<PAGE>   1
                       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                    June 30, 1997
                               -------------------------------------------------

                                       OR

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

For the transition period from ___________________ to ____________________


                        Commission file number 333-14569


                     EVENFLO & SPALDING HOLDINGS CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

            DELAWARE                                     59-2439656
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


601 South Harbour Island Boulevard, Suite 200, Tampa, Florida       33602-3141
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                            (Zip Code)

Registrant's Telephone Number, Including Area Code:       (813) 204-5200
                                                   -----------------------------


--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check X 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 outstanding of the registrant's Common stock, par value
$.01 per share, at August 1, 1997, was 94,280,078 shares.


                                       1
<PAGE>   2
EVENFLO & SPALDING HOLDINGS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(DOLLAR AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                      Three months ended
                                                                            June 30,
                                                                    ----------------------

                                                                       1997         1996
                                                                       ----         ----
<S>                                                                 <C>            <C>    
NET SALES                                                           $ 251,411      198,678

     Cost of sales                                                    170,131      125,297
                                                                    ---------      -------

GROSS PROFIT                                                           81,280       73,381

     Selling, general and administrative expenses                      65,020       40,170
     Royalty income, net                                               (3,742)      (3,824)
     1994 Management Stock Ownership Plan expense                           0        1,230
                                                                    ---------      -------

INCOME FROM OPERATIONS                                                 20,002       35,805

     Interest expense, net                                             19,286        8,585
     Currency loss, net                                                   150          540
                                                                    ---------      -------


EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST                        566       26,680

     Income taxes                                                      10,083       12,315
                                                                    ---------      -------

EARNINGS (LOSS) BEFORE MINORITY INTEREST                               (9,517)      14,365

     Minority interest in net earnings of consolidated subsidiary           0          640
                                                                    ---------      -------

NET EARNINGS (LOSS)                                                 $  (9,517)      13,725
                                                                    =========      =======
</TABLE>




See Unaudited Notes to Condensed Consolidated Financial Statements




                                        2
<PAGE>   3
EVENFLO & SPALDING HOLDINGS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS (LOSS)
FOR THE NINE MONTHS ENDED JUNE 30, 1997 AND 1996
(DOLLAR AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                  Nine months ended
                                                                       June 30,
                                                                ---------------------

                                                                   1997        1996
                                                                   ----        ----
<S>                                                             <C>           <C>    
NET SALES                                                       $ 582,476     490,053

     Cost of sales                                                393,190     315,728
                                                                ---------     -------

GROSS PROFIT                                                      189,286     174,325

     Selling, general and administrative expenses                 173,381     138,179
     Royalty income, net                                           (9,514)     (9,592)
     1994 Management Stock Ownership Plan expense                       0       3,690
                                                                ---------     -------

INCOME FROM OPERATIONS                                             25,419      42,048

     Interest expense, net                                         53,112      27,217
     Currency loss, net                                               371         975
                                                                ---------     -------


EARNINGS (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST         (28,064)     13,856

     Income taxes (benefit)                                        (4,232)      6,928
                                                                ---------     -------

EARNINGS (LOSS) BEFORE MINORITY INTEREST                          (23,832)      6,928

     Minority interest in net loss of consolidated subsidiary           0         320
                                                                ---------     -------

NET EARNINGS (LOSS)                                             $ (23,832)      6,608
                                                                =========     =======
</TABLE>




