================================================================================

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 1O-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 27, 1998

                                       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 000-21517

                          XOMED SURGICAL PRODUCTS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                               06-1393528
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

6743 SOUTHPOINT DRIVE N., JACKSONVILLE, FL                        32216-0980
------------------------------------------                        ----------
(Address of principal executive offices)                          (Zip Code)

                                 (904) 296-9600
              ----------------------------------------------------
              (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 90 days.

Yes [X] No [ ]

      APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock as of the latest
practicable date.

      Common stock, $.01 par value - 8,085,374 shares as of August 4, 1998

================================================================================

<PAGE>

                XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES

                                    INDEX

                                                                     PAGE NUMBER
                                                                     -----------
PART I. FINANCIAL INFORMATION

Item 1.           Condensed Consolidated Financial Statements
                     (Unaudited)

                  Condensed Consolidated Balance Sheets
                     June 27, 1998 and December 31, 1997.............     2

                  Condensed Consolidated Statements Of Operations
                     Three Months Ended  June 27, 1998
                     and June 28, 1997, and Six Months Ended
                     June 27, 1998 and June 28, 1997.................     3

                  Condensed Consolidated Statements Of Cash Flows
                     Six Months Ended June 27, 1998 and June 28, 1997     4

                  Notes To Condensed Consolidated Financial Statements
                     June 27, 1998...................................     5

Item 2.           Management's Discussion and Analysis of Financial
                     Condition and Results of Operations.............     7

PART II. OTHER INFORMATION

Item 1.           Legal Proceedings..................................     10

Item 4            Submission of Matters to a Vote of Security Holders     10

Item 6.           Exhibits and Reports on Form 8-K...................     10

SIGNATURES                                                                11

                                       1

<PAGE>

<TABLE>
<CAPTION>
                              PART I. FINANCIAL INFORMATION

ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                                       JUNE 27,         DECEMBER 31,
                                                         1998               1997
                                                     -----------        ------------
                                                     (unaudited)
<S>                                                  <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents .................        $   5,039         $   1,712
   Accounts receivable, less allowance .......           14,939            13,277
   Other receivables .........................              625               620
   Inventories ...............................           17,228            16,238
   Prepaid expenses ..........................              456             1,083
   Deferred income taxes .....................            1,404             1,404
                                                      ---------         ---------
Total current assets .........................           39,691            34,334

Notes receivable from officers ...............              826               724
Property, plant and equipment, net ...........           16,575            15,403
Cost in excess of net assets acquired, net ...           41,402            42,399
Other assets .................................            2,895             2,867
Deferred income taxes ........................             --                --
                                                      ---------         ---------
Total assets .................................        $ 101,389         $  95,727
                                                      =========         =========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable ..........................        $   4,759         $   3,493
   Accrued expenses ..........................            3,267             2,403
   Accrued payroll & commissions .............            2,166             2,332
                                                      ---------         ---------
Total current liabilities ....................           10,192             8,228

Deferred Credits .............................              670               990
Redeemable Preferred Stock - -0- shares issued
    and outstanding ..........................             --                --
Shareholders' equity:
   Common stock, voting, $.01 par value;
   30,000,000 shares authorized, 7,345,624
   shares issued and outstanding .............               73                73
   Retained earnings (deficit) ...............              421            (3,459)
   Additional paid-in capital ................           90,364            90,264
   Cumulative translation adjustments ........             (106)              (88)
   Unearned compensation .....................             (225)             (281)
                                                      ---------         ---------
   Total shareholders' equity ................           90,527            86,509
                                                      ---------         ---------
Total liabilities and shareholders' equity ...        $ 101,389         $  95,727
                                                      =========         =========
</TABLE>

Note: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.

