<PAGE>   1
                                    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, 1997
--------------------------------------------------------------------------------


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)


--------------------------------------------------------------------------------
              (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,
1997 was 5,055,216.







<PAGE>   2




                              THE FIRST YEARS INC.



                                      INDEX



PART I - FINANCIAL INFORMATION:

Condensed Consolidated Balance Sheets                    Page  1

Condensed Consolidated Statements of Income                    2

Condensed Consolidated Statements of Cash Flows                3

Notes to Condensed Consolidated Financial Statements           4 - 5

Management's Discussion and Analysis of Financial
  Condition and Results of Operations                          6 - 7

PART II - OTHER INFORMATION

Other information                                              8

SIGNATURES                                                     8

EXHIBIT INDEX                                                  9












<PAGE>   3

                              THE FIRST YEARS INC.
                     Condensed Consolidated Balance Sheets

                                     ASSETS

<TABLE>
<CAPTION>
                                                      September 30,         December 31,
                                                           1997                 1996
                                                      -------------         ------------
                                                       (Unaudited)  
<S>                                                    <C>                  <C>        
CURRENT ASSETS:
 Cash and cash equivalents                             $10,569,485          $ 4,164,587
 Accounts receivable, net                               17,309,912           15,929,465
 Inventories                                            19,790,100           18,588,044
 Prepaid expenses and other assets                         886,938              375,317
 Deferred tax assets                                       946,400              946,400
                                                       -----------          -----------
       Total current assets                             49,502,835           40,003,813
                                                       -----------          -----------

PROPERTY, PLANT, AND EQUIPMENT:
 Land                                                      167,266              167,266
 Building                                                4,018,915            4,016,405
 Machinery and molds                                     7,754,546            7,329,240
 Furniture and equipment                                 3,832,713            3,092,356
                                                       -----------          -----------
       Total                                            15,773,440           14,605,267
 Less accumulated depreciation                           8,577,918            7,559,543
                                                       -----------          -----------
   Property, plant, and equipment-net                    7,195,522            7,045,724
                                                       -----------          -----------
TOTAL ASSETS                                           $56,698,357          $47,049,537
                                                       ===========          ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Current portion of long-term debt                     $         0          $   100,000
 Accounts payable                                        9,651,981            6,969,115
 Accrued royalties                                       1,423,333              848,671
 Accrued payroll expenses                                1,283,271            1,087,302
 Accrued selling expenses                                1,684,940            1,406,009
 Federal and state income taxes payable                          0                    0
                                                       -----------          -----------
       Total current liabilities                        14,043,525           10,411,097
                                                       -----------          -----------


DEFERRED TAX LIABILITY                                     772,000              772,000
                                                       -----------          -----------


STOCKHOLDERS' EQUITY:
 Common stock                                              505,522              494,898
 Paid-In capital                                         6,294,523            5,271,875
 Retained earnings                                      35,082,787           30,099,667
                                                       -----------          -----------
       Total stockholders' equity                       41,882,832           35,866,440
                                                       -----------          -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $56,698,357          $47,049,537
                                                       ===========          ===========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                            Page 1


<PAGE>   4



                              THE FIRST YEARS INC.

                  Condensed Consolidated Statements of Income
                                   (Unaudited)


<TABLE>
<CAPTION>
                                      Three Months Ended               Nine Months Ended
                                         September 30,                    September 30,
                                 ---------------------------      ---------------------------

                                     1997            1996             1997            1996
                                 -----------     -----------      -----------     -----------

<S>                              <C>             <C>              <C>             <C>        
NET SALES                        $27,878,092     $23,273,193      $88,397,388     $69,631,738
                                                                                 
COST OF PRODUCTS SOLD             16,249,011      13,629,185       52,247,703      41,588,698
                                 -----------     -----------      -----------     -----------
                                                                                 
GROSS PROFIT                      11,629,081       9,644,008       36,149,685      28,043,040
                                                                                 
                                                                                 
SELLING, GENERAL, AND                                                            
 ADMINISTRATIVE EXPENSES           8,701,661       7,306,213       26,988,068      21,154,744
                                 -----------     -----------      -----------     -----------
                                                                                 