See Unaudited Notes to Condensed Consolidated Financial Statements




                                       3
<PAGE>   4
EVENFLO & SPALDING HOLDINGS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND SEPTEMBER 30, 1996
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                    JUNE 30,  September 30,
ASSETS                                                                1997        1996
------                                                                ----        ----
<S>                                                                <C>          <C>
CURRENT ASSETS
Cash                                                               $  18,412      75,298
Receivables, less allowance of $4,028 and $4,373                     247,099     192,999
Inventories                                                          155,275     109,171
Deferred income taxes                                                 15,630      11,952
Other                                                                  5,699       4,704
                                                                   ---------    --------
              TOTAL CURRENT ASSETS                                   442,115     394,124
Property, plant and equipment, net                                   101,613      78,334
Intangible assets, net                                               153,313     131,708
Deferred income taxes on acquired non-U.S. trademarks                 46,497      49,432
Deferred financing costs                                              30,753      34,231
Other                                                                  4,590       2,077
                                                                   ---------    --------
         TOTAL ASSETS                                              $ 778,881     689,906
                                                                   =========    ========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Non-U.S. bank loans                                                $  14,157      13,028
Accounts payable                                                     154,772     141,708
Accrued expenses                                                      74,289      69,131
Income taxes                                                             469         706
                                                                   ---------    --------
         TOTAL CURRENT LIABILITIES                                   243,687     224,573
Long-term debt                                                       714,500     625,800
Deferred income taxes                                                 14,784      16,339
Pension                                                               11,346      11,753
Post-retirement benefits                                               8,750       8,750
Other                                                                  1,960       2,142
                                                                   ---------    --------
         TOTAL LIABILITIES                                           995,027     889,357
PREFERRED STOCK - AT LIQUIDATION VALUE                                     0     150,000
SHAREHOLDERS' EQUITY (DEFICIENCY)
Common stock, $.01 par value, 100,000,000 shares authorized and
     84,480,078 and 50,000,000 outstanding                               845         500
Paid-in capital                                                      395,181     223,125
Retained earnings (deficit)                                         (607,038)   (568,749)
Currency translation adjustment                                       (5,134)     (4,327)
                                                                   ---------    --------
         TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)                    (216,146)   (349,451)
                                                                   ---------    --------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)   $ 778,881     689,906
                                                                   =========    ========
</TABLE>




See Unaudited Notes to Condensed Consolidated Financial Statements




                                       4
<PAGE>   5
EVENFLO & SPALDING HOLDINGS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1997 AND 1996
(DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      Nine months ended
                                                                           June 30,
                                                                   --------------------
INCREASE (DECREASE) IN CASH                                           1997        1996
---------------------------                                           ----        ----
<S>                                                                <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss)                                                $ (23,832)     6,608
Adjustments to reconcile net earnings to net cash provided
  by operating activities:
     Depreciation                                                     12,976      9,446
     Intangibles amortization                                          3,537      4,837
     Deferred income taxes                                            (2,297)     1,421
     Deferred financing costs                                          3,478      1,700
     Pension                                                            (407)      (506)
     Post retirement benefits                                              0        144
     1994 Management Stock Ownership Plan Expense                          0      3,690
     Minority interest in consolidated subsidiary                          0        320
                                                                   ---------    -------
         Subtotal                                                     (6,545)    27,660
     Receivables                                                     (29,439)   (31,693)
     Inventories                                                     (25,629)   (15,026)
     Current liabilities, excluding bank loans                         1,712     11,813
     Other                                                            (1,622)    (6,493)
                                                                   ---------    -------
              NET CASH USED IN OPERATING ACTIVITIES                  (61,523)   (13,739)

CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                            (21,033)    (7,073)
     Payment to purchase net assets of Gerry                         (72,102)         0
                                                                   ---------    -------
              NET CASH USED IN INVESTING ACTIVITIES                  (93,135)    (7,073)
                                                                   ---------    -------
              NET CASH USED BEFORE FINANCING ACTIVITIES             (154,658)   (20,812)

CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayment) under new credit agreements                88,700          0
Net borrowings (repayment) under prior credit agreements                   0     16,750
Net borrowings of other indebtedness                                   1,129      2,235
Proceeds from issuance of common stock                                 8,226          0
Repurchase of common stock                                              (283)         0
Affiliate receivable                                                       0    (16,000)
                                                                   ---------    -------
              NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES         97,772      2,985
                                                                   ---------    -------
CASH - net change                                                    (56,886)   (17,827)
       beginning of period                                            75,298     26,104
                                                                   ---------    -------
       end of period                                               $  18,412      8,277
                                                                   =========      =====
Supplemental cash flow data
Interest paid                                                      $  41,370     25,221
Income taxes paid                                                      2,316      3,127
Non-cash exchange of preferred stock for common stock                164,174          0
Non-cash accrual of 1994 Management Stock Ownership Plan expense           0      3,690
</TABLE>


See Unaudited Notes to Condensed Consolidated Financial Statements




                                       5
<PAGE>   6
EVENFLO & SPALDING HOLDINGS CORPORATION AND SUBSIDIARIES
UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND THE NINE MONTHS ENDED JUNE 30, 1997 AND 1996
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


BASIS OF PRESENTATION

The accompanying condensed consolidated balance sheet of Evenflo & Spalding
Holdings Corporation and subsidiaries (the "Company") as of June 30, 1997, and
the related condensed statements of consolidated earnings (loss) for the three
and nine months ended June 30, 1997 and 1996, and of cash flows for the nine
months ended June 30, 1997 and 1996, are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such condensed
consolidated financial statements have been included. Such adjustments consisted
only of normal recurring items. Interim results may not be indicative of results
for a full year.