                                       2

<PAGE>

<TABLE>
<CAPTION>
                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                               THREE MONTHS ENDED                 SIX MONTHS ENDED
                                            ------------------------         ------------------------
                                             JUNE 27,       JUNE 28,         JUNE 27,        JUNE 28,
                                              1998            1997             1998            1997
                                            ---------       --------         --------        --------
<S>                                         <C>             <C>              <C>             <C>
Sales, net .........................        $ 22,868        $ 19,203         $ 43,550        $ 37,007
Cost of sales ......................           8,929           7,568           16,992          14,728
                                            --------        --------         --------        --------

Gross margin .......................          13,939          11,635           26,558          22,279

Operating expenses:
Selling, general and administrative            8,717           7,792           16,802          15,045
Research and development ...........           1,166             997            2,336           2,003
Amortization of intangibles ........             584             589            1,168           1,204
                                            --------        --------         --------        --------

Total operating expenses ...........          10,467           9,378           20,306          18,252
                                            --------        --------         --------        --------

Operating income ...................           3,472           2,257            6,252           4,027

Interest income (expense), net .....              62             (53)              92            (107)
Other income, net ..................              28               8               68             100
                                            --------        --------         --------        --------

Income before income tax expense ...           3,562           2,212            6,412           4,020
Income tax expense .................           1,407             885            2,532           1,606
                                            --------        --------         --------        --------

Net income .........................        $  2,155        $  1,327         $  3,880        $  2,414
                                            ========        ========         ========        ========
Per share:
Net income - basic .................        $   0.29        $   0.18         $   0.53        $   0.33
                                            ========        ========         ========        ========
Net income - diluted ...............        $   0.28        $   0.18         $   0.51        $   0.32
                                            ========        ========         ========        ========

Weighted average common shares
   outstanding - basic .............           7,343           7,334            7,342           7,312
                                            ========        ========         ========        ========

Weighted average common shares
   outstanding - diluted ...........           7,673           7,477            7,653           7,458
                                            ========        ========         ========        ========
</TABLE>

See notes to condensed consolidated financial statements

                                       3

<PAGE>

<TABLE>
<CAPTION>
                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

                                                              SIX MONTHS ENDED
                                                         -------------------------
                                                          JUNE 27,        JUNE 28,
                                                           1998             1997
                                                         --------         --------
<S>                                                      <C>              <C>
OPERATING ACTIVITIES
Net cash provided by operating activities .......        $  5,604         $  1,087

INVESTING ACTIVITIES
Purchases of property and equipment .............          (2,377)          (1,302)
Proceeds from certificates of deposit ...........            --                140
Purchase of other assets ........................            --               --
Purchase of business (including cash received) ..            --               --
                                                         --------         --------
Net cash used in investing activities ...........          (2,377)          (1,162)

FINANCING ACTIVITIES
Proceeds from revolving line of credit ..........            --             10,097
Payments on revolving line of credit ............            --            (10,745)
Payments on term notes payable and capital lease
   obligations ..................................            --                (43)
Proceeds from exercise of stock option ..........             100              638
Proceeds from issuance of stock .................            --               --
                                                         --------         --------
Net cash (used in) provided by financing
   activities ...................................             100              (53)
                                                         --------         --------
Net increase (decrease) in cash and cash
   equivalents ..................................           3,327             (128)

Cash and cash equivalents at beginning of period            1,712              629
                                                         --------         --------
Cash and cash equivalents at end of period ......        $  5,039         $    501
                                                         ========         ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid during the period for:
     Interest ...................................        $     45         $    119
                                                         ========         ========
     Taxes ......................................        $  2,320         $    572
                                                         ========         ========
</TABLE>

See notes to condensed consolidated financial statements.

                                       4

<PAGE>

                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      (in thousands, except per share data)
                                   (Unaudited)

NOTE A - BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
   have been prepared in accordance with generally accepted accounting
   principles for interim financial information and with the instructions to
   Form 10-Q and Article 10 of Regulation S-X and should be read in conjunction
   with the audited financial statements for the years ended December 31, 1997,
   1996, and 1995 of Xomed Surgical Products, Inc. (the Company) in the
   Company's 1997 Annual Report on Form 10-K. Accordingly, they do not include
   all of the information and footnotes required by generally accepted
   accounting principles for complete financial statements. In the opinion of
   management, all adjustments (consisting of normal recurring accruals)
   considered necessary for a fair presentation have been included. Operating
   results for the six-month period ended June 27, 1998 are not necessarily
   indicative of the results that may be expected for the year ending December
   31, 1998.

