect
the operation of the Title I Loan program. Discontinuation of or a significant
reduction in the Title I Loan program or HomeAdd's authority to originate loans
under the Title I Loan program would have an adverse effect on the ability of
HomeAdd to carry out its business plan.

         The Company expects that HomeAdd will continue to operate at a loss
during, at a minimum, fiscal year 1998, but based on its business plan,
currently expects HomeAdd to operate at a modest profit by fiscal 1999.
Management expects that the Company as a whole will operate at a loss during
fiscal 1999. The foregoing are forward-looking statements and the Company
cautions that there can be no assurance that the goal of profitability can be
achieved. An important factor which could cause the Company's results to differ
materially from the forward-looking statement include lower origination volume
due to real estate market conditions that might affect the appraised values of
the real property that would be used as collateral for the loans that HomeAdd
plans to originate. HomeAdd's business might be reduced if values of the
collateral increase and HomeAdd's customers might then qualify for more
traditional sources of credit such as banks. Another important factor is the
adverse consequences of changes in interest rate environment such as increases
in rates that might reduce the number of customers that would be willing to
execute loans at the higher rates. Other factors that could cause the Company's
results to differ materially from the forward-looking statement include, but are
not limited to, the following: inability of borrowers to repay their loans and
the increased risk of default in that this would adversely affect the ability of
the Company to sell its loans; the limited operating history of lending
operations in that HomeAdd has only had a Title I lending license since November
of 1995 and most of its personnel were employed by HomeAdd during fiscal year
1997; general economic conditions in the Company's market, including inflation,
recession, interest rates and other economic factors that might affect the
credit rating of its customers in which case HomeAdd would no longer be able to
make loans to these potential customers with reduced credit ratings because
HomeAdd would not be able to sell the loans for an amount that would be
profitable for HomeAdd; loss of funding sources, particularly since the Company
currently only has arrangements for a credit facility with one bank; loss of
ability to sell loans since the Company does not have sufficient resources to
finance holding a substantial number of loans to their maturity; general lending
risks that might result in HomeAdd making uncollectible loans or loans that it
would be unable to sell; dependence on Federal programs particularly since the
need to continue the Title I Loan program is now under discussion by HUD
officials; impact of competition, particularly since almost all of HomeAdd's
competitors or potential competitors, particularly banks, are substantially
larger and have significantly greater capital, experience and other resources
than the Company, and many competitors and potential competitors, particularly
banks, already have existing relationships with the Company's potential
customers; regulation of lending activities in that HomeAdd, in addition to the
FHA Title I license discussed below, operates under the banking laws of various
States; changes in the regulatory environment in that both the Federal
government and each State in which HomeAdd operates might make changes in the
regulations under which HomeAdd operates or in the interpretation of existing
regulations at any time and HomeAdd may not be able to comply with these
regulations; and dependence on key executives, particularly since HomeAdd and
the Company have a limited number of personnel.


                                       12


<PAGE>   13

Liquidity and Capital Resources

         Anticipated Liquidity Requirements

         As discussed below under "Cash and Cash Equivalents" and "Debt
Arrangements," the Company currently has substantial cash liquidity and,
although there can be no assurance in this regard, anticipates that such capital
resources will be sufficient to enable the Company to meet its liquidity
requirement during the next twelve months.

         Refer to Item 1 of Part II, "Legal Proceedings" for a discussion of the
Company's contingent liabilities.

         Sale of real property

         The Company executed a contract to sell its office and warehouse
facility in Tampa, Florida for $425,000, less certain selling expenses, during
August of 1997. The sale was consummated on November 19, 1997. Under the terms
of the agreement, the Company agreed to finance $75,000 of this sales price over
ten years and will hold a second mortgage on the Tampa property bearing interest
at 8.5% interest. The Company can offer no assurance as to the creditworthiness
of the purchaser of the building. Proceeds from the sale of the Tampa facility
were applied first to the payment of expenses related to the sale, and remaining
proceeds were used to provide operating capital for HomeAdd.