The condensed consolidated financial statements and notes are presented as
permitted by Form 10-Q of the Securities and Exchange Commission and do not
contain certain information included in the Company's annual consolidated
financial statements and notes. The condensed consolidated balance sheet as of
September 30, 1996, was derived from the Company's audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles. This Form 10-Q should be read in conjunction with the Company's
consolidated financial statements and accompanying notes included in its
Amendment No. 3 to Registration Statement on Form S-4 (file no. 333-14569).

<TABLE>
<CAPTION>
INVENTORIES                                  June 30,       September 30,
                                               1997              1996
                                               ----              ----
                  <S>                        <C>               <C>
                  Finished goods             $103,723           74,890
                  Work in process              21,570           17,088
                  Raw materials                29,982           17,193
                                             --------          --------
                  Total inventories          $155,275          109,171
                                             ========          =======
</TABLE>


INCOME TAXES

For the three months and nine months ended June 30, 1997, the Company recorded
earnings (loss) before income taxes of $566 and $(28,064). The Company has
recorded a $9,822 charge in the three months ended June 30, 1997, to reflect
higher than expected losses by certain non-U.S. subsidiaries for which no tax
benefit is being recorded. As a result of the Company's potential inability to
receive a tax benefit from these losses, coupled with the payment of certain
foreign withholding taxes, the Company has changed its estimate of its effective
tax rate from 50% to 15% through its third quarter charge.


                                       6
<PAGE>   7
RECAPITALIZATION AND STOCK PURCHASE AGREEMENT

Prior to September 30, 1996, the Company was a wholly-owned subsidiary of Abarco
N.V. ("Abarco"). On August 15, 1996, Abarco and Strata Associates L.P.
("Strata"), an affiliate of Kohlberg Kravis Roberts & Co., L.P. ("KKR"), entered
into a Recapitalization and Stock Purchase Agreement pursuant to which Strata
acquired control of the Company (the "Recapitalization"). The closing of the
Recapitalization took place on September 30, 1996. In connection with the
Recapitalization a portion of the common stock owned by Abarco was redeemed for
total consideration of approximately $581,933.

ACQUISITIONS

In July 1996, the Company acquired the net assets of Etonic, Inc., which
manufactures and/or markets golf shoes, gloves, and other golf accessories, as
well as an established line of running and walking shoes. The operating results
of Etonic have been included in the condensed statement of consolidated earnings
(loss) from the date of acquisition. As a result, Etonic's operations are
included in the condensed statement of consolidated earnings (loss) for the
three months and the nine months ended June 30, 1997, but not for the three
months and the nine months ended June 30, 1996. Etonic's pro forma net sales for
the three months and nine months ended June 30, 1996, were $17,195 and $42,942,
and consolidated pro forma net earnings (loss) were $173 and $(31).

On April 21, 1997, the Company acquired the net assets of Gerry Baby Products
Company for a purchase price of approximately $72,100. Gerry manufactures and/or
markets specialty juvenile products including baby bath, health and safety
items, monitors and other baby care products and accessories, as well as
juvenile car seats, strollers, high chairs, cribs dressers and changing tables,
gates, and soft and frame carriers marketed under the Gerry(R) and Snugli(R)
brand names. The operating results of Gerry have been included in the condensed
statement of consolidated earnings (loss) from the date of acquisition. As a
result, Gerry's operations since April 21, 1997, are included in the condensed
statement of consolidated earnings (loss) for the three and nine months ended
June 30, 1997, but not for the three and nine months ended June 30, 1996.
Gerry's pro forma net sales and net loss for the twelve months ended December
31, 1996, were $120,646 and $(2,262). Gerry's pro forma net sales for the two
months ended June 30, 1996, were $20,642, and consolidated pro forma net loss
was $(344).

COMMON STOCK

On October 25, 1996, the shareholders of the Company approved the general terms
of the 1996 Stock Purchase and Option Plan for Key Employees of Evenflo &
Spalding Holdings Corporation and Subsidiaries (the "Plan"). On January 27,
1997, the Company filed a Registration Statement on Form S-8 offering to certain
key employees of the Company an aggregate of 7,484,556 shares of common stock,
par value $.01 per share, including shares subject to options. In 1997 the
Company has sold 1,645,238 shares and granted options for 5,118,646 shares under
the Plan resulting in $8,226 of proceeds. The issuance price of the shares and
the exercise price of the options are $5.00 per share. There are 720,672
unissued shares and options remaining under the Plan.