NOTE B - INVENTORIES

   The components of inventory consist of the following:

                                           JUNE 27,     DECEMBER 31,
                                             1998           1997
                                           --------     ------------

               Raw Materials               $ 5,422        $ 5,818
               Work-In-Process               2,085          1,447
               Finished Products             9,721          8,973
                                           -------        -------
                                           $17,228        $16,238
                                           =======        =======

NOTE C - EARNINGS PER SHARE

   The following table sets forth the computation of shares for purposes of the
earnings per share calculation:

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED          SIX MONTHS ENDED
                                             --------------------      ---------------------
                                             JUNE 27,    JUNE 28,      JUNE 27,     JUNE 28,
                                               1998        1997          1998         1997
                                             --------    --------      --------     --------
<S>                                          <C>         <C>           <C>          <C>
Weighted average shares outstanding ..        7,343        7,334        7,342        7,312
Net effect of dilutive stock options -
based on the treasury stock method ...          330          143          311          145
                                              -----        -----        -----        -----

Totals ...............................        7,673        7,477        7,653        7,457
                                              =====        =====        =====        =====
</TABLE>

                                       5

<PAGE>

                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                      (in thousands, except per share data)
                                   (Unaudited)

NOTE D - COMPREHENSIVE INCOME

      The Financial Accounting Standards Board has issued Statement No. 130,
"Reporting Comprehensive Income" effective for fiscal years beginning after
December 15, 1997. The standard requires companies to report another measure of
operations called Comprehensive Income. This measure, in addition to "Net
Income," includes as income or loss, the following items, which if present are
included in the equity section of the Balance Sheet. 1) unrealized gains and
losses on certain investments in debt and equity securities; 2) foreign currency
translation; and 3) minimum pension liability adjustments. The following table
depicts comprehensive income.

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED            SIX MONTHS ENDED
                                   ----------------------       -----------------------
                                   JUNE 27,      JUNE 28,       JUNE 27,       JUNE 28,
                                     1998          1997           1998           1997
                                   --------      --------       --------       --------
<S>                                <C>           <C>            <C>            <C>
Net Income .................        $2,155        $1,327        $ 3,880         $2,414
Foreign currency translation
   adjustment ..............            36          --              (18)          --
                                    ------        ------        -------         ------
Comprehensive income .......        $2,191        $1,327        $ 3,862         $2,414
                                    ======        ======        =======         ======
</TABLE>

NOTE E - SUBSEQUENT EVENT

      On July 20, 1998 the Company completed its secondary offering of 1,500,000
shares of common stock at an offering price of $30.50 per share. Of these
shares, 615,500 were sold by the Company and 884,500 were sold by certain
shareholders of the Company. Additionally, on July 29, 1998 the underwriters
exercised their overallotment option and the Company sold an additional 112,500
shares and the selling shareholders sold an additional 112,500. Gross proceeds
including the overallotment option to the Company were $20,930,000 which will be
used for future business and product development expansion.

                                       6

<PAGE>

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

THIS FORM 10-Q CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING RISK ASSOCIATED WITH THE EAR, NOSE AND THROAT ("ENT")
SURGICAL PRODUCTS INDUSTRY AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE
FILINGS OF XOMED SURGICAL PRODUCTS, INC. (THE COMPANY) WITH THE SECURITIES AND
EXCHANGE COMMISSION.

RESULTS OF OPERATIONS

      SALES BY MARKET. The Company derives sales from various markets within the
ENT industry. Sinus and rhinology, head and neck and otology are the three core
ENT markets in which the Company operates. In addition to products for these
markets, the Company has other product offerings, including lines of ophthalmic,
orthopaedic and other products. The following table summarizes the Company's
worldwide product line sales during the periods indicated (in thousands).

