<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


For The Quarter Ended        September 30, 2001
--------------------------------------------------------------------------------


Commission file number        0-7024
--------------------------------------------------------------------------------


                              THE FIRST YEARS INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Massachusetts                              04-2149581
--------------------------------------------------------------------------------
    (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                 Identification No.)


                One Kiddie Drive, Avon, Massachusetts 02322-1171
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (508) 588-1220
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       n/a
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X  .  No   .
   ---      ---
The number of shares of Registrant's common stock outstanding on October 31,
2001 was 9,185,509.


<PAGE>

                              THE FIRST YEARS INC.


                                     INDEX
                                     -----

                                                             Page
                                                             ----
PART I - FINANCIAL INFORMATION:

Condensed Consolidated Balance Sheets                        1

Condensed Consolidated Statements of Income                  2

Condensed Consolidated Statements of Cash Flows              3

Notes to Condensed Consolidated Financial Statements         4 - 7

Management's Discussion and Analysis of Financial
  Condition and Results of Operations                        8 - 12

Quantitative and Qualitative Disclosure about
  Market Risk                                                12

PART II - OTHER INFORMATION

Other Information                                            13

SIGNATURES                                                   14

EXHIBIT INDEX                                                15




<PAGE>


                    THE FIRST YEARS INC.

            CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                               ASSETS
                                                                              September 30,              December 31,
                                                                                  2001                       2000
                                                                               ------------              ------------
                                                                               (Unaudited)
<S>                                                                            <C>                       <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                    $ 22,910,299              $ 21,180,242
  Accounts receivable, net                                                       23,664,280                19,527,429
  Inventories                                                                    14,699,872                18,443,713
  Prepaid expenses and other assets                                               1,329,239                   756,357
  Deferred tax assets                                                             2,069,900                 2,069,900
                                                                               ------------              ------------
         Total current assets                                                    64,673,590                61,977,641
                                                                               ------------              ------------

PROPERTY, PLANT, AND EQUIPMENT:
  Land                                                                              167,266                   167,266
  Building                                                                        5,360,485                 5,254,150
  Machinery and molds                                                             7,569,813                 7,233,145
  Furniture and equipment                                                         7,372,297                 6,269,346
                                                                               ------------              ------------
         Total                                                                   20,469,861                18,923,907
  Less accumulated depreciation                                                  10,395,641                 9,207,168
                                                                               ------------              ------------
         Property, plant, and equipment - net                                    10,074,220                 9,716,739
                                                                               ------------              ------------

TOTAL ASSETS                                                                   $ 74,747,810              $ 71,694,380
                                                                               ============              ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                        $ 10,532,958              $ 11,605,240
  Accrued royalty expenses                                                          350,308                   946,623
  Accrued selling expenses                                                        2,456,253                 3,023,528
                                                                               ------------              ------------
         Total current liabilities                                               13,339,519                15,575,391
                                                                               ------------              ------------

DEFERRED TAX LIABILITY                                                            1,216,200                 1,216,200
                                                                               ------------              ------------

STOCKHOLDERS' EQUITY:
  Common stock                                                                    1,074,526                 1,067,934
  Paid-in-capital                                                                 9,170,793                 8,714,711
  Retained earnings                                                              66,361,493                60,985,483
   Less treasury stock at cost, 1,560,039
   and 1,503,572 shares as of September 30,
   2001 and December 31, 2000, respectively                                     (16,414,721)              (15,865,339)
                                                                               ------------              ------------
                  Total stockholders' equity                                     60,192,091                54,902,789
                                                                               ------------              ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $ 74,747,810              $ 71,694,380
                                                                               ============              ============
</TABLE>




     See accompanying notes to condensed consolidated financial statements.

                                     Page 1


<PAGE>


                              THE FIRST YEARS INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                                          Three Months Ended                     Nine Months Ended
                                                            September 30,                          September 30,
                                                   -------------------------------       ----------------------------------
                                                       2001               2000               2001                 2000
                                                   -----------         -----------       ------------          ------------

<S>                                                <C>                 <C>               <C>                   <C>
NET SALES                                          $36,402,060         $32,237,407       $103,695,869          $103,260,591

COST OF PRODUCTS SOLD                               23,379,600          20,936,771         66,183,882            66,700,314
                                                   -----------         -----------       ------------          ------------

GROSS PROFIT                                        13,022,460          11,300,636         37,511,987            36,560,277

