<PAGE>   1

                                  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 MARCH 31, 1997.
                                                             ---------------

                                       OR

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

Commission File Number 0-5888

                                 WAXMAN USA INC.
                                 ---------------
             (Exact Name of Registrant as Specified in its Charter)

                     DELAWARE                              34-1761514
                     --------                              ----------
             (State of Incorporation)                   (I.R.S. Employer
                                                       Identification Number)

                 24460 AURORA ROAD
                 BEDFORD HEIGHTS, OHIO                        44146
                 ---------------------                        -----
         (Address of Principal Executive Offices)            (Zip Code)

                                 (216) 439-1830
                                 --------------
               (Registrant's Telephone Number Including Area Code)

                                 NOT APPLICABLE
                                 --------------
              (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 ninety (90) days.

                                            Yes   X   No
                                                 ---      ---

100 shares of Common Stock, $.01 par value, were outstanding as of May 5, 1997.


                                       1
<PAGE>   2





                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------
                               INDEX TO FORM 10-Q
                               ------------------

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----

<S>                                                                         <C> 
PART 1.  FINANCIAL INFORMATION
------------------------------

Item 1.  Financial Statements (Unaudited)

            Condensed Consolidated Statements of Operations -
            Nine Months and Three Months Ended March 31, 1997
            and 1996...............................................           3

            Condensed Consolidated Balance Sheets -
            March 31, 1997 and June 30, 1996.......................         4-5

            Condensed Consolidated Statements of Cash Flows -
            Nine Months Ended March 31, 1997 and
            1996...................................................           6

            Notes to Condensed Consolidated Financial
            Statements.............................................         7-9

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                            9-14

PART II. OTHER INFORMATION
--------------------------

Item 5.  Other Information.........................................          15

Item 6.  Exhibits and Reports on Form 8-K..........................          15
</TABLE>


SIGNATURES
----------

EXHIBIT INDEX
-------------



                                       2
<PAGE>   3





PART 1.  FINANCIAL INFORMATION
         ---------------------

ITEM 1.  FINANCIAL STATEMENTS

                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                                   (UNAUDITED)

       FOR THE NINE MONTHS AND THREE MONTHS ENDED MARCH 31, 1997 AND 1996

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                    Nine Months Ended               Three Months Ended
                                                    -----------------               ------------------
                                                        March 31,                        March 31,
                                                        ---------                        ---------
                                                  1997             1996             1997            1996
                                                  ----             -----            ----            ----
<S>                                             <C>              <C>             <C>              <C>     
Net sales                                       $199,616         $175,477        $ 65,628         $ 58,543

Cost of sales                                    129,634          123,239          42,417           46,112
                                                 -------          -------         -------          -------

Gross profit                                      69,982           52,238          23,211           12,431

Selling, general and
   administrative expenses                        48,005           45,457          16,303           17,402

Corporate charge                                   2,463            2,521             813              797
                                                  ------           ------          ------           ------

Operating income (loss)                           19,514            4,260           6,095           (5,768)

Interest expense, net                              5,614           13,967           1,999            4,480
                                                 -------          -------         -------          -------

Income (loss) before income taxes,
  minority interest, discontinued
  operation and cumulative effect                 13,900           (9,707)          4,096          (10,248)
  of change in accounting

Provision (benefit) for income taxes               6,116           (2,940)          2,164           (3,340)
                                                 -------          --------        -------          --------

Income (loss) before minority interest,
  discontinued operation and cumulative
  effect of change in accounting                   7,784           (6,767)          1,932           (6,908)

Minority interest in consolidated
  affiliate                                        4,411                -           1,554                -

Reversal of loss on disposal of business,
  net of tax effect                                    -            6,600               -            6,600
Cumulative effect of change in
  accounting, net of tax benefit                       -           (4,928)              -                -
                                                 -------          -------         -------          -------
Net income (loss)                               $  3,373         $ (5,095)       $    378         $   (308)
                                                 =======          =======         =======          ========
</TABLE>






     The accompanying Notes to Condensed Consolidated Financial Statements
                   are an integral part of these statements.