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED                       SIX MONTHS ENDED
                              -----------------------------------     -------------------------------
PRODUCT LINE                  JUNE 27, 1998         JUNE 28, 1997     JUNE 27, 1998     JUNE 28, 1997
------------                  -------------         -------------     -------------     -------------
<S>                           <C>                   <C>               <C>               <C>
Sinus & Rhinology ......         $ 9,818               $ 6,944            $18,299          $13,214
Head & Neck ............           5,242                 4,412              9,794            8,031
Otology ................           3,962                 3,999              8,094            7,861
                                 -------               -------            -------          -------
   Total Core ENT
     Business ..........          19,022                15,355             36,187           29,106
Ophthalmic & Other .....           3,846                 3,848              7,363            7,901
                                 -------               -------            -------          -------
   Total Company .......         $22,868               $19,203            $43,550          $37,007
                                 =======               =======            =======          =======
</TABLE>


<TABLE>
<CAPTION>

                                      THREE MONTHS ENDED                       SIX MONTHS ENDED
                              -----------------------------------     ------------------------------------
GEOGRAPHIC                    JUNE 27, 1998         JUNE 28, 1997     JUNE 27, 1998          JUNE 28, 1997
----------                    -------------         -------------     -------------          -------------
<S>                           <C>                   <C>               <C>                    <C>
Domestic .........               $16,050               $13,245            $30,705               $25,556
International ....                 6,818                 5,958             12,845                11,451
                                 -------               -------            -------               -------
                                 $22,868               $19,203            $43,550               $37,007
                                 =======               =======            =======               =======
</TABLE>

      NET SALES. For the three months ended June 27, 1998, net sales increased
19.1% to $22.9 million from $19.2 million in the comparable quarter of 1997. Net
sales increased 17.7% to $43.6 million in the first six months of 1998 from
$37.0 million in the comparable period in 1997. In the core ENT business of
sinus and rhinology, head and neck and otology, sales increased 23.9% and 24.3%
for the three and six-month periods ended June 27, 1998, respectively, compared
to the 1997 comparable periods. Domestic core ENT sales increased by 25.4% to
$13.3 million and by 26.4% to $25.5 million for the three and six months ended
June 27, 1998, respectively, over the comparable periods in 1997. International
core ENT sales increased by 20.5% to $5.7 million for the three-month period and
by 19.6% to $10.7 million for the six-month period ended June 27, 1998 as
compared to the same periods in 1997. The increase in core ENT business sales
was primarily the result of sales generated from several new products introduced
principally over the last 18 months, including within sinus and rhinology, the
XPS tissue removal system and within head and neck, the NIM XL2 nerve monitoring
system, the Company's Powerforma surgical drill system and several new cutter
blades. The increase in domestic core ENT sales was led by the Company's sinus
and rhinology product line, which increased by 46.5% to $6.6 million for the
three months and by 46.1% to $12.5 million for the six months ended June 27,
1998. Total International sales increased by 14.4% and 12.2% for the three and
six months ended June 27, 1998. Excluding the unfavorable effects of foreign
currency comparisons on foreign currency translations international sales
increased by 17.6% for the three months and by 16.0% for the six months ended
June 27, 1998. Strong sales increases were reported in Japan, the U.K., Germany
and Italy, as well as several other European countries, in both the three-month
and six-month periods ended June 27, 1998. International sales were negatively
impacted by a 44.6% and 41.9% decrease in the Asia/Pacific region (excluding
Japan) for the three months and six months ended June 27, 1998, respectively, as
compared to the same periods in 1997. International sales accounted for 29.8% of
the Company's total sales for the three months ended June 27, 1998 and 29.5% of
total sales for the six months ended on the same date. Sales in the ophthalmic
and other category were flat in the quarter compared to the prior comparable
quarter ended June 28, 1997 and decreased 6.8% for the six months ended June 27,
1998 as compared to the 1997 comparable period primarily due to decreases of
approximately $270,000 and $770,000, respectively, in sales

                                       7

<PAGE>

of orthopaedic instruments in 1998 over the prior comparable periods, which
included a large initial stocking order to an OEM distributor. Sales of these
orthopaedic instruments are expected to resume during the second half of 1998.

