<PAGE>
 
                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                        
                                   FORM 10-Q
                                        

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended   September 5, 1997
                               ---------------------

                                       OR

[X]  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: 1-11841

                               PINKERTON'S, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                   <C>
           Delaware                              13-5318100
(State or other jurisdiction of       (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

       15910 Ventura Boulevard, Suite 900, Encino, California 91436-2810
            (Address of principal executive offices)     (Zip Code)


       Registrant's telephone number, including area code: (818) 380-8800


                                 Not Applicable
  (Former name, former address, and formal 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 the Registrant's Common Stock, par value $.001 per
share, outstanding on October 3, 1997 was 12,573,396.
<PAGE>
 
                       PINKERTON'S, INC. AND SUBSIDIARIES
                                        
                                   FORM 10-Q
                                     INDEX

<TABLE>
<CAPTION>
 
 
PART I. FINANCIAL INFORMATION                                  PAGE NO.
                                                               --------
<S>                                                            <C>
 
Item 1. Financial Statements (Unaudited)
 
 Consolidated Balance Sheets-
   September 5, 1997 and December 27, 1996..................         3
 
 Consolidated Statements of Earnings-
   For the Quarters and Nine Periods Ended September 5,
    1997 and September 6, 1996..............................         4
 
 Consolidated Statements of Cash Flows-
   For the Nine Periods Ended September 5, 1997 and            
   September 6, 1996........................................         5

 Notes to Consolidated Financial Statements.................       6-7
 
Item 2. Management's Discussion and Analysis of 
        Financial Condition and Results of Operations.......      8-10
 
PART II. OTHER INFORMATION
 
Item 6.  Exhibits and Reports on Form 8-K...................        10
 
Signatures..................................................        11
 
</TABLE>

                                       2
<PAGE>
 
                         PART I.  FINANCIAL INFORMATION
                                        
ITEM 1.  FINANCIAL STATEMENTS

                       PINKERTON'S, INC. AND SUBSIDIARIES
                                        
                          CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                              SEPTEMBER 5,
                                                                                  1997                DECEMBER 27,
                                ASSETS                                         (Unaudited)                1996
                                                                          ---------------------   ---------------------
 
<S>                                                                       <C>                     <C>
Current assets:
 Cash and cash equivalents                                                            $  7,969                $ 33,761
 Investment in marketable securities                                                     8,000                   8,460
 Accounts receivable (includes unbilled amounts of
   $35,341 in 1997 and $30,196 in 1996)                                                151,158                 137,055
   Less allowance for doubtful receivables                                               2,889                   2,572
                                                                                      --------                --------
                                                                                       148,269                 134,483
                                                                                      --------                --------
 
 Inventory                                                                               3,080                   3,799
 Prepaid expenses and taxes                                                              7,395                  11,566
 Deferred income taxes                                                                   7,452                   7,121
                                                                                      --------                --------
       Total current assets                                                            182,165                 199,190
                                                                                      --------                --------
 
Equipment and leasehold improvements, net of
 accumulated depreciation and amortization of
 $31,001 in 1997 and $26,818 in 1996                                                    15,080                  14,977
 
Other assets:
 Intangible assets, net                                                                 70,720                  57,311
 Deferred income taxes                                                                  24,541                  23,467
 Other                                                                                  24,114                  20,336
                                                                                      --------                --------
                                                                                       119,375                 101,114
                                                                                      --------                --------
                                                                                      $316,620                $315,281
                                                                                      ========                ========
                     LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
 Accounts payable                                                                     $ 11,006                $  9,790
 Accrued liabilities                                                                    81,273                  76,366
 Income taxes payable                                                                    1,594                       -
 Current maturities of long-term debt                                                    8,575                   8,575
                                                                                      --------                --------
       Total current liabilities                                                       102,448                  94,731
                                                                                      --------                --------
 
Accrued retirement benefits and other non-current liabilities                           51,853                  52,856
 
Long-term debt, less current maturities                                                 25,997                  37,313
 