                                       3
<PAGE>   4





                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------

                        MARCH 31, 1997 AND JUNE 30, 1996

                                 (IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                          March 31,                June 30,
                                                             1997                    1996
                                                         (Unaudited)               (Audited)
                                                         -----------               ---------

<S>                                                       <C>                      <C>     
         CURRENT ASSETS:
           Cash                                           $  2,383                 $  2,453
           Accounts receivable, net                         41,074                   36,537
           Inventories                                      64,365                   59,883
           Prepaid expenses                                  2,922                    3,866
                                                           -------                  -------
             Total current assets                          110,744                  102,739
                                                           -------                  -------

         PROPERTY AND EQUIPMENT:
           Land                                                504                      428
           Buildings                                         9,887                    9,193
           Equipment                                        24,589                   20,665
                                                           -------                  -------
                                                            34,980                   30,286
           Less accumulated depreciation
               and amortization                            (16,195)                 (15,349)
                                                           -------                  -------
           Property and equipment, net                      18,785                   14,937

         COST OF BUSINESSES IN EXCESS
            OF NET ASSETS ACQUIRED, NET                     13,009                   13,318
         UNAMORTIZED DEBT ISSUANCE COSTS, NET                1,200                    1,100
         OTHER ASSETS                                        2,150                      969
                                                           -------                  -------
                                                          $145,888                 $133,063
                                                          ========                 ========
</TABLE>





     The accompanying Notes to Condensed Consolidated Financial Statements
                   are an integral part of these statements.

                                       4

<PAGE>   5


                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------

                        MARCH 31, 1997 AND JUNE 30, 1996

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                      LIABILITIES AND STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
                                                                 March 31,                   June 30,
                                                                   1997                        1996
                                                                (Unaudited)                  (Audited)
                                                                -----------                  ---------

<S>                                                              <C>                        <C>      
CURRENT LIABILITIES:
  Current portion of long-term debt                              $ 21,869                   $  10,775
  Accounts payable                                                 27,007                      27,547
  Accrued liabilities                                               6,947                       9,304
  Accrued income taxes payable                                      1,268                       2,037
  Accrued interest                                                    934                       1,364
                                                                  -------                    --------
      Total current liabilities                                    58,025                      51,027
                                                                  -------                    --------

LONG-TERM DEBT, NET OF CURRENT PORTION                                818                         863

SENIOR NOTES                                                       47,855                      43,026

PUSH-DOWN DEBT                                                        895                       5,724

MINORITY INTEREST IN CONSOLIDATED AFFILIATE                        25,018                      20,606

STOCKHOLDER'S EQUITY:
  Preferred stock, $.01 par value per share:
    Authorized and unissued 1,000 shares                                -                           -
  Common Stock, $.01 par value per share:
    Authorized 9,000 shares; 100 shares issued and
    outstanding                                                         -                           -
  Advances to Waxman Industries, Inc.                             (18,791)                    (16,913)
  Paid-in capital                                                  21,462                      21,462
  Retained earnings                                                10,929                       7,556
                                                                 --------                    --------
                                                                   13,600                      12,105
  Cumulative currency translation adjustment                         (323)                       (288)
                                                                 --------                    --------

    Total stockholder's equity                                     13,277                      11,817
                                                                 --------                    --------
                                                                 $145,888                    $133,063
                                                                 ========                    ========
</TABLE>




     The accompanying Notes to Condensed Consolidated Financial Statements
                   are an integral part of these statements.



                                       5
<PAGE>   6









                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                   (UNAUDITED)

                FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND 1996

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                             1997              1996
                                                                                           --------          --------

<S>                                                                                        <C>              <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
  Net income (loss)                                                                        $ 3,373          $ (5,095)
  Adjustments to reconcile net income (loss) to
    net cash provided by (used in) operating
    activities:
      Cumulative effect of change in accounting                                                  -             8,213
      Reversal of loss on disposal                                                               -           (11,000)
      Minority interest in consolidated affiliate                                            4,411                 -
      Depreciation and amortization                                                          4,273             3,587
  Changes in assets and liabilities:
    Accounts receivable, net                                                                (4,537)              272
    Inventories                                                                             (5,607)            6,933
    Prepaid expenses and other assets                                                         (549)            1,628
    Accounts payable                                                                          (540)            5,798
    Accrued liabilities                                                                     (2,787)            2,512
    Accrued income taxes                                                                      (769)              500
    Other, net                                                                                 (35)             (192)
                                                                                           -------           -------
      Net Cash (Used in) Provided by Operating
      Activities                                                                            (2,767)           13,156
                                                                                           --------          -------

CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
  Capital expenditures, net                                                                 (6,474)           (2,964)
                                                                                           -------           -------

      Net Cash (Used in) Investing Activities                                               (6,474)           (2,964)
                                                                                           -------           -------

CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
  Borrowings under credit agreement                                                         93,485           175,685
  Payments under credit agreement                                                          (82,391)         (180,434)
  (Repayments) Borrowings of long-term debt                                                    (45)             (107)
  Capital contribution from parent                                                               -            12,577
  Advances to parent                                                                        (1,878)          (18,183)
                                                                                          ---------          -------

      Net Cash Provided by
        (Used in) Financing Activities                                                       9,171           (10,462)
                                                                                           -------           -------

NET DECREASE IN CASH                                                                           (70)             (270)

BALANCE, BEGINNING OF PERIOD                                                                 2,453             2,062
                                                                                           -------           -------

BALANCE, END OF PERIOD                                                                    $  2,383          $  1,792
                                                                                           =======           =======
</TABLE>


     The accompanying Notes to Condensed Consolidated Financial Statements
                   are an integral part of these statements.



                                       6
<PAGE>   7



                        WAXMAN USA INC. AND SUBSIDIARIES
                        --------------------------------

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (UNAUDITED)

                                 MARCH 31, 1997

NOTE 1 - BASIS OF PRESENTATION
         ---------------------

Waxman USA Inc. ("Waxman USA"), a wholly owned subsidiary of Waxman Industries,
Inc. ("Waxman Industries"), was formed on February 2, 1994. The accompanying
condensed consolidated financial statements include the accounts of Waxman USA,
its wholly owned subsidiaries and its affiliate, Barnett Inc. (collectively, the
"Company"). Waxman USA owns approximately 49.9% of the voting capital stock of
Barnett Inc. ("Barnett") and, together with non-voting preferred stock of
Barnett owned by Waxman USA, owns approximately 54% of the capital stock of
Barnett. The portion of Barnett not owned by Waxman USA is reflected as minority
interest in the accompanying condensed consolidated balance sheets. See Note 6
for Subsequent Event. All significant intercompany transactions and balances are
eliminated in consolidation.

During fiscal 1994, Waxman Industries restructured its domestic operations such
that Waxman Industries is now a holding company whose only material assets are
the capital stock of its subsidiaries (the "Corporate Restructuring"). As part
of the Corporate Restructuring, Waxman Industries formed (a) Waxman USA as a
holding company for the subsidiaries that comprise and support Waxman
Industries' domestic operations, (b) Waxman Consumer Products Group Inc.
("Consumer Products"), to own and operate Consumer Products Group division, and
(c) WOC Inc. ("WOC"), to own and operate Waxman USA's domestic subsidiaries,
other than Barnett Inc. and Consumer Products. On May 20, 1994, Waxman
Industries completed the Corporate Restructuring by (i) contributing the capital
stock of Barnett to Waxman USA, (ii) contributing the assets and liabilities of
the Consumer Products Group division to Consumer Products, (iii) contributing
the assets and liabilities of Madison Equipment division to WOC., (iv)
contributing the assets and liabilities of Medal Distributing division to WOC,
(v) merging U.S. Lock Corporation and LeRan Copper & Brass Inc. into WOC, (vi)
contributing the capital stock of TWI International, Inc. ("TWI") to Waxman USA
and (vii) contributing the capital stock of Western American Manufacturing Inc.
("WAMI") to TWI. This restructuring was accounted for based upon each entity's
historical carrying amounts.