      GROSS MARGIN. Gross margin as a percent of sales was 61.0% for both the
three and six-month periods ended June 27, 1998 compared to 60.6% and 60.2%,
respectively, in the 1997 comparable periods. The increase in the gross margin
percentage relates partially to a higher mix of the Company's higher margin core
products during the current periods and partially to lower per unit
manufacturing cost due to a higher volume of production.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 11.9% and 11.7% to $8.7 million and $16.8
million in the three-month and six-month periods ended June 27, 1998,
respectively, from the comparable periods in 1997. As a percent of sales
selling, general and administrative expenses were 38.1% and 38.6% in the three
and six month periods ended June 27, 1998, respectively, as compared to 40.6%
and 40.7%, respectively, in the 1997 comparable periods.

      RESEARCH AND DEVELOPMENT. Research and development expenses increased
17.0% and 16.6% to $1.2 million and $2.3 million in the three-month and
six-month periods ended June 27, 1998, respectively, from the comparable periods
in 1997. As a percent of sales research and development expenses for 1998 were
5.1% and 5.4%, respectively, as compared to 5.2% and 5.4% in the 1997 comparable
periods.

      INTEREST AND OTHER. The Company had net interest income of $62,000 and
$92,000 in the three months and six months ended June 27, 1998, respectively.
This compares favorably to net interest expense of $53,000 and $107,000 in the
comparable 1997 periods. This favorability relates to having an average invested
amount during the first six months of 1998 as compared to an average borrowed
amount during the 1997 period. Other income was $28,000 for the three months and
$68,000 for the six months ended June 27, 1998. This compares to other income of
$8,000 and $100,000 in the comparable periods in 1997.

      INCOME TAXES. The Company's effective tax rate was 39.5% for the first six
months of 1998 compared to an effective tax rate of 40.0% for the comparable
period of 1997.

LIQUIDITY AND CAPITAL RESOURCES

      The Company historically has financed its operations (including capital
expenditures) through cash flows from operations. Since the Company's
acquisition of Xomed, Inc. in April 1994, which was financed in part by the
incurrence of $45.9 million of debt under the Company's secured term loan
facility (the "Term Loan") and its secured revolving credit facility (the
"Revolving Credit Facility"), all cash flow generated from operations had been
applied to repay the outstanding principal on the Term Loan or the Revolving
Credit Facility. In October 1996 the Company completed its initial public stock
offering, the proceeds of which were used to repay the entire Term Loan and the
majority of the Revolving Credit Facility. As of June 27, 1998, the Company has
no outstanding long-term debt as compared to a balance of $2.5 million in the
comparable prior period.

      During the six months ended June 27, 1998, the Company generated cash of
$5.6 million in operating activities as compared with $1.1 million cash
generated from operating activities in the prior comparable period. In the first
six months of 1998, the Company had a net use of cash of $449,000 within
inventory, accounts receivable and accounts payable as compared to a net use of
cash within these components of operations of $3.2 million in the comparable
1997 period, which included a use of cash related to payments of accounts
payable related to the Company's IPO completed in the fourth quarter of 1996.
The use of cash within the working capital accounts, except for the use related
to the IPO, stems primarily from the Company's growth in sales and related
increase in accounts receivable and inventories offset somewhat by cash provided
by an increase in accounts payable.

      Cash used in investing activities was $2.4 million in the first six months
of 1998 as compared to cash used in investing activities of $1.2 million in the
prior comparable period. Cash used in investing activities is expected to
increase as the Company plans to spend approximately $5 million on its
Jacksonville, Florida headquarters expansion in 1998. Cash provided by financing
activities totaled $100,000 during the first six months of 1998. Those funds
were provided entirely from the exercise of stock options. During the comparable
period in 1997, cash used in financing activities was $53,000. This amount was
the net result of using cash to reduce long-term debt by approximately $700,000
offset by $638,000 provided by the exercise of stock options.

      Based on the Company's ability to generate cash from operations and with
the availability of borrowing under its Amended and Restated Credit Agreement,
which allows borrowings up to $25 million, the Company believes it will be able
to finance its working capital needs for at least the next 24 months. Also see
Footnote E, in Notes to Condensed Consolidated Financial Statements on page 6 of
this Form 10Q.