OPERATING INCOME                   2,927,420       2,337,795        9,161,617       6,888,296
                                                                                 
OTHER INCOME (EXPENSES):                                                         
  Interest expense                      (542)        (49,457)         (26,241)       (346,666)
  Interest income                     67,025           5,125           89,091           8,000
                                 -----------     -----------      -----------     -----------
                                                                                 
                                                                                 
INCOME BEFORE INCOME TAXES         2,993,903       2,293,463        9,224,467       6,549,630
                                                                                 
PROVISION FOR INCOME TAXES         1,190,100         917,400        3,744,600       2,619,900
                                 -----------     -----------      -----------     -----------
                                                                                 
NET INCOME                       $ 1,803,803     $ 1,376,063      $ 5,479,867     $ 3,929,730
                                 ===========     ===========      ===========     ===========
                                                                                 
EARNINGS PER SHARE               $      0.34     $      0.27      $      1.05     $      0.81
                                 ===========     ===========      ===========     ===========
                                                                                 
AVERAGE NUMBER OF SHARES                                                         
  OUTSTANDING                      5,257,229       5,150,751        5,203,529       4,862,132
                                 ===========     ===========      ===========     ===========
                                                                                 
                                                                                 
CASH DIVIDENDS PAID PER SHARE    $     0.00      $      0.00      $     0.10      $     0.10
                                 ===========     ===========      ===========     ===========
</TABLE>






     See accompanying notes to condensed consolidated financial statements.

                                Page 2
<PAGE>   5



                              THE FIRST YEARS INC.

            Condensed Consolidated Statements of Cash Flows for the
                  Nine Months Ended September 30, 1997 and 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      1997             1996
                                                  -----------      -----------
<S>                                               <C>              <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                       $ 5,479,867      $ 3,929,730
 Adjustments to reconcile net income to net
  cash provided by (used for) operations:
    Depreciation                                    1,143,226          918,186
    Provision for doubtful accounts                   245,359           95,595
    Gain on disposal of equipment                           0           22,881
Increase (decrease) arising from working
    capital items:
    Accounts receivable                            (1,625,806)      (1,756,368)
    Inventories                                    (1,202,056)      (1,397,316)
    Prepaid expenses and other assets                (511,621)         523,293
    Accounts payable                                2,682,866         (783,257)
    Accrued royalties                                 574,662          260,366
    Accrued payroll expenses                          195,969          296,402    
    Accrued selling expenses                          278,931          342,278
    Federal and state income taxes - net                    0           41,300
                                                  -----------      -----------

     Net cash provided by
       operating activities                         7,261,397        2,493,090
                                                  -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Expenditures for property, plant,
      and equipment                                (1,293,024)      (1,655,302)
                                                  -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash Dividend                                     (496,747)        (453,557)
   Common stock issued under stock
     option plans                                     633,272          130,178
   Tax benefit of stock option compensation           400,000                0
   Net proceeds from public offering                       --        5,121,750
   Repayment of short term borrowings                      --       (4,900,000)
   Repayment of industrial revenue bonds             (100,000)        (100,001)
                                                  -----------      -----------

     Net cash provided by (used for)
       financing activities                           436,525         (201,630)
                                                  -----------      -----------

INCREASE IN CASH AND CASH EQUIVALENTS               6,404,898          636,158

CASH AND CASH EQUIVALENTS, BEGINNING
  OF PERIOD                                         4,164,587          552,568
                                                  -----------      -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD          $10,569,485      $ 1,188,726
                                                  ===========      ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:

      Cash paid for:
         Interest                                 $    26,241      $   346,666
                                                  ===========      ===========

         Income taxes                             $ 3,738,100      $ 2,196,300
                                                  ===========      ===========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                                     Page 3


<PAGE>   6

                              THE FIRST YEARS INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Amounts in the accompanying balance sheet as of December 31, 1996 are
     condensed from the Company's audited balance sheet as of that date. All
     other condensed consolidated financial statements are unaudited but, in the
     opinion of the Company, contain all normal and recurring adjustments
     necessary to present fairly the financial position as of September 30,
     1997, and the results of operations and cash flows for the periods ended
     September 30, 1997 and 1996.


2.   The Company has 15,000,000 authorized shares of $.10 par value common stock
     with 5,055,216 and 4,948,980 shares issued and outstanding as of September
     30, 1997 and December 31, 1996, respectively.