The condensed consolidated statements of operations for the nine months and
three months ended March 31, 1997 and 1996, the condensed balance sheet as of
March 31, 1997 and the condensed statements of cash flows for the nine months
ended March 31, 1997 and 1996 have been prepared by the Company without audit,
while the condensed balance sheet as of June 30, 1996 was derived from audited
financial statements. In the opinion of management, these financial statements
include all adjustments, all of which are normal and recurring in nature,
necessary to present fairly the financial position, results of operations and
cash flows of the Company as of March 31, 1997 and for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The Company believes that the disclosures
included herein are adequate and provide a fair presentation of interim period
results. Interim financial statements are not necessarily indicative of
financial position or operating results for an entire year. These condensed
interim financial statements should be read in conjunction with the audited
financial statements and the notes thereto for the fiscal year ended June 30,
1996, included in the Company's Registration Statement on Form S-4, dated
January 31, 1997, filed with the Securities and Exchange Commission.



                                       7
<PAGE>   8



NOTE 2 - BUSINESS
         --------

The Company believes that it is a leading supplier to the home repair and
remodeling market in the United States. Primarily through its wholly owned
subsidiaries, Consumer Products, WOC, and TWI and its affiliate Barnett, the
Company markets and distributes a broad range of plumbing, electrical and
hardware products to over 56,000 customers in the United States, including
do-it-yourself warehouse home centers, home improvement centers, mass
merchandisers, hardware stores, lumberyards and to plumbing and electrical
repair and remodeling contractors, independent hardware stores and maintenance
managers.

NOTE 3 - INCOME TAXES
         ------------

The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS No. 109).

Waxman USA participates in the consolidated tax group of which Waxman Industries
is the common parent. Commencing July 1, 1994, Waxman USA began participating in
a new tax sharing agreement with Waxman Industries. Under this agreement, Waxman
USA's federal tax liability is equal to the lesser of (i) its federal tax
liability calculated on a stand-alone basis or (ii) Waxman Industries' federal
tax liability. The Company files separate income tax returns in certain states
based on the results of operations within the applicable states. At June 30,
1996, Waxman Industries had approximately $56.1 million of available domestic
net operating loss carryforwards which will expire between 2008 and 2011. The
benefit of these net operating loss carryforwards has been reduced 100% by a
valuation allowance. Waxman Industries will continue to evaluate the valuation
allowance and to the extent that Waxman Industries is able to recognize tax
benefits in the future, such recognition will favorably affect future results of
operations. Waxman Industries will utilize a portion of the net operating loss
carryforwards in connection with the Barnett Secondary Offering. See Note 6.
Waxman Industries also has alternative minimum tax carryforwards of
approximately $720,000 at June 30, 1996 which are available to reduce future
regular income taxes over an indefinite period.

As a result of the Barnett Public Offering (as defined below), Barnett is no
longer included in the consolidated tax group. Therefore, Waxman Industries'
remaining net operating loss carryforwards are not available to offset Barnett's
taxable income. The tax provision for the nine months ended March 31, 1997
represents a tax provision based on Waxman USA as a stand alone taxpayer,
Barnett's tax provision and a provision for state and foreign taxes. Deferred
taxes and amounts payable to Waxman USA's parent corporation, are included in
Advances to Waxman Industries in the accompanying condensed consolidated balance
sheets. Deferred tax assets of $500,000 related to Barnett are included in other
assets as of March 31, 1997 and June 30, 1996.

NOTE 4 - BARNETT
         -------

In April 1996, Barnett completed an initial public offering (the "Barnett Public
Offering") of its common stock (the "Barnett Common Stock"). In the offering,
7,207,200 shares, representing approximately 55.1% of the Barnett Common Stock,
were sold in the aggregate by Barnett and Waxman USA at an initial public
offering price per share of $14.00. Since the consummation of the Barnett Public
Offering, the cash flow generated by Barnett is no longer available to Waxman
USA other than the pro rata amounts, if any, distributed by Barnett in the form
of a common stock dividend. Waxman USA consolidates Barnett's financial results
and records a charge on its statement of operations for the net income related
to the outside stockholders' common stock interest. See Subsequent Events, Note
6.



                                       8
<PAGE>   9



NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
         ----------------------------------

Cash payments during the nine months ended March 31, 1997 and 1996 included
income taxes of $6.9 million and $0.5 million and interest of $6.0 million and
$4.4 million, respectively. Waxman USA's cash flow, subject to certain
restrictions, are upstreamed to Waxman Industries to service interest payments
and administrative costs.