Commitments and contingencies
 
Stockholders' equity:
 Common stock                                                                                8                       8
 Additional paid-in capital                                                             75,216                  74,887
 Other adjustments                                                                      (7,903)                 (5,441)
 Retained earnings                                                                      69,001                  60,927
                                                                                      --------                --------
                                                                                       136,322                 130,381
                                                                                      --------                --------
                                                                                      $316,620                $315,281
                                                                                      ========                ========
See accompanying notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>
 
                       PINKERTON'S, INC. AND SUBSIDIARIES
                                        
                      CONSOLIDATED STATEMENTS OF EARNINGS
                                  (UNAUDITED)

                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                   FOR THE QUARTER ENDED                  FOR THE NINE PERIODS ENDED
                                           ---------------------------------------   ---------------------------------------
                                           SEPTEMBER 5, 1997    SEPTEMBER 6, 1996    SEPTEMBER 5, 1997    SEPTEMBER 6, 1996
                                           ------------------   ------------------   ------------------   ------------------
<S>                                           <C>                  <C>                  <C>                  <C>
Service revenues                                  $233,736             $207,496             $684,993             $608,450
 
Cost of services                                   204,001              179,938              601,525              533,716
                                                  --------             --------             --------             --------
 
Gross profit                                        29,735               27,558               83,468               74,734
 
Operating expenses                                  19,587               19,145               58,437               53,384
Amortization of intangible assets                    2,161                2,102                6,605                6,352
                                                  --------             --------             --------             --------
 
Operating profit                                     7,987                6,311               18,426               14,998
 
Other (income) deductions:
 Interest income                                      (283)                (621)                (976)              (1,696)
 Interest expense                                    1,016                  987                3,288                3,359
 Other                                                   -                    -                    -               (1,962)
                                                  --------             --------             --------             --------
                                                       733                  366                2,312                 (299)
                                                  --------             --------             --------             --------
 
Income before income taxes                           7,254                5,945               16,114               15,297
 
Provision for income taxes                           3,876                2,914                8,040                7,510
                                                  --------             --------             --------             --------
 
Net income                                        $  3,378             $  3,031             $  8,074             $  7,787
                                                  ========             ========             ========             ========
 
Net income per common share                           $.26                 $.24                 $.62                 $.61
                                                  ========             ========             ========             ========
 
Weighted average common shares and
 common share equivalents outstanding               13,204               12,806               13,040               12,753
                                                  ========             ========             ========             ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
 
                       PINKERTON'S, INC. AND SUBSIDIARIES
                                        
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                         FOR THE NINE PERIODS ENDED
                                                                           ------------------------------------------------------
                                                                               SEPTEMBER 5, 1997            SEPTEMBER 6, 1996
                                                                            --------------------------   -------------------------
<S>                                                                                 <C>                          <C>
OPERATING ACTIVITIES:
Net income                                                                              $  8,074                    $  7,787
Adjustments to reconcile net income to net cash
 provided by operating activities:
 Amortization of intangible assets                                                         6,605                       6,352
 Depreciation and other amortization                                                       5,126                       5,170
 Provision for losses on doubtful receivables                                                540                         914
 Deferred income taxes                                                                    (1,405)                     (2,354)
 
Changes in assets, liabilities and stockholders' equity:
 Accounts receivable                                                                     (10,394)                    (13,033)
 Inventory                                                                                 1,250                         377
 Prepaid expenses and taxes                                                                4,461                       5,158
 Other assets                                                                             (4,551)                     (3,151)
 Accounts payable                                                                            338                        (542)
 Accrued and other non-current liabilities                                                (2,222)                      4,871
 Income taxes payable                                                                      1,594                       2,068
 Foreign currency revaluation of net assets                                                 (796)                         38
                                                                                        --------                    --------
 
Net cash provided by operating activities                                                  8,620                      13,655
                                                                                        --------                    --------
 
INVESTING ACTIVITIES:
Purchase of marketable securities                                                        (11,081)                    (19,077)
Sales/redemptions of marketable securities                                                11,541                      18,382
Purchase of equipment and leasehold improvements                                          (3,699)                     (4,688)
Payments for net assets of acquired businesses, net
   of cash acquired                                                                      (21,793)                     (5,125)
                                                                                        --------                    --------
 
Net cash used in investing activities                                                    (25,032)                    (10,508)
                                                                                        --------                    --------
 