                                       8

<PAGE>

European Union Conversion to a Common Currency

     Eleven European Countries have entered into agreements that include a
process of converting to a common currency, the "euro". On January 1, 1999 the
eleven European Countries will establish a fixed conversion rate for
transactions between their existing currencies ("legacy currencies"). After this
date, for a three year transition period the legacy currencies remain legal
tender. Beginning January 1, 2002 the participating countries will issue
euro-demoninated bills for use in transactions and will withdraw all bills
denominated in the legacy currencies by July 1, 2002. The Company has two
distribution sites that operate in these countries (France and Germany). Sales
from these sites totaled $2.9 million or 6.6% of consolidated sales for the six
months ended June 27, 1998. The Company has begun an internal analysis to
address euro related issues and plan for the conversion, including review of
information systems, current contracts, foreign currency hedging activities and
physical conversion procedures. Based on existing information the Company does
not believe that the impact to the Company of the conversion to a common
currency by these eleven countries will be material to its results of
operations, financial position on cash flows.

                                       9

<PAGE>

                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

      The Company is currently involved in certain legal proceedings incidental
to the normal conduct of its business. The Company does not believe that any
liabilities relating to the legal proceedings to which it is a party are likely
to be, individually or in the aggregate, material to its consolidated financial
position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

      The Company held its 1997 annual meeting of stockholders on May 21, 1998.
At the meeting all of the Company's directors were elected to serve until the
next annual meeting of stockholders and until their respective successors are
elected and so qualify. The vote for each nominee for director was as follows:

     NAME OF DIRECTOR                VOTES FOR            ABSTAIN
     -----------------------         ---------            -------
     James T. Treace                 6,969,950              250
     Richard B. Emmitt               6,969,950              250
     William R. Miller               6,969,950              250
     Rodman W. Moorhead, III         6,969,950              250
     James E. Thomas                 6,969,950              250
     Elizabeth H. Weatherman         6,969,950              250

      The stockholders also voted on the following proposals:

/bullet/ Amendments to the Company's Stock Option Plan (the "Plan") to increase
         the number of shares of the Company's Common Stock covered by the Plan
         by 500,000 shares, from 1,078,000 to 1,578,000 shares and to increase
         the number of shares that may be granted to any single optionee during
         any calendar year from 60,000 to 150,000. The vote on the amendment was
         as follows: 6,102,396 shares "for," 863,300 shares "against," and 1,232
         shares "abstain."

/bullet/ To ratify the appointment of Ernst & Young LLP as the Company's
         independent auditors for fiscal 1998. The vote on such appointment was
         as follows: 6,969,967 shares "for," 1 share "against" and 232 shares
         "abstain."

/bullet  To approve amendments to the Company's Second Restated Certificate of
         Incorporation to eliminate the Company's (1) Non-Voting Common Stock,
         (2) Series A Convertible Preferred Stock, (3) Series B Convertible
         Preferred Stock and (4) Series C Redeemable Preferred Stock from the
         Company's authorized capital stock. This proposal was approved with
         6,786,680 shares "for", 1100 shares "against," and 232 shares
         "abstain."

Item 6. Exhibits and Reports on Form 8-K

(a) The following exhibits are included herein:

         *10.19 Term Sheet related to a License and Distribution Agreement
                between Xomed Surgical Products, Inc. and ArthroCare
                Corporation.

          27    1998 Financial Data Schedule

          27.1  1997 Financial Data Schedule

*Confidentiality treatment requested.

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<PAGE>

                 XOMED SURGICAL PRODUCTS, INC. AND SUBSIDIARIES

Signatures

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

                                       XOMED SURGICAL PRODUCTS, INC.
                                       (Registrant)

Date 8-11-98                           /s/ JAMES T. TREACE
                                       ----------------------------------------
                                           James T. Treace, Chairman, President
                                           and Chief Executive Officer
                                           (duly authorized officer)

Date 8-11-98                           /s/ THOMAS E. TIMBIE
                                       ----------------------------------------
                                           Thomas E. Timbie, Vice President and
                                           Chief Financial Officer
                                           (principal financial officer)

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