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                            9,702,420           8,423,062         27,988,929            25,135,500
                                                   -----------         -----------       ------------          ------------

OPERATING INCOME                                     3,320,040           2,877,574          9,523,058            11,424,777

OTHER INCOME:

  Interest Income                                      160,442             215,200            522,318               511,510
                                                   -----------         -----------       ------------          ------------

INCOME BEFORE INCOME TAXES                           3,480,482           3,092,774         10,045,376            11,936,287

PROVISION FOR INCOME TAXES                           1,427,000           1,252,600          4,118,600             4,790,000
                                                   -----------         -----------       ------------          ------------

NET INCOME                                         $ 2,053,482         $ 1,840,174       $  5,926,776          $  7,146,287
                                                   ===========         ===========       ============          ============

BASIC EARNINGS PER SHARE                           $      0.22         $      0.19       $       0.64          $       0.75
                                                   ===========         ===========       ============          ============

DILUTED EARNINGS PER SHARE                         $      0.22         $      0.19       $       0.63          $       0.74
                                                   ===========         ===========       ============          ============

</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                                     Page 2


<PAGE>


                              THE FIRST YEARS INC.

             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
                  NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     2001                  2000
                                                                                 ------------          ------------
<S>                                                                              <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                     $  5,926,776          $  7,146,287
  Adjustments to reconcile net income to net cash provided by operations:
         Depreciation                                                               1,660,998             1,538,204
         Provision for doubtful accounts                                              272,680                29,208
         Loss on disposal of equipment                                                346,673               271,962
  Increase (decrease) arising from working capital items:
         Accounts receivable                                                       (4,409,531)           (2,396,415)
         Inventories                                                                3,743,841             3,867,545
         Prepaid expenses and other expenses                                         (549,183)              171,539
         Accounts payable and accrued expenses                                     (1,072,282)              610,393
         Accrued royalties                                                           (596,315)             (845,852)
         Accrued selling expense                                                     (567,275)              (25,019)
         Deferred income taxes                                                              0              (106,500)
                                                                                 ------------          ------------
             Net cash provided by operating activities                              4,756,382            10,261,352
                                                                                 ------------          ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
         Expenditures for property, plant, and equipment                           (2,365,152)           (1,877,560)
                                                                                 ------------          ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
         Cash dividend                                                               (550,766)             (573,299)
         Common stock issued under stock option plans                                 306,468               519,572
         Purchase of treasury stock                                                  (416,875)           (3,625,695)
                                                                                 ------------          ------------
             Net cash used for financing activities                                  (661,173)           (3,679,422)
                                                                                 ------------          ------------

INCREASE IN CASH AND CASH EQUIVALENTS                                               1,730,057             4,704,370
                                                                                 ------------          ------------

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                     21,180,242            13,400,728
                                                                                 ------------          ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                         $ 22,910,299          $ 18,105,098
                                                                                 ============          ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

         Cash paid for:
                  Income taxes                                                   $  3,788,803          $  3,599,735
                                                                                 ============          ============

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:

       Treasury stock transactions                                               $    132,507          $          0
                                                                                 ============          ============


</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                     Page 3


<PAGE>

                              THE FIRST YEARS INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Amounts in the accompanying balance sheet as of December 31, 2000 are
     condensed from the Company's audited balance sheet as of that date. All
     other condensed financial statements are unaudited but, in the opinion of
     the Company, contain all normal recurring adjustments necessary to present
     fairly the financial position as of September 30, 2001, and the results of
     operations and cash flows for the periods ended September 30, 2001 and
     2000. Certain reclassifications were made to prior year amounts in order to
     conform to the current year presentation. The preparation of financial
     statements in conformity with generally accepted accounting principles
     requires management to make estimates and assumptions that affect the
     reported amounts of assets and liabilities and disclosures of contingent
     assets and liabilities at the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting period.
     Actual results could differ from those estimates.

2.   The Company has 50,000,000 authorized shares of $.10 par value common stock
     with 10,745,264 and 10,679,337 issued and 9,185,225 and 9,175,765 shares
     outstanding as of September 30, 2001 and December 31, 2000, respectively.

     On May 3, 2001 the Board of Directors authorized a $0.06 per share annual
     cash dividend, which was paid on June 15, 2001 to holders of record at the
     close of business on May 30, 2001.

     During the first nine months of 2001, the Company purchased 42,700 shares
     of the Company's common stock on the open market. The cost of the shares
     amounted to $416,875 and are currently being held as treasury shares.