                                       7
<PAGE>   8
On June 25, 1997, Strata, which owns all of the Company's outstanding shares of
12 1/2% preferred stock (liquidation value of $164,174), exchanged all the
preferred shares for 32,834,840 additional shares of the Company's common stock
at an exchange price of $5.00 per common share.

On July 15, 1997, a Strata affiliate invested $45,600 and Abarco invested $3,400
for 9,800,000 additional shares of the Company's common stock at a price of $5
per common share.

As of July 15, 1997, the Company's pro forma common stock and paid-in capital
are as follows:

<TABLE>
         <S>                                                       <C>
         Common stock, $.01 par value, 100,000,000 shares
              authorized and 94,280,078 shares outstanding         $    943
         Paid-in capital                                            444,083
</TABLE>


CONTINGENCIES

The Company is both a plaintiff and defendant in numerous lawsuits incidental to
its current and former operations, some alleging substantial claims. In
addition, the Company's operations are subject to federal, state, and local
environmental laws and regulations. The Company has entered into settlement
agreements with the U.S. Environmental Protection Agency and other parties on
several sites, and is still negotiating on other sites. The settlement amounts
and estimated liabilities are not significant.

Management is of the opinion that, after taking into account the merits of
defenses, insurance coverage and established reserves, the ultimate resolution
of these matters will not have a material adverse effect in relation to the
Company's condensed consolidated financial statements.






                                       8
<PAGE>   9
INDEPENDENT ACCOUNTANTS' REPORT


The Board of Directors
Evenflo & Spalding Holdings Corporation:


We have reviewed the accompanying condensed consolidated balance sheet of
Evenflo & Spalding Holdings Corporation and subsidiaries (the "Company") as of
June 30, 1997, and the related condensed statements of consolidated earnings
(loss) for the three and nine months ended June 30, 1997 and 1996, and of cash
flows for the nine months ended June 30, 1997 and 1996. These financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company at September 30, 1996,
and the related statements of consolidated earnings (loss), consolidated cash
flows and consolidated shareholders' equity (deficiency) for the year then ended
(not presented herein); and in our report dated October 28, 1996, we expressed
an unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of September 30, 1996, is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.


DELOITTE & TOUCHE LLP

Tampa, Florida
July 25, 1997




                                       9
<PAGE>   10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS


FORWARD LOOKING STATEMENTS

With the exception of historical information (information relating to the
Company's financial condition and results of operations at historical dates or
for historical periods), the matters discussed in this Management's Discussion
and Analysis of Financial Condition and Results of Operations are
forward-looking statements that necessarily are based on certain assumptions and
are subject to certain risks and uncertainties. These forward-looking statements
are based on management's expectations as of the date hereof. Actual future
performance and results could differ from that contained in or suggested by
these forward-looking statements as a result of the factors set forth in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations and elsewhere in the June 30, 1997, Form 10-Q and related filings
with the Securities and Exchange Commission.


RESULTS OF OPERATIONS

         Quarter Ended June 30, 1997 ("1997 third quarter") as Compared
            to the Quarter Ended June 30, 1996 ("1996 third quarter")

NET SALES are gross sales net of returns, allowances, trade discounts, freight
on goods sold and royalties paid on third-party trademarks used on the Company's
products. The Company's net sales increased 26.5% to $251.4 million for the 1997
third quarter compared to $198.7 million for the same period in the prior year.
Spalding net sales increased $21.7 million or 16.0% to $157.2 million for the
1997 third quarter compared to $135.5 million for the 1996 third quarter.
Spalding's net sales increase is primarily attributable to $17.9 million golf
shoe net sales of Etonic, which was acquired in July 1996. Additionally,
Spalding experienced higher net sales of golf balls, golf clubs, and golf bags.
International net sales at Spalding declined 12.2% or $6.0 million in the 1997
third quarter compared to the 1996 third quarter. The decrease resulted
primarily from lower net sales of golf products in Japan and Europe partially
offset by increases of golf product net sales in Canada.

Net sales at Evenflo for the 1997 third quarter increased $31.1 million to $94.2
million from $63.1 million for the 1996 third quarter. The 49.3% increase at
Evenflo is principally due to $29.1 million in net sales from Evenflo's April
1997 acquisition of Gerry Baby Products. The remaining $2.0 million Evenflo net
sales increase is due to higher net sales of Travel System(R) strollers and
Phases(TM) high chairs, partially offset by lower net sales of car seats and
play yards. International net sales at Evenflo increased $1.8 million in the
1997 third quarter compared to the 1996 third quarter principally due to higher
net sales in Canada and Mexico.