     On May 8, 1997 the Board of Directors authorized a $0.10 per share annual
     cash dividend which was paid on June 2, 1997 to holders of record at the
     close of business on May 21, 1997.


3.   Earnings per share of common stock are computed on the basis of the average
     number of shares and common share equivalents outstanding during each
     quarter. Fully diluted and primary earnings per share were the same for the
     nine months ended September 30, 1997 and 1996.

     In February 1997 the Financial Accounting Standards Board issued SFAS No.
     128, "Earnings per Share" which will become effective for the Company
     effective December 15, 1997. SFAS No. 128 replaces the presentation of
     primary earnings per share with a basic earnings per share (which excludes
     dilution) and a diluted earnings per share. Had the Company used SFAS No.
     128, the Company's basic and diluted earnings per share would have been
     $1.10 and $1.05, respectively for the nine months ended September 30, 1997
     and $0.84 and $0.81, respectively for the nine months ended September 30,
     1996.

4.   The results of operations for the nine month period ended September 30,
     1997 and 1996 are not necessarily indicative of the results to be expected
     for the full year.

5.   During 1997, the Company borrowed various amounts up to $2,500,000 under an
     unsecured line of credit totaling $10,000,000 available from a bank. As of
     September 30, 1997 there was no balance outstanding. During 1996, the
     Company borrowed various amounts up to $9,900,000 of which $1,300,000
     remained outstanding as of September 30, 1996 at a weighted average
     interest rate of 7.38%. No other short-term borrowings were incurred by the
     Company during the first nine months of 1997 or 1996.


                                     Page 4

<PAGE>   7

                              THE FIRST YEARS INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Con't)


6.   In June 1997 the Financial Accounting Standards Board issued SFAS No. 130,
     "Reporting Comprehensive Income" which will become effective for the
     Company effective December 15, 1997. SFAS No. 130 establishes standards for
     reporting and display of comprehensive income and its components (revenues,
     expenses, gains, and losses) in a full set of general purpose financial
     statements. SFAS No. 130 requires that all items that are required to be
     recognized under accounting standards as components of comprehensive income
     be reported in a financial statement that is displayed with the same
     prominence as other financial statements. SFAS No. 130 requires that a
     Company (a) classify items of other comprehensive income by their nature in
     a financial statement and (b) display the accumulated balance of other
     comprehensive income separately from retained earnings and additional
     paid-in-capital in the equity section of the balance sheet.
     Reclassification of financial statements for earlier periods provided for
     comparative purposes is required. The Company has not determined the
     effects, if any, that SFAS No. 130 will have on its financial statements.


     In June 1997 the Financial Accounting Standards Board issued SFAS No. 131,
     "Disclosures about Segments of an Enterprise and Related Information" which
     will become effective for the Company effective December 15, 1997. SFAS No.
     131 establishes standards for the way that public companies report selected
     information about operating segments in annual financial statements and
     requires that those companies report selected information about segments in
     interim financial reports issued to shareholders. It also establishes
     standards for related disclosure about products and services, geographic
     areas, and major customers. SFAS No. 131, which supersedes SFAS No. 14,
     "Financial Reporting Segments of a Business Enterprise" but retains the
     requirement to report information about major customers, requires that a
     public company report financial and descriptive information about its
     reportable operating segments. The Company has not determined the effects,
     if any, that SFAS No. 131 will have on its financial statements.






                                     Page 5
<PAGE>   8


                              THE FIRST YEARS INC.

   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations



Statements in this 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. The actual results may differ from those projected in the
forward-looking statements due to risks and uncertainties that exist in the
Company's operations and business environment in the development and
introduction of new products, described more fully in the Company's Annual
Report on From 10-K for the year ended December 31, 1996, and the Exhibit 99 of
this Form 10-Q for the quarter ended September 30, 1997, filed with the
Securities and Exchange Commission.


Net sales for the first nine months of 1997 were $88.4 million, an increase of
$18.8 million or 26.9%, as compared to $69.6 million for the comparable period
last year. The increase was due to new product introductions, including the
Sesame Street brand licensed from the Children's Television Workshop, and
expanded retail distribution in domestic and foreign markets.