         Cash and Cash Equivalents

         Cash and cash equivalents in the amount of $688,000 as of November 30,
1997 included certificates of deposits issued by a bank in the amount of
$201,000 and United States treasury bills with a maturity of three months when
purchased and having a cost basis of $224,000. Cash in excess of the amounts
invested in United States treasury bills is invested as available in a money
market fund, which may be liquidated by the Company to meet its cash needs on a
daily basis. The Company earned approximately $7,000 on its cash and cash
equivalents investments during the three months ended November 30, 1997.

         U. S. Treasury Bill

         The Company is required as described in the following paragraph to
maintain an investment in HomeAdd of $500,000. On November 28, 1997, a U. S.
Treasury bill with a face value of $515,000 matured and was subsequently
reinvested in a Federal Home Loan Bank Bond that matures on June 19, 1997 at
$500,000 and bears interest at 5.9%. The investments of HomeAdd earned
approximately $7,000 during the three months ended November 30, 1997.

         Debt Arrangements

         During December of 1996, HomeAdd executed a warehouse line of credit
with a bank in the amount of $500,000 that is used to finance loans made to
third parties in connection with its consumer finance business. The loans made
by HomeAdd are collateral for this line of credit. This line of credit bears
interest at the bank's prime rate plus one percent. During August of 1997,
HomeAdd executed an amendment to the line of credit agreement in which, among
other things, the bank extended the time for repayment of an advance from
fifteen days to twenty-five days. Under the terms of the loan agreement and an
agreement that the Company has executed with HomeAdd, HomeAdd is required to
maintain tangible net worth of at least $500,000. See the next paragraph for the
amount of net worth required by HUD. The

                                       13


<PAGE>   14

bank also requires that this tangible net worth include certain specified assets
with maturity of five years or less in the amount of $500,000. This line expires
on April 30, 1998.

         Capital Requirements for HomeAdd

         During the year ended August 31, 1997, the Company invested $924,000 in
HomeAdd and during the three months ended November 30, 1997 invested an
additional $208,000. The investment was used as follows: acquisition of common
stock - $15,000, equipment rental for first year - $18,000, purchase of U. S.
Treasury bill - $500,000, purchase of money market account - $25,000 and
operating capital of $654,000. HUD requires that HomeAdd have an adjusted net
worth of at least $250,000. Given its cash and cash equivalents position, the
Company believes that it has the capacity to provide the additional capital that
will be required by HomeAdd during fiscal 1998. The Company presently
anticipates that it will need additional external sources of capital at least by
fiscal year 1999 and presently intends to explore an increase in a bank line of
credit.

         Year 2000

         The Company has assessed key financial, informational and operational
systems. Management does not anticipate that the Company will encounter
significant operational issues relating to the Year 2000 problem. Furthermore,
the financial impact of making required systems changes is not expected to be
material to the Company's consolidated financial position, results of operations
or cash flows.

PART II.  Other information

ITEM 1. Legal Proceedings

         Environmental Litigation

         On November 18, 1996, Wiegmann & Rose International Corp. ("Wiegmann &
Rose"), a wholly-owned subsidiary of the Company, entered into an agreement to
settle a lawsuit brought by Triple A Machine Shop, Inc. ("Triple A"). The
lawsuit related to environmental contamination on property formerly owned by
Wiegmann & Rose and sold to Triple A in 1987. Pursuant to the settlement
agreement Wiegmann & Rose paid to Triple A the sum of three hundred thousand
($300,000) dollars. In addition to the settlement of the lawsuit, Triple A
released Wiegmann & Rose and the Company from any further liability to Triple A
in connection with the property or under the agreement made at the time of sale
of the property to Triple A.