3.   Computation of the Earnings Per Share ("EPS") in accordance with SFAS No.
     128 is as follows:

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                      ----------------------------
                                                         2001              2000
                                                      ----------        ----------

<S>                                                    <C>               <C>
WEIGHTED AVERAGE SHARES OUTSTANDING                    9,188,724         9,497,607

EFFECT OF DILUTIVE SHARES                                181,615           157,369
                                                      ----------        ----------

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING            9,370,339         9,654,976
                                                      ==========        ==========

NET INCOME                                            $2,053,482        $1,840,174
                                                      ==========        ==========

BASIC EARNINGS PER SHARE                              $     0.22        $     0.19
                                                      ==========        ==========

DILUTED EARNINGS PER SHARE                            $     0.22        $     0.19
                                                      ==========        ==========
</TABLE>



                                     Page 4


<PAGE>

                              THE FIRST YEARS INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Con't)

3.   Cont.

<TABLE>
<CAPTION>

                                                            Nine Months Ended
                                                              September 30,
                                                       ---------------------------
                                                          2001             2000
                                                       ----------       ----------

<S>                                                     <C>              <C>
WEIGHTED AVERAGE SHARES OUTSTANDING                     9,190,831        9,573,960

EFFECT OF DILUTIVE SHARES                                 148,532          119,979
                                                       ----------       ----------

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING             9,339,363        9,693,939
                                                       ==========       ==========

NET INCOME                                             $5,926,776       $7,146,287
                                                       ==========       ==========

BASIC EARNINGS PER SHARE                               $     0.64       $     0.75
                                                       ==========       ==========

DILUTED EARNINGS PER SHARE                             $     0.63       $     0.74
                                                       ==========       ==========
</TABLE>

     As of September 30, 2001 options to purchase 438,990 shares of common stock
     were not included in the computations of diluted EPS because the options'
     exercise price was greater than the average price of the Company's common
     stock. The options, which expire in 2007 to 2009, had exercise prices
     ranging from $13.50 to $17.00 per share.

     As of September 30, 2000, options to purchase 451,070 shares of common
     stock were not included in the computation of diluted EPS because the
     options' exercise price was greater than the average price of the Company's
     common shares. The options, which expire in 2007 to 2009 had exercise
     prices ranging from $13.50 to $17.00 per share.

4.   The results of operations for the nine month period ended September 30,
     2001 are not necessarily indicative of the results to be expected for the
     full year.

5.   During the first nine months of 2001 and 2000, the Company did not borrow
     against its $10,000,000 unsecured line of credit established with a bank.

6.   On January 1, 2001, the Company adopted the provisions of Statement of
     Financial Accounting Standards (SFAS) No. 133 "Accounting for Derivative
     Instruments and Hedging Activities". This statement establishes accounting
     and reporting standards for derivative instruments. Specifically, it
     requires that an entity recognize all derivatives as either assets or
     liabilities on the balance sheet at fair value. The accounting for changes
     in the fair value of a derivative (that is, unrealized gains or losses)
     will be recorded as a component of an entity's net income or other
     comprehensive income, depending upon designation (as



                                     Page 5


<PAGE>


                              THE FIRST YEARS INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Con't)



     defined in the statement). The adoption of SFAS No. 133 was not material to
     the Company's consolidated financial statements.

     During 2000, the Emerging Issues Task Force (EITF) issued EITF No. 00-10,
     "Accounting for Shipping and Handling Fees and Costs". EIFT No. 00-10
     addresses the statements of earnings classification of shipping and
     handling costs billed to customers and was effective for the fourth quarter
     of 2000. The adoption of EITF No. 00-10 resulted in a reclassification of
     $1,814,140 and $5,738,294 of shipping and handling costs for the three and
     nine-month periods ended September 30, 2000, respectively from selling,
     general and administrative expenses to cost of products sold to conform
     with the current year presentation.

     In May of 2000 the EITF reached consensus on Issue No. 00-14, "Accounting
     for Certain Sales Incentives." The consensus in EITF No. 00-14 addresses
     the recognition, measurement and income statement classification for
     various types of sales incentives, including discounts, consumer coupons,
     rebates and free products. The consensus requires, amongst other things,
     certain refunds or rebates of the selling price of a product be classified
     as a reduction of revenue, versus a selling, general and administrative
     expense.