Cost of products sold for the first nine months of 1997 was $52.2 million, an
increase of $10.6 million or 25.6%, as compared to $41.6 million for the
comparable period last year. As a percentage of sales, cost of products sold in
the first nine months of 1997 decreased to 59.1% from 59.7% in the comparable
period of 1996. The decrease was primarily due to reduced cost of products
resulting from manufacturing efficiencies and increased sales of higher margin
products.


Selling, general, and administrative expenses for the first nine months of 1997
were $27.0 million, an increase of $5.8 million or 27.6%, as compared to $21.2
million of such expenses for the first nine months of 1996. The increase
resulted primarily from costs related to increased sales volume; payroll and
payroll related costs, and integrated marketing communication program expenses.
As a percentage of net sales, selling, general, and administrative expenses for
the first nine months of 1997 and 1996 remained consistent at 30.5% and 30.4%,
respectively.


Income tax expense as a percentage of pretax income was 41% and 40% for the
first nine months of 1997 and 1996, respectively.


Net working capital increased by $5.9 million in the first nine months primarily
due to profitable operations. Accounts receivable increased by $1.4 million
primarily as a result of increased sales and inventories increased by $1.2
million to meet continued demand for the Company's products. Cash increased by
$6.4 million primarily resulting from funds generated from operations.

                                     Page 6

<PAGE>   9


                              THE FIRST YEARS INC.

         Management's Discussion and Analysis of Financial Condition and

                          Results of Operations (Con't)



The Company reviewed its needs with regard to open lines of credit during the
three months ended September 30, 1997. After this review, the Company continued
with an unsecured bank line of credit aggregating $10.0 million which is 
subject to annual renewal. Amounts outstanding under the line is payable upon 
demand by the bank. During the first nine months of 1997, the Company borrowed 
various amounts up to $2.5 million of which no amount remained outstanding as 
of September 30, 1997. During the first nine months of 1996, the Company        
borrowed various amounts up to $9.9 million of which $1.3 million remained
outstanding as of September 30, 1996. The Company did not incur any other
short-term borrowings during the first nine months of 1997 and 1996.

Recent Accounting Pronouncements

In June 1997 the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" which will become effective for the Company
effective December 15, 1997. SFAS No. 130 establishes standards for reporting
and display of comprehensive income and its components (revenues, expenses,
gains, and losses) in a full set of general purpose financial statements. SFAS
No. 130 requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. SFAS No. 130 requires that a Company (a) classify items of
other comprehensive income by their nature in a financial statement and (b)
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in-capital in the equity section of the
balance sheet. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. The Company has not determined
the effects, if any, that SFAS No. 130 will have on its financial statements.

In June 1997 the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information" which will
become effective for the Company effective December 15, 1997. SFAS No. 131
establishes standards for the way that public companies report selected
information about operating segments in annual financial statements and requires
that those companies report selected information about segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosure about products and services, geographic areas, and major
customers. SFAS No. 131, which supersedes SFAS No. 14, "Financial Reporting
Segments of a Business Enterprise", but retains the requirement to report
information about major customers, requires that a public company report
financial and descriptive information about its reportable operating segments.
The Company has not determined the effects, if any, that SFAS No. 131 will have
on its financial statements.


                                     Page 7
<PAGE>   10




                              THE FIRST YEARS INC.

                           PART II - OTHER INFORMATION


Items 1 through 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
         -------        -----------


            11        Statement re Computation of Per Share Earnings

            27        Financial Data Schedule

            99        Important Factors Regarding Forward-Looking Statements

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




                                   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    11/14/97                    /s/ John R. Beals    
    ------------------              -----------------------------
                                    John R. Beals, Vice President
                                    and Assistant Treasurer,
                                    Duly Authorized Officer and
                                    Principal Financial Officer






                                     Page 8
<PAGE>   11



                              THE FIRST YEARS INC.


                                  EXHIBIT INDEX



   Exhibit   Description                                              Page
   -------   -----------                                              ----
                                                                    
     11      Statement re Computation of                            
              Per Share Earnings                                       10
                                                                    
                                                                    
     27      Financial Data Schedule                                   11
                                                                    
                                                                    
     99      Important Factors Regarding                            
              Forward-Looking Statements                               12 - 13




























                                     Page 9