         Asbestos Litigation

         Wiegmann & Rose is also one of numerous defendants with respect to
seven claims for exposure to asbestos, arising in the normal course of business.
All seven of these claims have been dismissed without prejudice with respect to
Wiegmann & Rose, and the applicable statute of limitations has passed with
respect to at least two of the dismissed claims. The dismissed claims are made
in the following lawsuits, in each case seeking unspecified damages for injury
allegedly due to asbestos exposure: (i) Brophy v. Abex et al. (filed April 9,
1992), pending in the San Francisco, California Superior Court, seeks damages
for wrongful death allegedly due to asbestos exposure. Wiegmann & Rose has been
dismissed without prejudice in this action and the applicable statute of
limitations has now run, barring any subsequent action by the plaintiff against
Wiegmann & Rose. (ii) Canga v. Abex et al. (filed March 18, 1993), pending in
the San Francisco Superior Court, seeks damages for personal injuries allegedly
due to asbestos exposure. Wiegmann & Rose

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<PAGE>   15

has been dismissed without prejudice in this action. Recent case law,
interpreting the asbestos statute of limitations statutory provision, suggests
that plaintiff now may be foreclosed from filing suit against the Company. In
any event, even if the Company could be brought back into the litigation, the
Company continues to believe that it is unlikely that plaintiff would do so
given the number of relatively "deep pocket" defendants in the case. (iii)
Jordison v. Abex et al. (filed January 21, 1994), pending in the San Francisco
Superior Court, seeks damages for personal injuries allegedly due to asbestos
exposure. The case against Wiegmann & Rose has been dismissed without prejudice.
Recent case law, interpreting the asbestos statute of limitations statutory
provision, suggests that plaintiff now may be foreclosed from filing suit
against the Company. In any event, even if the Company could be brought back
into the litigation, the Company continues to believe that it is unlikely that
plaintiff would do so given the number of relatively "deep pocket" defendants in
the case. (iv) Barnes v. Abex et al. (filed December 3, 1993), pending in the
San Francisco Superior Court, seeks damages for wrongful death allegedly due to
asbestos exposure. The case against Wiegmann & Rose has been dismissed without
prejudice, and the applicable statute of limitations has run, barring any
subsequent action by plaintiff against Wiegmann & Rose. (v) Richardson v. Abex
et al. (filed July 20, 1993), pending in the San Francisco Superior Court, seeks
damages for personal injuries allegedly due to asbestos exposure. The case
against Wiegmann & Rose has been dismissed without prejudice. Recent case law,
interpreting the asbestos statute of limitations statutory provision, suggests
that plaintiff now may be foreclosed from filing suit against the Company. In
any event, even if the Company could be brought back into the litigation, the
Company continues to believe that it is unlikely that plaintiff would do so
given the number of relatively "deep pocket" defendants in the case. (vi)
Sorensen v. Abex et al. (filed July 20, 1993), pending in the San Francisco
Superior Court, seeks damages for personal injuries allegedly due to asbestos
exposure. The case against Wiegmann & Rose has been dismissed without prejudice.
Recent case law, interpreting the asbestos statute of limitations statutory
provision, suggests that plaintiff now may be foreclosed from filing suit
against the Company. In any event, even if the Company could be brought back
into the litigation, the Company continues to believe that it is unlikely that
plaintiff would do so given the number of relatively "deep pocket" defendants in
the case. (vii) Hall v. Abex et al. (filed February 25, 1994), pending in the
San Francisco Superior Court, seeks damages for personal injuries allegedly due
to asbestos exposure. The case against Wiegmann & Rose has been dismissed
without prejudice. Recent case law, interpreting the asbestos statute of
limitations statutory provision, suggests that plaintiff now may be foreclosed
from filing suit against the Company. In any event, even if the Company could be
brought back into the litigation, the Company continues to believe that it is
unlikely that plaintiff would do so given the number of relatively "deep pocket"
defendants in the case.