                                       10
<PAGE>   11
GROSS PROFIT is net sales less cost of sales which consists of the costs
necessary to make the Company's products, including the costs of raw material,
production, warehousing, and procurement. For the 1997 third quarter, Company
gross profit increased $7.9 million to $81.3 million from $73.4 million for the
same period in the prior year. Gross profit as a percentage of net sales
decreased to 32.3% for the 1997 third quarter from 36.9% for the prior year
comparable quarter due principally to (i) increased net sales of lower margin
products, including golf clubs, golf shoes, strollers, high chairs, bath
products and gates, (ii) $1.3 million in purchase accounting effects of Gerry's
inventory turnover, and (iii) higher wages, maintenance and shipping expenses.

SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") expenses consists of the costs
necessary to sell the Company's products and the general and administrative
costs of managing the business, including salaries and related benefits,
commissions, advertising and promotion expenses, bad debts, travel, amortization
of intangible assets, insurance and product liability costs and professional
fees. SG&A expenses for the 1997 third quarter were $65.0 million which were
$24.8 million, or 61.7%, higher than SG&A expenses of $40.2 million in the
comparable quarter last year. Spalding's SG&A expenses increased $19.4 million
in the 1997 third quarter primarily from (i) the inclusion of Etonic golf shoes
and (ii) higher advertising, promotion, and research and development costs.
Evenflo had $5.3 million higher SG&A expenses in the 1997 third quarter
principally due to (i) the inclusion of Gerry Baby Products and (ii) higher
consumer corrective campaign costs (see "Other"), advertising, promotion, and
wages. The corporate office had $0.1 million higher SG&A expenses in the 1997
third quarter.

1994 MANAGEMENT STOCK OWNERSHIP PLAN expense represents compensation expense
related to the increase in the fair value of common stock of the Company held by
certain members of senior management which were purchased by the Company in
connection with the September 30, 1996, recapitalization. In the 1996 third
quarter, the 1994 Management Stock Ownership Plan expense was $1.2 million;
however, such plan was terminated as part of the recapitalization and
accordingly there was no such expense for the 1997 third quarter.

INTEREST EXPENSE increased to $19.3 million in the 1997 third quarter from $8.6
million in the 1996 third quarter, an increase of $10.7 million. This increase
is due to the issuance by the Company of $200 million 10 3/8% Series B Senior
Subordinated Notes ("Notes") due 2006 and borrowings under the Company's $650
million Credit Facility (the "Credit Facility") (comprised of $400 million of
term loans and a $250 million Revolving Credit Facility) which were applied to
finance the Company recapitalization on September 30, 1996. The Company's
average borrowings under the Notes, Credit Facility and certain non-U.S.
borrowing arrangements for the 1997 third quarter was $726 million, compared to
$355 million under the Company's borrowing arrangements then in effect during
the 1996 third quarter.

CURRENCY LOSS of $0.2 million for the 1997 third quarter is $0.3 million lower
than the $0.5 million currency loss in the 1996 third quarter. See "Liquidity
and Capital Resources".




                                       11
<PAGE>   12
INCOME TAXES of $10.1 million for the 1997 third quarter includes a $9.8 million
charge to reflect higher than expected losses by certain non-U.S. subsidiaries
for which no tax benefit is being recorded. As a result of the Company's
potential inability to receive a tax benefit from these losses, coupled with the
payment of certain foreign withholding taxes, the Company has changed its
estimate of its effective tax rate from 50% to 15% through its third quarter
charge.

NET LOSS is $9.5 million for the 1997 third quarter compared to $13.7 million in
net earnings for the 1996 third quarter. The $23.2 million decrease in earnings
is a result of (i) higher interest expense associated principally with the
Company's recapitalization, (ii) Evenflo consumer corrective campaign costs,
(iii) higher Spalding and Evenflo advertising, promotion, and other expenses,
and (iv) the $9.8 million change in management's income tax estimate; partially
offset by (i) operating profit from the inclusion of Etonic, (ii) $0.3 million
lower currency loss, and (iii) 1994 Management Stock Ownership Plan expenses in
the 1996 third quarter which did not recur in the 1997 third quarter.