FINANCING ACTIVITIES:
Principal repayment of long-term debt                                                     (9,709)                     (8,575)
Exercise of stock options                                                                    329                         223
Redemption of preferred stock                                                                  -                         (15)
                                                                                        --------                    --------
 
Net cash used in financing activities                                                     (9,380)                     (8,367)
                                                                                        --------                    --------
 
Net decrease in cash                                                                     (25,792)                     (5,220)
 
Cash and cash equivalents at beginning of year                                            33,761                      20,215
                                                                                        --------                    --------
 
Cash and cash equivalents at end of period                                              $  7,969                    $ 14,995
                                                                                        ========                    ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
 
                       PINKERTON'S, INC. AND SUBSIDIARIES
                                        
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  PRESENTATION OF FINANCIAL INFORMATION

The consolidated financial statements included herein have been prepared by the
Company and include all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the fiscal
quarters and nine periods ended September 5, 1997 and September 6, 1996. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted, although the Company believes the disclosures in these
consolidated financial statements are adequate to make the information presented
not misleading.

The following material is written with the presumption that the users of the
interim financial statements have read or have access to the Company's Form 10-K
filed with the Securities and Exchange Commission for the fiscal year ended
December 27, 1996 and the Company's 1996 Annual Report to Stockholders.  The
1996 Annual Report contains the latest audited consolidated financial statements
and notes thereto, together with Management's Discussion and Analysis of
Financial Condition and Results of Operations as of December 27, 1996 and for
the year then ended.  The results of operations for the fiscal quarters and nine
periods ended September 5, 1997 and September 6, 1996 are not necessarily
indicative of the results for a full year.

(2)  ACCOUNTING CYCLE

Pinkerton's fiscal year comprises the 52-week (or 53-week) period ending on the
Friday closest to December 31, within the reporting year.  The Company's
quarterly reporting periods generally consist of three four-week periods for the
first, second and third quarters, and four four-week periods for the fourth
quarter.

(3)  OTHER INCOME

During the second quarter of 1996, the Company entered into an agreement with
the previous owner related to the acquisition of Pinkerton's, Inc. by California
Plant Protection, Inc. in 1988.  As a result of this agreement, the Company
received a cash payment of $5.2 million in the second quarter of 1996.  Of this
amount, $3.2 million represents a recovery of income and other taxes paid on
behalf of the previous owner and recorded in the balance sheet; the remaining
amount of $2.0 million was recorded as other income in the second quarter of
1996.

(4)  NEWLY ISSUED ACCOUNTING STANDARDS

The Company will implement the provisions of Financial Accounting Standards
Board No. 128, Earnings Per Share, effective with the Company's fiscal year
ending December 26, 1997.  The Company expects that the implementation of this
new accounting standard will not have a material impact on the reported earnings
per share.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income.  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 is effective for financial statements issued for
periods beginning after December 15, 1997.  The Company has not determined the
impact of SFAS No. 130 on its consolidated financial statements.

                                       6
<PAGE>
 
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information.  SFAS No.
131 establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. SFAS No. 131 is effective for
financial statements issued for periods beginning after December 15, 1997. The
Company has not determined the impact of SFAS No. 131 on its consolidated
financial statements.

(5)    STOCK SPLIT

On August 27, 1997, a three-for-two stock split in the form of a 50 percent
stock dividend was distributed.  All per share amounts in the Company's
consolidated financial statements herein have been adjusted accordingly.

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE QUARTERS AND NINE PERIODS ENDED SEPTEMBER 5, 1997 AND
SEPTEMBER 6, 1996.

Pinkerton's fiscal year comprises the 52-week (or 53-week) period ending on the
Friday closest to December 31, within the reporting year.  The Company's
quarterly reporting periods consist of three four-week periods for the first,
second and third quarters, and four four-week periods for the fourth quarter.

RESULTS OF OPERATIONS

Service Revenues -

The Company's service revenues increased by $26.2 million, or 12.6%, from $207.5
million in the third quarter of 1996 to $233.7 million in the third quarter of
1997.  For the nine periods ended September 5, 1997 and September 6, 1996,
service revenues increased by $76.6 million, or 12.6%, from $608.4 million in
1996 to $685.0 million in 1997.