     In April of 2001 the EITF reached consensus on Issue 00-25, "Vendor Income
     Statement Characterization of Consideration from a Vendor to a Retailer."
     The consensus in EITF No. 00-25 addresses the income statement
     classification of "slotting fees", cooperative advertising arrangements and
     "buydowns". The consensus requires these customer promotional payments to
     be classified as a reduction of revenue, versus a selling, general and
     administrative expense.

     The Company is required to adopt the consensus in both EITF Issue No. 00-14
     and 00-25 no later than the first quarter of fiscal year 2002. The
     implementation of these Issues will result in a reduction to net sales and
     a corresponding reduction to selling, general and administrative expenses
     in the consolidated statement of income. However, the implementation of
     these Issues will not affect net income.



                                     Page 6

<PAGE>

                              THE FIRST YEARS INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Con't)



     In July 2001, the Financial Accounting Standards Board issued Statement No.
     141 (SFAS No. 141), "Business Combinations", which eliminated the pooling
     method of accounting effective June 30, 2001, and Statement No. 142 (SFAS
     No. 142), "Goodwill and Other Intangible Assets." SFAS 142 includes
     requirements to test goodwill and indefinite lived intangible assets for
     impairment rather than amortize them. SFAS No. 142 will be adopted in
     fiscal 2002. The Company does not expect the adoption of these standards to
     have a material effect on its consolidated financial statements.


7.   The Company derives sales from products carrying The First Years brand as
     well as products sold under licensing agreements. During the first nine
     months of 2001 and 2000, net sales of The First Years brand products were
     $69,186,000 and $68,110,000, respectively, while net sales derived from
     license and specialty products amounted to $34,510,000 and $35,151,000 in
     the first nine months of 2001 and 2000, respectively. Net export sales,
     primarily to Europe, Canada, South America, and the Pacific Rim, were
     approximately $11,652,000 and $11,221,000 during the first nine months of
     2001 and 2000, respectively.



















                                     Page 7


<PAGE>


                              THE FIRST YEARS INC.

PART I, ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Statements in this Quarterly Report on Form 10-Q that are not strictly
historical are "forward looking" statements, as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
typically identified by the words: believe, expect, anticipate, intend, are
confident, estimate and similar expressions, which by their nature refer to
future events. Actual future results may differ materially from those
anticipated depending on a variety of factors which include, but are not limited
to, trends in sales of The First Years Brand and licensed products including the
effect of slowing economic activity as a result of the September 11 terrorist
attacks, continued success of new Disney character refreshed graphics, continued
success of market research identifying new product opportunities, successful
introduction of new products, continued product innovation, the success of new
enhancements to the Company's brand image, growth in international sales,
ability to attract and retain key personnel, and growth in sales and earnings.
Information with respect to risk factors is contained in Exhibit 99 to the
Company's most recent Annual Report on Form 10-K as filed with the Securities
and Exchange Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company does not intend to update any of the forward looking statements after
the date of this Report to conform these statements to actual results or changes
in our expectations, except as required by law.

A. Results of Operations -- Third Quarter of 2001 Compared with Third Quarter of
2000

Net income for the third quarter of 2001 was $2.1 million or $0.22 per diluted
share, compared with $1.8 million or $0.19 per diluted share in 2000. Net sales
for the third quarter of 2001 were $36.4 million, compared with $32.2 million in
the comparable period in 2000. The increase in net sales was partly due to a
shift of a significant amount of one major account's purchases from the second
quarter to the third, and from pipeline shipments of a new licensed product
program to another major account.

Cost of products sold for the third quarter of 2001 was $23.4 million, an
increase of $2.5 million from the comparable period in 2000, principally due to
increased sales. As a percentage of sales, cost of products sold for the third
quarter of 2001 decreased to 64% from 65% in the comparable period of 2000,
principally due to product mix and planned product cost savings.





                                     Page 8


<PAGE>


                              THE FIRST YEARS INC.

PART I, ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Con't)

Selling, general, and administrative expenses for the third quarter of 2001 were
$9.7 million, an increase of $1.3 million from the comparable period in 2000.
The increase is primarily attributable to increased payroll and payroll-related
costs and also higher selling and product development costs associated with
increased product development and marketing efforts. As a percentage of net
sales, selling, general, and administrative expenses for the third quarter of
2001 increased to 27% from 26% in the comparable period of 2000.

In accordance with generally accepted accounting principles, the Company
provides for income taxes on an interim basis using its anticipated effective
income tax rate.