OTHER. Evenflo has conducted several consumer corrective campaigns. On February
19, 1997, Evenflo announced that certain Champion(R) and Scout(TM) child
restraints manufactured between June 1993 and November 1996 had failed to pass
chest acceleration requirements. Evenflo offered consumers a kit which modified
the seats' recline angle to comply with the chest acceleration requirement. The
National Highway Traffic Safety Administration ("NHTSA") issued a press release
regarding the Evenflo February 19, 1997, campaign on July 15, 1997. On June 25,
1997, Evenflo announced a campaign offering free hinge covers to owners of its
Happy Camper(R) portable play yards and stressing the need for consumers to
properly erect the play yards before use. The free hinge covers provide a visual
cue reminding users to fully rotate the hinges when setting up the products and
also reinforce the hinges so that they can better withstand the effects of
climbing, leaning, and sitting by adults or older children. On July 15, 1997,
Evenflo and NHTSA jointly announced a campaign offering replacement adjuster
mechanisms for 150,000 Champion(R), Trooper(R) and Scout(TM) child seats
manufactured between October 14, 1996 and February 6, 1997. Testing had revealed
that a batch of adjuster mechanisms could slip, possibly permitting additional
forward movement of a child's head and shoulders in the event of an accident.


        Nine Months Ended June 30, 1997 ("1997 nine months") as Compared
           to the Nine Months Ended June 30, 1996 ("1996 nine months")

NET SALES increased to $582.5 million in the 1997 nine months from $490.1
million for the 1996 nine months, an increase of $92.4 million or 18.9%.
Spalding net sales increased $56.3 million in the 1997 nine months over the 1996
nine months. The July 1996 acquisition of Etonic contributed $49.4 million of
the net sales increase at Spalding in the 1997 nine months. Top-Flite(R) golf
ball sales were lower in the 1997 nine months due to high inventory levels at
retailers and lower net sales in Japan and Europe. However, net sales of
Strata(TM) golf balls remain strong. Range and custom golf ball net sales were
higher in the 1997 nine months. Golf club and bag net sales advanced over the
1996 nine months as Top-Flite(R) tour irons with titanium inserts and Muscle(TM)
shafts, and Intimidator(TM) drivers continue to gain consumer acceptance.




                                       12
<PAGE>   13
International net sales at Spalding declined 8.1% or $9.3 million in the 1997
nine months compared to the 1996 nine months. The decrease resulted from lower
net sales of golf products in Japan and Europe, lower net sales in Australia
from the discontinuation of the NBA clothing line in 1997; partially offset by
increases of golf product net sales in Mexico, Southeast Asia, and Canada.
Management anticipates net sales in Japan for fiscal 1997 to be lower than
fiscal 1996 due to weak Japanese economic conditions and low consumer confidence
levels coupled with the currency impact of a strong U.S. dollar.

Net sales at Evenflo increased 21.3% or $36.1 million to $205.7 million for the
1997 nine months compared to $169.6 million in the 1996 nine months. The April
1997 acquisition of Gerry Baby Products contributed $29.1 million of the net
sales increase at Evenflo in the 1997 nine months. Other increases in Evenflo
net sales for the comparable period were led by the Travel System(R) stroller,
Phases(TM) high chair and play yards; partially offset by decreases in net sales
of car seats and activity products. Net sales in Mexico and Canada are up $2.6
million over the prior year nine months but are partially offset by $0.5 million
lower Far East net sales.

GROSS PROFIT increased to $189.3 million in the 1997 nine months from $174.3
million in the 1996 nine months, an increase of $15.0 million or 8.6%. As a
percentage of sales, Company gross profit margins decreased to 32.5% for the
1997 nine months from 35.6% for the 1996 nine months. The decrease is primarily
attributable to: (i) increased net sales of lower margin products, including
golf clubs, golf shoes, strollers, high chairs, bath products, gates, and play
yards, (ii) $1.3 million in purchase accounting effects of Gerry's inventory
turnover, and (iii) increased manufacturing cycle time for Strata(TM) golf
balls, and higher salary, utility, shipping and freight costs.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A") increased to $173.4
million for the 1997 nine months from $138.2 million for the 1996 nine months,
an increase of $35.2 million or 25.5%. As a percentage of sales, SG&A expenses
increased to 29.8% for the 1997 nine months from 28.2% for the 1996 nine months.
Spalding's $28.7 million increase is primarily a result of: (i) the inclusion of
Etonic golf shoes, (ii) $0.8 million of costs associated with obtaining the
Etonic Canadian distribution rights in the 1997 first quarter, and (iii) higher
advertising, promotion, salary, bad debt, research and development costs.

Evenflo had $6.5 million higher SG&A expenses in the 1997 nine months
principally from, (i) the inclusion of Gerry Baby Products, and (ii) higher
consumer corrective campaign costs, advertising, promotion, bad debts, wages,
and fringe benefits.