NOTE 6 - SUBSEQUENT EVENTS
         -----------------

SECONDARY OFFERING - BARNETT

On April 18, 1997, the Company and Barnett completed a secondary offering of
1,125,000 and 375,000 shares of Barnett Inc. common stock, respectively. The
underwriters' have been granted a 30 day over-allotment option to purchase an
additional 225,000 shares. Net proceeds from the offering amounted to $18.7
million for the Company and $6.2 million for Barnett, after the underwriters'
discount. As a result of the offering, the Company will own 7,337,000 shares, or
45.7 percent of Barnett and will begin to utilize the equity method to account
for its investment in Barnett.

SALE OF MADISON EQUIPMENT COMPANY

On April 24, 1997, the Company sold Madison Equipment Company ("Madison"), a
division of WOC, to AFC Cable Systems, Inc. for $2.0 million in cash. For the
nine months ended March 31, 1997, Madison's net sales and operating income
amounted to $5.0 million and $0.2 million, respectively, and net assets were
approximately $2.6 million.

These subsequent event transactions should result in a net gain of approximately
$13 million.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         -------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

A.   RESULTS OF OPERATIONS FOR THE NINE MONTHS AND THREE MONTHS ENDED
     MARCH 31, 1997 AND 1996

This Quarterly Report contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 including,
without limitation, statements regarding certain customer concentration issues
and the sufficiency of the Company's liquidity and sources of capital. Any
statements contained herein which are not historical facts or which contain the
words expect, believe or anticipate, or words of similar import shall be deemed
to be forward-looking statements. These forward-looking statements are subject
to certain risks, uncertainties and other factors which could cause actual
results to differ materially. Additional information regarding factors that
could potentially affect the Company or its financial results may be included in
the Company's filings with the Securities and Exchange Commission.

Waxman USA owns 49.9% of the common stock of and, together with its preferred
shares, a 54% economic interest in Barnett. Barnett's results are consolidated
with the Company's and the Company records a charge in its statement of
operations for the net income related to the outside stockholder's common stock
interest.

NET SALES
---------

Consolidated net sales for the nine months and third fiscal quarter ended March
31, 1997 amounted to $199.6 million and $65.6 million, as compared to $175.5
million and $58.5 million for the comparable periods last year, respectively.
The increases of 13.8% for the nine months and 12.1% for the 



                                       9
<PAGE>   10



quarter are primarily attributable to record sales for both periods by Barnett.

Barnett's net sales of $117.1 million and $40.8 million for the nine months and
quarter ended March 31, 1997 represent increases of 25.4% and 23.9% over the
comparable periods last year. The increases are primarily attributable to the
successful implementation of its growth strategies, including continued
expansion of its promotional flyer mailings, accelerated new product offerings
and investments in its infrastructure.

Net sales for the Company's wholly owned operations amounted to $82.5 million
and $24.9 million for the nine months and quarter ended March 31, 1997,
respectively, an increase of $0.4 million or 0.5% for the nine months and a
decrease of $0.8 million or 3% for the three months ended March 31, 1997. The
Company's Consumer Products' operation experienced net sales decreases of 5.4%
for the nine months and 7.6% for the quarter ended March 31, 1997. The reduction
was primarily the result of the discontinuance of the electrical products' line
and certain lower margin products in the fourth quarter of fiscal 1996 and the
loss of a customer due to its bankruptcy early in the first quarter of fiscal
1997. Excluding those items, Consumer Products' net sales would have increased
approximately 1% for the nine months. The Company's U.S. Lock and foreign
operations reported strong sales increases for both the nine month and quarter
ended March 31, 1997, which partially offset the reduction in net sales at
Consumer Products.

GROSS PROFIT
------------

For the nine months ended March 31, 1997, gross profit increased $14.5 million
or 26.0% to $70.0 million from $55.5 million for the comparable period last
year. Gross margins increased for the nine months ended March 31, 1997 improving
to 35.1% from 31.6% last year (34.0% before non-recurring adjustments). The
Company's wholly owned operations' gross margin improved to 36.4% for the
current nine month period as compared to 29.8% last year (30.8% before
non-recurring adjustments). There was a general improvement at nearly all of
the Company's operations.