Domestic Service Revenues -

The Company's domestic service revenues increased by $17.3 million, or 10.0%,
from $172.2 million in the third quarter of 1996 to $189.5 million in the third
quarter of 1997.  For the nine periods ended September 5, 1997 and September 6,
1996, domestic service revenues increased by $42.9 million, or 8.4%, from $509.2
million in 1996 to $552.1 million in 1997.  The increase in the third quarter
reflects the revenues of acquired systems integration businesses of $3.7 million
and service revenue increases of $13.6 million.  The increase in the nine
periods reflects the revenues of acquired systems integration businesses of
$12.7 million and service revenue increases of $30.2 million.

International Service Revenues -

Service revenues of the Company's international operations increased by $8.9
million, or 25.2%, from $35.3 million in the third quarter of 1996 to $44.2
million in the third quarter of 1997.  For the nine periods ended September 5,
1997 and September 6, 1996, service revenues of the Company's international
operations increased by $33.7 million, or 34.0%, from $99.2 million in 1996 to
$132.9 million in 1997.  The increase in the third quarter reflects the revenues
of acquired businesses of $6.8 million and $2.1 million of net additional
business.  The increase for the nine periods reflects the revenues of acquired
businesses of $22.6 million, $11.0 million of net additional business and
foreign currency exchange increases of $0.1 million.

Cost of Services and Gross Profit -

The Company's cost of services increased by $24.1 million, or 13.4%, from $179.9
million in the third quarter of 1996 to $204.0 million in the third quarter of
1997.  Cost of services in the first nine periods of 1996 increased by $67.8
million, or 12.7%, from $533.7 million in 1996 to $601.5 million in 1997.  The
increase in cost of services for the third quarter reflects payroll and related
expenses accompanying the acquired businesses and increased service revenues
discussed above, increased insurance costs, as well as increased costs in the
Company's international and systems integration businesses.  Increased costs in
the Company's systems integration businesses occurred primarily as a result of
the ongoing consolidation of the Company's acquired system integration
businesses into a national organization pursuant to the Company's strategic
plan.  Increased costs also were incurred as a result of the Company's
realignment of certain international operations.

Gross profit as a percentage of service revenues decreased from 13.3% in the
third quarter of 1996 to 12.7% in the third quarter of 1997.  For the nine
periods ended September 5, 1997 and September 6, 1996, the gross profit
percentage decreased from 12.3% in 1996 to 12.2% in 1997.  The decrease occurred
as a result of lower gross margins in the Company's system integration

                                       8
<PAGE>
 
operations and international operations occurring primarily as a result of the
increased costs discussed above, partially offset by a billing adjustment with a
major customer.

Operating Expenses -

Operating expenses increased by $0.5 million, or 2.6%, from $19.1 million in the
third quarter of 1996 to $19.6 million in the third quarter of 1997.  For the
nine periods ended September 5, 1997 and September 6, 1996, operating expenses
increased by $5.0 million, or 9.4%, from $53.4 million in 1996 to $58.4 million
in 1997. As a percentage of service revenues, operating expenses were 8.4% and
8.5% respectively, for the quarter and nine periods ended September 5, 1997, and
9.2% and 8.8%, respectively, for the comparable 1996 periods. Operating expenses
also reflect costs incurred to realign certain international operations.

Amortization -

Amortization of intangible assets increased by $0.1 million from $2.1 million in
the third quarter of 1996 to $2.2 million in the third quarter of 1997.  For the
nine periods ended September 5, 1997 and September 6, 1996, amortization
increased $0.2 million, from $6.4 million in 1996 to $6.6 million in 1997.
These increases reflect additional amortization of intangible assets arising
from 1996 and 1997 acquisitions.

Operating Profit -

Operating profit was $8.0 million, or 3.4% of service revenues, for the third
quarter of 1997 as compared to $6.3 million, or 3.1% of service revenues, for
the same period last year.  For the nine periods ended September 5, 1997,
operating profit was $18.4 million, or 2.7%, of service revenues, as compared to
$15.0 million, or 2.5% of service revenues, in the corresponding 1996 period.
Operating profit increased as a percentage of revenues primarily due to a
decrease in operating expenses as a percentage of revenues.