B. Results of Operations -- First Nine Months of 2001 Compared with First Nine
Months of 2000

Net income for the first nine months of 2001 was $5.9 million or $0.63 per
diluted share, compared with $7.1 million or $0.74 per diluted share for the
comparable period last year. Net sales for the first nine months of 2001 were
$103.7 million, up modestly from sales of $103.3 million for the comparable
period last year. The increase in net sales was primarily due to an increase in
sales of The First Years brand products, partly offset by declines in the sale
of licensed products over the corresponding nine-month period of 2000.

Cost of products sold for the first nine months of 2001 was $66.2 million, a
decrease of $0.5 million, as compared to $66.7 million for the comparable period
last year. This decrease is due principally to product mix and planned product
cost savings. As a percentage of sales, cost of products sold for the first nine
months of 2001 decreased from 65% to 64% from the comparable period of 2000.










                                     Page 9



<PAGE>


                              THE FIRST YEARS INC.


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Con't)

Selling, general, and administrative expenses for the first nine months of 2001
were $28.0 million, an increase of $2.9 million or 12%, as compared to $25.1
million for the comparable period of 2000. The increase is due primarily to an
increased payroll and payroll-related costs and also higher selling and product
development costs associated with increased product development efforts. As a
percentage of net sales, selling, general, and administrative expenses for the
first nine months of 2001 increased to 27% from 24% in the comparable period of
2000.

In accordance with generally accepted accounting principles, the Company
provides for income taxes on an interim basis using its anticipated effective
income tax rate.

C. Financial Condition

With respect to the Condensed Consolidated Balance Sheets, consolidated assets
at September 30, 2001 were $74.7 million, an increase of $3.0 million over
assets as of December 31, 2000. The increase was primarily attributable to
increases in net receivables, cash and prepaid expenses, partially offset by
inventory decreases. The increase in net receivables of $4.1 million is due to
higher sales volume in the third quarter of 2001 compared with the final quarter
of 2000. Inventories decreased by $3.7 million during the first nine months of
2001 due to normal inventory cycle fluctuations. Cash increased by $1.7 million
to $22.9 million at September 30, 2001 primarily due to a decrease in
inventories and profitable operations, which was partially offset by an increase
in accounts receivable. Consolidated liabilities of $13.3 million at September
30, 2001 were $2.3 million lower than liabilities at December 31, 2000, due
principally to payments made during the first nine months of 2001 associated
with selling expense accruals and other accounts payable items.

Net working capital, defined as current assets less current liabilities,
increased in the first nine months of 2001 to $51.3 million at September 30,
2001. This $4.9 million increase from the $46.4 million in net working capital
at December 31, 2000 was primarily due to profitable operations.









                                     Page 10


<PAGE>
                              THE FIRST YEARS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Con't)

An unsecured bank line of credit of $10.0 million is subject to annual renewal.
Amounts outstanding under this line are payable upon demand by the bank. During
the first nine months of 2001 and 2000, the Company incurred no borrowings under
the line and had no balances outstanding as of September 30, 2001 and 2000,
respectively. The Company did not incur any other short-term borrowings during
the first nine months of 2001 and 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 2001, the Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities". This statement establishes accounting and reporting
standards for derivative instruments. Specifically, it requires that an entity
recognize all derivatives as either assets or liabilities on the balance sheet
at fair value. The accounting for changes in the fair value of a derivative
(that is, unrealized gains or losses) will be recorded as a component of an
entity's net income or other comprehensive income, depending upon designation
(as defined in the statement). The adoption of SFAS No. 133 was not material to
the Company's consolidated financial statements.

During 2000, the Emerging Issues Task Force (EITF) issued EITF No. 00-10,
"Accounting for Shipping and Handling Fees and Costs". EIFT No. 00-10 addresses
the statements of earnings classification of shipping and handling costs billed
to customers and was effective for the fourth quarter of 2000. The adoption of
EITF No. 00-10 resulted in a reclassification of $1,814,140 and $5,738,294 of
shipping and handling costs for the three and nine-month periods ended September
30, 2000, respectively from selling, general and administrative expenses to cost
of products sold to conform with the current year presentation.

In May of 2000 the EITF reached consensus on Issue No. 00-14, "Accounting for
Certain Sales Incentives." The consensus in EITF No. 00-14 addresses the
recognition, measurement and income statement classification for various types
of sales incentives, including discounts, consumer coupons, rebates and free
products. The consensus requires, amongst other things, certain refunds or
rebates of the selling price of a product be classified as a reduction of
revenue, versus a selling, general and administrative expense.