1994 MANAGEMENT STOCK OWNERSHIP PLAN expense was $3.7 million in the 1996 nine
months; however, such plan was terminated as part of the September 30, 1996,
recapitalization and accordingly there was no such expense for the 1997 nine
months.

INTEREST EXPENSE increased to $53.1 million in the 1997 nine months from $27.2
million in the 1996 nine months, an increase of $25.9 million. The increase is
due principally to the issuance of $200 million of Notes and higher levels of
borrowings under the Credit Facility in the 1997 nine months versus the 1996
nine months. The Company's average borrowings under the Notes, Credit Facility
and certain non-U.S. borrowing arrangements for the 1997 nine months was $664




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<PAGE>   14
million compared to $350 million under the Company's borrowing arrangements then
in effect during the 1996 nine months.

CURRENCY LOSS of $0.4 million for the 1997 nine months is $0.6 million lower
than the $1.0 million currency loss in the 1996 nine months. See "Liquidity and
Capital Resources."

INCOME TAX benefits for the 1997 nine months were $4.2 million (in relation to a
loss before income taxes of $28.1 million) after giving effect to a $9.8 million
charge to reflect a change in management's estimate of the Company's effective
tax rate from 50% to approximately 15%. The change in the estimate of the
effective tax rate is due to higher than expected losses by foreign subsidiaries
for which no tax benefit is being recorded. The inability to assure a tax
benefit on these losses, coupled with payment of certain foreign withholding
taxes, results in a lowering of the effective tax rate when a loss occurs before
income taxes.

NET LOSS is $23.8 million for the 1997 nine months compared to $6.6 million in
net earnings for the comparable 1996 nine month period. The $30.4 million
decrease in net earnings is a result of (i) higher interest expense associated
with the Company's recapitalization and (ii) higher Spalding and Evenflo
advertising, promotion, and other expenses, and (iii) Evenflo consumer
corrective campaign costs; partially offset by (i) operating profit from the
inclusion of Etonic golf shoes, net of $0.8 million in costs associated with
obtaining the Etonic Canadian distribution rights, (ii) $0.6 million lower
currency loss, (iii) $11.2 million higher tax benefit, and (iv) 1994 Management
Stock Ownership Plan expenses in the 1996 nine months which do not recur in the
1997 nine months.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of liquidity are from cash flows generated from
operations and borrowings under the Credit Facility and certain non-U.S. credit
facilities. The Company believes its business is somewhat seasonal. For fiscal
1996, quarterly net sales as a percentage of total sales were approximately 16%,
26%, 29%, and 29%, respectively, and quarterly income (loss) from operations as
a percentage of total income (loss) from operations was approximately (10)%,
26%, 67%, and 17%, respectively. Many sporting goods marketed by Spalding,
especially golf products, experience higher levels of sales in the spring and
summer months. The Company's need for cash historically has been greater in its
first and second quarters when cash generated from operating activities coupled
with draw downs from credit facilities have been invested in receivables and
inventories.

For the 1997 nine months, the Company used $154.7 million in cash before
financing activities to fund $61.5 million in operating activities, and invest
$21.0 million in capital expenditures and $72.1 million in the acquisition of
Gerry Baby Products. Cash usages in the 1997 nine months were funded from (i)
$56.9 million in excess cash and cash equivalents at September 30, 1996, (ii)
$89.8 million in net borrowings from the Company's Revolving Credit Facility and
credit facilities available to certain of the Company's non-U.S. operations, and
(iii) $7.9 million in proceeds from the issuance of common stock (net of
repurchases) to certain key employees of the Company under the 1996 Stock
Purchase and Option Plan for Key Employee of Evenflo & Spalding Holdings
Corporation and Subsidiaries.




                                       14
<PAGE>   15
Net cash flow used by operating activities for the 1997 nine months is $61.5
million compared to $13.7 million in the 1996 nine months. The $47.8 million
difference in cash flow from operating activities in the comparable quarters is
due to $34.2 million in lower net earnings (as adjusted for depreciation and
other non-cash expenses) and a $13.6 million increase in working capital
attributable principally to (i) net working capital from the Etonic and Gerry
Baby Products acquisitions, (ii) increased receivables from higher sales and
Spalding incentive programs, (iii) higher inventory levels to support increased
sales at Spalding and Evenflo; reduced by higher trade payables and bankers
acceptances from increases in imported inventory levels.