Gross profit for the quarter ended March 31, 1997 amounted to $23.2 million, an
increase of $7.5 million or 47.6% over the $15.7 million in the comparable
period last year. The gross margin for the current year's third quarter was
35.4% as compared to 26.9% last year (34.0% before non-recurring adjustments).
The Company's wholly owned operations reported gross margin of 37.3% for the
three months ended March 31, 1997 as compared to 19.0% last year (35.2% before
non-recurring adjustments).

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------

Selling, general and administrative ("SG&A") expenses for the nine months ended
March 31, 1997 and 1996 amounted to $48.0 million or 24.0% of consolidated net
sales and $45.5 million or 25.9% of consolidated net sales, respectively. For
the Company's wholly owned operations, there was a general decrease of $3.4
million in SG&A expenses, which amounted to $22.5 million. The prior year
expense included $3.5 million related to non-recurring adjustments. As a percent
of net sales, SG&A expenses for the wholly owned operations amounted to 27.2%
and 31.5% for the nine months ended March 31, 1997 and 1996, respectively.
Barnett's SG&A expenses increased by $5.9 million to $25.5 million for the nine
months ended March 31, 1997, a 3.8% increase when expressed as a percentage of
net sales. Barnett's increase was attributable to the expansion of its telesales
operations which resulted in increased personnel expenses and also to increased
costs associated with establishing a same day shipping policy to benefit its
customers.

For the quarters ended March 31, 1997 and 1996, SG&A expenses amounted to $16.3
million and $17.4 million, or 24.8% and 29.7% of consolidated net sales,



                                       10
<PAGE>   11



respectively. SG&A expenses for the Company's wholly owned operations amounted
to $7.5 million, or 30.1% of net sales, for the quarter ended March 31, 1997 as
compared to $10.6 million, or 41.2% of net sales, for the same quarter last
year. Last year's operating expenses, before adjustment for $3.5 million
amounted to $7.8 million, or 30.4% of net sales. The increase in net sales,
coupled with the slight decrease in expenses at the Company's wholly owned
operations resulted in an overall improvement in the ratio of expenses to
consolidated net sales.

CORPORATE CHARGE
----------------

For the nine months ended March 31, 1997 and 1996, the corporate charge amounted
to $2.5 million or 1.2% and 1.4% of net sales, respectively. Corporate charge
for the third quarter of fiscal 1997 and 1996 was $.8 million, or 1.2% and 1.4%
of net sales, respectively. Corporate charges are allocations to the Company of
expenses that Waxman Industries incurs to support its corporate activities.
Since the Barnett Public Offering, Waxman Industries no longer allocates a
corporate charge to Barnett.

INTEREST EXPENSE
----------------

Interest expense for the nine months ended March 31, 1997 and 1996 amounted to
$5.6 million and $14.0 million, respectively. Interest expense amounted to $2.0
million for the third quarter of fiscal 1997 as compared to $4.5 million in the
comparable period last year. The reduction of interest is due mainly to the
repayment of indebtedness with the net proceeds from the April 1996 initial
public offering of Barnett. Average borrowings for the current year's nine month
period amounted to $71.0 million, with a weighted average interest rate of
10.3%, as compared to $144.7 million of debt with a weighted average interest
rate of 11.7% last year.

PROVISION FOR INCOME TAXES
--------------------------

The provision for income taxes for the nine months ended March 31, 1997 amounted
to $6.1 million and the benefit for income taxes for the same period in fiscal
1996 was $2.9 million. For the third quarter of fiscal 1997, the provision for
income taxes amounted to $2.2 million as compared to a benefit of $3.3 million
in the comparable period last year. For the fiscal 1997 nine months and quarter,
the provision for taxes primarily represents Barnett's tax provision and state
and foreign taxes of the Company's wholly owned operations. The difference
between the effective and statutory tax rates is primarily due to the domestic
losses not benefited and goodwill amortization.

With the completion of the Barnett public offering, Barnett is no longer
included in the consolidated tax return of the Company and is unable to benefit
from the Company's net operating loss carryforwards. In accordance with the
provisions of SFAS No. 109, the Company is unable to benefit its losses in the
current year.



                                       11
<PAGE>   12


MINORITY INTEREST IN CONSOLIDATED AFFILIATE
-------------------------------------------

The Company recorded a charge of $4.4 million and $1.6 million, respectively,
for the nine months and quarter ended March 31, 1997 for the 50.1% of Barnett's
net income associated with the outside stockholders' common stock interest.