Other Income -

During the second quarter of 1996, the Company entered into an agreement with
the previous owner related to the acquisition of Pinkerton's, Inc. by California
Plant Protection, Inc. in 1988.  As a result of this agreement, the Company
received a cash payment of $5.2 million in the second quarter of 1996.  Of this
amount, $3.2 million represents a recovery of income and other taxes paid on
behalf of the previous owner and recorded in the balance sheet; the remaining
amount of $2.0 million was recorded as other income in the second quarter of
1996.

Income Taxes -

The effective tax rate for the third quarter of 1997 was 53.4% as compared to
49.0% in 1996.  The effective tax rate for the nine periods ended September 5,
1997 was 49.9% as compared to 49.1% in 1996.  The higher tax rates in 1997 are
primarily attributable to realignment costs and losses in certain international
operations for which there are no corresponding tax benefits, partially offset
by the recognition of job-related tax credits that are newly available to the
Company in 1997.

FINANCIAL CONDITION

CAPITAL RESOURCES AND LIQUIDITY

At September 5, 1997, the Company had $8.0 million in cash, a decrease of $25.8
million from December 27, 1996; and $8.0 million in marketable securities, a
$0.5 million decrease from December 27, 1996.  Net cash provided by operating
activities of $8.6 million was reduced by $25.0 million of net cash payments
relating to investing activities and $9.4 million of net cash payments relating
to financing activities.  The Company's principal investing activities during
the

                                       9
<PAGE>
 
first nine periods of 1997 were acquisitions ($21.8 million), purchases of
computer and other equipment ($3.7 million) and net redemptions of marketable
securities ($0.5 million).  The Company's principal financing activities during
the first nine periods of 1997 were payment of an annual principal installment
of $8.6 million reducing the Company's long-term debt, $1.1 million of payments
on the revolving line of credit and $0.3 million of cash receipts related to the
exercise of stock options.

The Company has an acquisitions program intended to implement its strategy to
become a world-class, global security solutions provider.  The Company also has
an ongoing program to replace capital equipment and upgrade systems as required.
These activities will continue for the foreseeable future.

Pinkerton's cash needs during the first six months of each year are greater
because of higher payroll taxes.  In addition, the Company is required to make
annual principal payments of approximately $8.6 million (in the month of June)
through the year 2000 in repayment of its Senior Notes.  The principal and
interest payments due in June 1997 occurred in the Company's third fiscal
quarter.  A semi-annual interest payment of approximately $1.3 million related
to the long-term debt is due in December 1997.

The Company has an unsecured revolving credit facility with a group of banks.
On June 27, 1997, the facility was amended to increase the available borrowings
from up to $70.0 million to up to $100.0 million, of which $50.0 million may be
letters of credit.  No cash borrowings have been made during the first nine
periods of 1997.  At September 5, 1997 there were DM 16.0 million ($8.9 million)
of cash borrowings outstanding under the revolving line of credit and $34.5
million in letters of credit had been issued by the Company to secure
obligations under the Company's self-insurance programs.

The Company believes existing liquid resources, cash generated from operations
and funds available under the revolving credit facility are sufficient for
regular operating and capital requirements during the next 12 months.  The
Company also has access to capital markets, if necessary, to raise funds for
acquisitions and other investments for business growth.

                          PART II.  OTHER INFORMATION
                                        
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

 (a)    Exhibits

      10.1  Second Amendment to Revolving Credit Agreement dated as of June 27,
            1997
      11.   Computation of Earnings Per Share (Unaudited)
      27.   Financial Data Schedule

 (b)  Reports on Form 8-K
      None.

                                       10
<PAGE>
 
                                   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.

                                       PINKERTON'S, INC.
 
Date: October 16, 1997                 BY: /s/ JAMES P. McCLOSKEY
                                          ----------------------------------
                                               James P. McCloskey
                                       ITS:    Executive Vice President and
                                               Chief Financial Officer
                                               (Principal Financial Officer)
 

Date: October 16, 1997                 BY: /s/ STEVEN A. LINDSEY
                                          ----------------------------------
                                               Steven A. Lindsey
                                       ITS:    Vice President and Controller
                                               (Principal Accounting Officer)

                                       11