         As to the substantive nature of the asbestos claims, the Company
believes that if it could be brought back into the litigation, that valid
defenses would be available. The Company also believes that this is the reason
that the Company has been successful in having all seven of these filed actions
dismissed without prejudice against Wiegmann & Rose.

         No actions involving asbestos are currently pending.

         Insurance

         The Company has been reimbursed for substantially all of its defense
costs relating to the environmental and asbestos claims against Wiegmann & Rose
described above, under a reservation of rights, by its two primary insurance
companies. The Company is seeking reimbursement of the $300,000 settlement
discussed above, but

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<PAGE>   16

there can be no assurance that insurance coverage will be available to reimburse
the Company for the $300,000 settlement. Presently, the Company and Wiegmann &
Rose's insurance carriers are attempting to negotiate a settlement of this
claim. If no settlement is reached, the Company and/or Wiegmann & Rose's
insurance carrier may initiate litigation to resolve the reimbursement claim.

         Holiday Inns, Inc. Litigation

         RSI Corporation (now Delta Woodside), the former parent corporation of
the Company, and Sparjax Corporation, RSI Corporation's now-dissolved
subsidiary, are among several defendants in a lawsuit filed on July 29, 1993 by
Holiday Inns, Inc. in the Circuit Court of the Fourth Judicial Circuit for Duval
County, Florida. This lawsuit is described in detail in the Company's annual
report on Form 10-KSB for the fiscal year ended August 31, 1997.

         The trial court recently removed the case from the trial docket upon
being notified that a settlement between Sam Spevak, the owner of the property,
and Holiday Inns and WMI, Inc. (and its individual guarantors) has been reached.
Counsel for the Company has asked for and are awaiting receipt of the settlement
documents. Counsel for the Company has been advised that the settlement amount
is less than $2,000,000. During December 1997, an agreement in principal was
reached to settle the Holiday Inn claim against the Company, RSI Corporation and
Sparjax Corporation as well as a number of other defendants. The settlement
involves the payment by the Company of $42,000 to end claims by all parties to
this litigation against the Company, RSI Corporation and Sparjax Corporation.
The Company is informed that settlement documents are currently being prepared.
There can be no assurance that the settlement will be consummated. The $42,000
settlement has been accrued in the accompanying financial statements.

         Other Litigation

         On January 12, 1995, a Mr. Cesar A. Cuenca served a complaint against
the Company in the 11th Judicial Circuit Court, Dade County, Florida seeking
damages in excess of the minimal jurisdictional amount of the Court, exclusive
of costs and interest, and demanding costs of the action together with such
further relief as the Court shall deem fit. The Plaintiff alleges that he was
injured while operating a vehicle that was sold by the Company. The Complaint
also named the manufacturer of the vehicle. The manufacturer has agreed to
provide full and complete indemnification to the Company based on the facts
known to date. There have been no allegations of any active negligence on the
part of the Company other than that it sold what is alleged to have been a
defective product. Accordingly, unless additional allegations are made against
the Company, the Company expects to continue to receive full indemnity and
defense from the manufacturer. The Company believes, based on the arrangements
with the manufacturer of the vehicle and the Company's own insurance, that there
is no known exposure to the Company from this litigation.

ITEM 2.   CHANGES IN SECURITIES*

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES*

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*

ITEM 5.   OTHER INFORMATION*

*Items 2, 3, 4 and 5 are not presented as they are not applicable or the
information required thereunder is substantially the same as information
previously reported.


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ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Listing of Exhibits

                27     Financial Data Schedule (electronic filing only)

         (b)    Reports on Form 8-K

         There were no reports on Form 8-K filed during the fiscal quarter ended
November 30, 1997.




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                                   SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




                                               RSI HOLDINGS, INC.
                                           --------------------------



 January 14, 1998                          /s/ Joe F. Ogburn
-------------------                        --------------------------
     (Date)                                Joe F. Ogburn,
                                           Vice President and Treasurer
                                           (Principal Accounting Officer)





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