REVERSAL OF ESTIMATED LOSS ON DISPOSAL
--------------------------------------

In the third quarter of fiscal 1996, the Company reversed an $11.0 million
estimated loss on the disposal of its Consumer Product division, which had been
recorded at June 30, 1995. The Company ceased its effort to sell Consumer
Products upon the consummation of the initial public offering of Barnett.

As part of its strategic review of Consumer Products, the Company also recorded
certain non-recurring and restructuring charges relating to the carrying value
of operating assets and liabilities. Such charge amounted to $7.7 million,
including $4.2 million in cost of sales and $3.5 million in operating expenses.
The charges included $2.0 million for the write down of inventory, $1.6 million
for certain accounts receivable balances, $2.0 million for costs in developing a
management information system, $0.5 million of abandoned product development
costs and $1.6 million for various liabilities.

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
-----------------------------------------

Effective July 1, 1995, the Company changed its method of accounting for the
cost of obtaining long term business. These costs represent the amount paid in
connection with a customer's commitment to purchase products from the Company
for a specified period. Prior to this change, the Company capitalized the
consideration paid to the new or existing customer (i) for the right to supply
such customer for a specified period and (ii) to purchase competitor's
merchandise that the customer has on hand when it changes suppliers, less the
salvage value received by the Company. These costs were then amortized over the
period deemed to be benefited. The Company's new policy is to amortize these
costs in the fiscal year incurred due to the uncertainty of today's competitive
retail environment. The cumulative effect of this change on prior years of $4.9
million, net of a tax benefit of $3.3 million, is reported as a separate charge
in the nine months ended March 31, 1996.

NET INCOME (LOSS)
-----------------

The Company's net income for the nine months and quarter ended March 31, 1997
amounted to $3.4 million and $0.4 million, respectively. This compares to a loss
of $6.8 million and $6.9 million in the corresponding prior year periods, before
the fiscal 1996 adjustments for a $11.0 million reversal of loss on the disposal
of Consumer Products and the $8.2 million cumulative effect of the change in
accounting in the nine months of fiscal 1996 discussed above.

B.  LIQUIDITY AND CAPITAL RESOURCES
    -------------------------------

At March 31, 1997, the Company had $7.1 million available under its credit
agreement with BankAmerica Business Credit, Inc. (the "Credit Agreement"). The
Credit Agreement, which expires in May 1999, contains certain covenants and
restrictions, including a material adverse effect clause and the requirement to
maintain cash collateral accounts. Accordingly, borrowings under the Credit
Agreement have been classified as a current liability. The Company was in
compliance with all loan covenants at March 31, 1997.

At March 31, 1997, the Company had working capital of $52.7 million and a
current ratio of 1.91 to 1.



                                       12
<PAGE>   13



The Company relies primarily on Consumer Products for cash flow because
Barnett's cash flow is no longer available to the Company since the completion
of the Barnett public offering. Consumer Products' customers include
do-it-yourself warehouse centers, home improvement centers, mass merchandisers,
hardware stores and lumberyards. Consumer Products may be adversely affected by
prolonged economic downturns or significant declines in consumer spending. There
can be no assurances that any such prolonged economic downturns or significant
declines in consumer spending would not have a material adverse impact on the
Consumer Products' business and its ability to generate cash flow. Furthermore,
Consumer Products' largest customer, Kmart and its subsidiary, Builders Square,
historically have accounted for approximately 42% to 44% of Consumer Products'
total net sales. Although, Consumer Products believes it will retain all of its
Kmart business, all large merchandisers review supply arrangements from time to
time and there can be no assurance that this relationship will continue or as to
the terms of any relationship that does continue. Furthermore, Kmart has stated
that it intends to sell its Builders Square business, which accounted for 24.8%,
24.7%, and 23.9% of Consumer Products' net sales in fiscal 1996, fiscal 1995 and
the nine months ended March 31, 1997. Kmart issued a press release in February
1997, stating that it was negotiating to sell the Builders Square business to
Home Base, a leading regional warehouse home center, which is not and has not
been a customer of Consumer Products. In April 1997, it was announced that the
Builders Square discussions with Home Base were terminated. Although, Kmart
recently completed a review of its and Builders Square's vendor relationships,
it is likely that any purchaser of Builders Square would conduct a similar
review. In the event Consumer Products were to either lose Kmart or Builders
Square as a customer or Kmart or Builders Square were to significantly curtail
its purchases from Consumer Products, there would be material short-term adverse
effects until the Company could modify Consumer Products' cost structure to be
more in line with its reduced revenue base.