                                     Page 11


<PAGE>

                              THE FIRST YEARS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Con't)

In April of 2001 the EITF reached consensus on Issue 00-25, "Vendor Income
Statement Characterization of Consideration from a Vendor to a Retailer." The
consensus in EITF No. 00-25 addresses the income statement classification of
"slotting fees", cooperative advertising arrangements and "buydowns". The
consensus requires these customer promotional payments to be classified as a
reduction of revenue, versus a selling, general and administrative expense.

The Company is required to adopt the consensus in both EITF Issue No. 00-14 and
00-25 no later than the first quarter of fiscal year 2002. The implementation of
these Issues will result in a reduction to net sales and a corresponding
reduction to selling, general, and administrative expenses in the consolidated
statement of income. However, the implementation of these Issues will not affect
net income.

In July 2001, the Financial Accounting Standards Board issued Statement No. 141
(SFAS No. 141), "Business Combinations", which eliminated the pooling method of
accounting effective June 30, 2001, and Statement No. 142 (SFAS No. 142),
"Goodwill and Other Intangible Assets." SFAS 142 includes requirements to test
goodwill and indefinite lived intangible assets for impairment rather than
amortize them. SFAS No. 142 will be adopted in fiscal 2002. The Company does not
expect the adoption of these standards to have a material effect on its
consolidated financial statements.


PART I, ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     At September 30, 2001, the Company held foreign currency forward contracts
     with a bank whereby the Company is committed to deliver foreign currency at
     predetermined rates. The contracts expire within one year. The Company's
     future commitment under these contracts totaled approximately $1,034,902
     and the fair market value of the contracts approximated their predetermined
     rates included therein.

     Also see the Company's disclosure regarding Market Risk in Item 7A of its
     Annual Report on Form 10K for the fiscal year ended December 31, 2000, as
     filed with the SEC.



                                     Page 12


<PAGE>

                              THE FIRST YEARS INC.

                           PART II - OTHER INFORMATION


Item 1:  Legal Proceedings

                           Not Applicable

Item 2:  Changes in Securities and Use of Proceeds

                           Not Applicable

Item 3:  Defaults Upon Senior Securities

                           Not Applicable


Item 4: Submission of Matters to a Vote of Security holders.

                           Not Applicable

Item 5: Not Applicable

Item 6: Exhibits and Reports on Form 8-K

     (a) Exhibits - The following exhibits are filed as
                    part of this Report:

            Exhibit                Description

               3(i)     Restated Articles of Organization of the
                        Registrant (filed as Exhibit (3.1) to
                        Amendment No. 1 to the Registrant's Form
                        S-1 Registration Statement filed with the
                        Commission on October 5, 1995 [Reg. No. 33-
                        62673] and incorporated herein by
                        reference).

               3(ii)    By-laws of the Registrant (filed as Exhibit
                        3(ii) to the Registrant's Annual Report on
                        Form 10-K for the fiscal year ended
                        December 31, 1999 [File No. 0-7024] and
                        incorporated herein by reference).


     (b) No reports on Form 8-K have been filed during
            the quarter covered by this report.



                                     Page 13


<PAGE>


                              THE FIRST YEARS INC.

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                  THE FIRST YEARS INC.
                                      Registrant



Date  11/14/01            By: /s/ John R. Beals
     ----------               ----------------------------
                              John R. Beals, Senior Vice
                              President and Treasurer,
                              (Duly Authorized Officer and
                              Principal Financial Officer)














                                     Page 14



<PAGE>


                              THE FIRST YEARS INC.


                                  EXHIBIT INDEX



   EXHIBIT    DESCRIPTION                                          PAGE
   -------    -----------                                          ----

       3(i)   Restated Articles of Organization of the
               Registrant (filed as Exhibit (3.1) to
               Amendment No. 1 to the Registrant's Form S-1
               Registration Statement filed with the
               Commission on October 5, 1995 [Reg. No. 33-
               62673] and incorporated herein by reference).

       3(ii)  By-laws of the Registrant (filed as Exhibit
               3(ii) to the Registrant's Annual Report on
               Form 10-K for the fiscal year ended December
               31, 1999 [File No. 0-7024] and incorporated
               herein by reference).















                                     Page 15