Capital expenditures were $21.0 million for the 1997 nine months compared to
$7.1 million in the 1996 nine months. Spalding capital expenditures were $5.0
million higher in the 1997 nine months, the majority of which was used to
improve production equipment and begin a multiphase expansion of its warehouse
and golf ball facilities at its Chicopee, Massachusetts operations. Management
estimates the multiphase project could amount to $23 million in total over two
fiscal years with approximately $6.0 million expected to be expended in the last
quarter of fiscal 1997. Capital expenditures at Evenflo are $8.9 million higher
than the comparable 1996 nine months primarily from the expansion of its
warehousing and shipping facilities in Piqua, Ohio. Evenflo estimates the
expansion and facilities upgrade could amount to $11 million in fiscal 1997.
Management anticipates approximately $2.0 million will be required in the last
quarter of fiscal 1997 to complete the Piqua facility expansion, modernize
distribution systems, and re-engineer assembly operations. As a result of this
and other capital programs, management expects capital expenditures in the 1997
fiscal year to exceed those in the 1996 fiscal year.

On October 25, 1996, the shareholders of the Company approved the general terms
of the 1996 Stock Purchase and Option Plan for Key Employees of Evenflo &
Spalding Holdings Corporation and Subsidiaries (the "Plan"). On January 27,
1997, the Company filed a Registration Statement on Form S-8 offering to certain
key employees of the Company an aggregate of 7,484,556 shares of common stock,
par value $.01 per share, including shares subject to options. In 1997 the
Company has sold 1,645,238 shares and granted options for 5,118,646 shares under
the Plan resulting in $8.2 million of proceeds.

On April 21, 1997, the Company acquired the net assets of Gerry Baby Products
Company for a purchase price of approximately $72.1 million. Gerry manufactures
and/or markets specialty juvenile products including baby bath, health and
safety items, monitors and other baby care products and accessories, as well as
juvenile car seats, strollers, high chairs, cribs dressers and changing tables,
gates, and soft and frame carriers marketed under the Gerry(R) and Snugli(R)
brand names.

On June 25, 1997, Strata exchanged all 1,641,742 shares of the 12 1/2%, $100
liquidation value preferred shares outstanding for common shares of the Company.
The exchanged shares included the 1,500,000 preferred shares issued on September
30, 1996, plus 141,742 shares issued on June 25, 1997, in payment of $14.2
million in accrued preferred dividends. The exchange was effected by the
issuance of 32,834,840 common shares at a price of $5 per share.

On July 15 ,1997, the Company's two primary shareholders invested an additional
$49.0 million in 9,800,000 shares of common stock of the Company. The
shareholders made the additional equity




                                       15
<PAGE>   16
investment to partially fund the April 21, 1997, acquisition of Gerry Baby
Products, and the proceeds were used to pay down short-term borrowings incurred
in the acquisition.

On July 18, 1997, Evenflo announced its plan to consolidate the Gerry Baby
Products operations located in Thornton, Colorado into Evenflo's other
facilities. The Company intends to offer a severance package, including
outplacement services, to the 400 affected Thornton employees. The Company has
not decided on the parameters of the severance and accordingly, the Company
cannot at this time estimate the size of the charge.

The primary sources of cash flows from financing activities are from borrowings
under the $250 million Revolving Credit Facility and under credit facilities
available to certain of the Company's non-U.S. facilities. At June 30, 1997, the
Company had an available borrowing capacity of approximately $19.1 million (net
of $116.4 million of outstanding letters of credit and bankers' acceptances)
under the Revolving Credit Facility. Proceeds from the July 15, 1997, equity
investment were used to reduce borrowings under the Revolving Credit Facility
which increases the available borrowing capacity by $49.0 million.

CURRENCY HEDGING. In fiscal 1996 approximately 28% of the total Company net
sales were generated in non-U.S. currencies. Fluctuations in the value of these
currencies relative to the U.S. dollar could have a material effect on the
Company's results of operations. The Company, in its discretion, uses forward
exchange contracts to hedge up to six month transaction exposures from U.S.
dollar purchases made by its non-U.S. operations.






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<PAGE>   17
PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Reference is made to Part II, Item 1 "Legal Proceedings" of Registrant's Form
10-Q Statement, filed February 14, 1997, for the period ended December 31, 1996.
Since that date, the Company has not been named as a defendant in any action
which, to the best of the Company's knowledge, could have a material adverse
effect.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

             *10.1         Asset Purchase agreement dated as of March 7, 1997,
                           by and among Gerry Baby Products Company, Gerry Wood
                           Products Company, as sellers, Huffy Corporation, and
                           Evenflo Company, Inc. as purchaser.
             *27.          Financial Data Schedule

         (b) Reports on Form 8-K

               None










*        Filed herewith.




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