The Company does not have any commitments to make substantial capital
expenditures.

In furtherance of the Company's ongoing efforts to increase its liquidity and
improve its capital structure, in January 1997 Waxman USA completed a private   
exchange offer pursuant to which it exchanged an aggregate of $4.8 million of
Waxman USA's 11 1/8% Senior Notes due 2001 for a like amount of Waxman 13 3/4%
Senior Subordinated Notes due June 1999. As a result, there now remains 
outstanding $.9 million of Senior Subordinated Notes. The Company is continuing
to review other business strategies for reducing its leverage.

In April 1997, the Company completed a secondary offering of 1,125,000 shares of
Barnett common stock owned by Waxman USA at $17.50 per share and received $18.7
million of net proceeds. The underwriters have been granted a 30 day option to
acquire an additional 175,000 shares owned by Waxman USA, which could result in
an additional $2.9 million in net proceeds to the Company. The Company also sold
one of its smaller divisions for $2.0 million. Pending the application of the
net proceeds of these transactions to reinvestment in the Company's businesses
or the permanent repayment of debt, the proceeds from these transactions have
temporarily been used to pay down all of the line of credit with BankAmerica,
with the excess being invested in short term liquid investments.

The Company believes that the funds generated from operations, along with the
funds available under the Credit Agreement (and any refinancing thereof), will
be sufficient to satisfy the Company's liquidity requirements until December 1,
1999 (the date that the cash interest becomes payable by Waxman Industries under
its 12 3/4% Deferred Coupon Notes due 2004). The Company does not anticipate
that available cash flow from operations will be sufficient to pay cash interest
on the Deferred Coupon Notes commencing in December 1999. Therefore, the Company
expects to repay or refinance such debt in or prior to December 1999.



                                       13
<PAGE>   14



DISCUSSION OF CASH FLOWS
------------------------

Net cash used by the Company's operations was $2.8 million for the nine months
ended March 31, 1997, due mainly to increases in inventories and accounts
receivable and a decrease in accruals (principally accrued income tax and
accrued interest payments). Cash flow used for investments totaled $6.5 million,
primarily relating to Barnett's operations, including capital expenditures for
improved management information systems, the buy-out of an operating lease
incurred in prior years and expansion and/or relocation of several of Barnett's
distribution centers to accommodate new product offerings. Cash flow from
financing totaled $9.2 million. Net debt borrowings during the nine months ended
March 31, 1997 under the Credit Agreement totaled $11.1 million.



                                       14
<PAGE>   15


PART II. OTHER INFORMATION
         -----------------

ITEM 5.  OTHER INFORMATION
         -----------------

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

         a) See Exhibit 27.

         b) Form 8-K

              None

All other items in Part II are either inapplicable to the Company during the
quarter ended March 31, 1997 or the answer is negative or a response has been
previously reported and an additional report of the information need not be
made, pursuant to the instructions to Part II.

                                   SIGNATURES
                                   ----------

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

                                               WAXMAN USA INC.
                                               ---------------
                                               REGISTRANT



DATE:    MAY 5, 1997                     BY: /S/ MARK W. WESTER
                                             ----------------------------
                                               MARK W. WESTER
                                               VICE PRESIDENT-FINANCE
                                               (PRINCIPAL FINANCIAL AND
                                               ACCOUNTING OFFICER)


                                       15
<PAGE>   16








                                  EXHIBIT INDEX
                                  -------------

EXHIBIT                                                       PAPER (P) OR
-------                                                       ------------
NUMBER            DESCRIPTION                                 ELECTRONIC (E)
------            -----------                                 --------------

(27)              Financial Data Schedule
                  (submitted to the Securities
                  and Exchange Commission in
                  Electronic Format)                               E



                                       16