
<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                                   FORM 10-Q


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

         FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       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 1-10177



                        WINDMERE-DURABLE HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             FLORIDA                                           59-1028301
(STATE OR OTHER JURISDICTION OF                            (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NUMBER)

5980 MIAMI LAKES DRIVE, MIAMI LAKES, FLORIDA                       33014
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                       (ZIP CODE)

                                 (305) 362-2611
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

    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 report(s), and (2) has been subject to
such filing requirement for the past 90 days.
                                                               Yes [X]  No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

                                                NUMBER OF SHARES OUTSTANDING
        CLASS                                         ON OCTOBER 28, 1999
        -----                                         -------------------
 Common Stock, $.10 Par Value                             22,592,016






<PAGE>   2



                        WINDMERE-DURABLE HOLDINGS, INC.

                                     INDEX

<TABLE>
<CAPTION>

<S>                                                                                                          <C>
PART I. FINANCIAL INFORMATION

         ITEM 1.  Consolidated Statements of Operations for the
                           Three Months Ended September 30, 1999 and 1998............................           3

                  Consolidated Statements of Operations for the
                           Nine Months Ended September 30, 1999 and 1998.............................           4

                  Consolidated Balance Sheets as of
                           September 30, 1999, and December 31, 1998.................................         5-6

                  Consolidated Statements of Cash Flows
                           for the Nine Months Ended September 30, 1999 and 1998.....................           7

                  Notes to Consolidated Financial Statements.........................................        8-14

         ITEM 2.  Management's Discussion and Analysis of
                           Financial Condition and Results of Operations.............................       15-22
         ITEM 3. Quantitative and Qualitative Disclosures About Market Risk..........................          23

PART II. OTHER INFORMATION

         ITEM 1.  Legal Proceedings .................................................................          24

         ITEM 6.  Exhibits and Reports on Form 8-K...................................................          24

SIGNATURES...........................................................................................          25

</TABLE>


                                       2
<PAGE>   3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        WINDMERE-DURABLE HOLDINGS, INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                  (IN THOUSANDS EXCEPT PER SHARE INFORMATION)



<TABLE>
<CAPTION>

                                                                THREE MONTHS ENDED SEPTEMBER 30,
                                           ----------------------------------------------------------------
                                                       1999                            1998
                                         ------------------------------    --------------------------------
<S>                                         <C>                   <C>        <C>                    <C>

Sales and Other Revenues .............      $ 204,229             100.0%     $ 160,453              100.0%
Cost of Goods Sold ...................        139,137              68.1        105,439               65.7
                                            ---------             -----      ---------              -----
     Gross Profit ....................         65,092              31.9         55,014               34.3
Selling, General and
     Administrative Expenses .........         39,853              19.6         39,026               24.3
                                            ---------             -----      ---------              -----
     Operating Profit ................         25,239              12.3         15,988               10.0
Other (Income) Expense
     Interest Expense ................          7,212               3.5          8,104                5.1
     Interest and Other Income .......           (580)              (.3)          (464)               (.3)
       Gain on sale of equity interest             --                --        (42,651)             (26.6)
                                            ---------             -----      ---------              -----
                                                6,632               3.2       (35,011)              (21.8)
                                            ---------             -----      ---------              -----
Earnings before Equity
     in Net Earnings of Joint
     Ventures and Income Taxes .......         18,607               9.1         50,999               31.8
Equity in Net Earnings
     of Joint Ventures ...............             --                --            362                 .2
                                            ---------             -----      ---------              -----
Earnings Before
     Income Taxes ....................         18,607               9.1         51,361               32.0
Provision for
     Income Taxes ....................          4,634               2.3         16,401               10.2
                                            =========             =====      =========              =====
Net Earnings .........................      $  13,973               6.8%     $  34,960               21.8%
                                            =========             =====      =========              =====
Earnings Per Share - basic ...........      $     .62                           $ 1.65
                                            =========                        =========
Earnings Per Share - diluted .........      $     .59                           $ 1.58
                                            =========                       ==========
</TABLE>







The accompanying notes are an integral part of these statements.




                                       3
<PAGE>   4


                        WINDMERE-DURABLE HOLDINGS, INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                  (IN THOUSANDS EXCEPT PER SHARE INFORMATION)




<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED SEPTEMBER 30,
                                            ---------------------------------------------------------------
                                                          1999                            1998
                                            -----------------------------    -------------------------------
<S>                                         <C>                    <C>        <C>                    <C>
Sales and Other Revenues .............      $ 472,250              100.0%     $ 278,415              100.0%
Cost of Goods Sold ...................        330,493               70.0        202,168               72.6
                                              -------               ----        -------               ----
     Gross Profit ....................        141,757               30.0         76,247               27.4
Selling, General and
     Administrative Expenses .........        116,008               24.6         63,558               22.8
     Repositioning charge ............             --                 --          9,914                3.6
                                              -------               ----        -------               ----
     Operating Profit ................         25,749                5.4          2,775                1.0

Other (Income) Expense
     Interest Expense ................         19,947                4.2         10,575                3.8
     Interest and Other Income .......         (1,604)               (.3)        (2,662)               (.9)
       Gain on sale of equity interest             --                 --        (42,651)             (15.3)
                                              -------               ----        -------               ----
                                               18,343                3.9        (34,738)             (12.4)
                                              -------               ----        -------               ----
Earnings before Equity
     in Net Earnings (Loss) of Joint
     Ventures and Income Taxes .......          7,406                1.5         37,513               13.4
Equity in Net Earnings (Loss)
     of Joint Ventures ...............        (12,894)              (2.7)         1,558                 .6
                                              -------               ----        -------               ----
Earnings (Loss) Before
     Income Taxes ....................         (5,488)              (1.2)        39,071               14.0
Provision (Benefit) for
     Income Taxes ....................         (2,366)               (.5)        10,838                3.9
                                              -------               ----        -------               ----
Net Earnings (Loss) ..................      $  (3,122)               (.7)%    $  28,233               10.1%
                                              =======               ====        =======               ====

Earnings (Loss) Per Share -
     basic ...........................      $    (.14)                        $    1.45
                                              =======                           =======

Earnings (Loss) Per Share -
     diluted .........................      $    (.14)                        $    1.34
                                              =======                           =======

</TABLE>





The accompanying notes are an integral part of these statements.



                                       4
<PAGE>   5



                        WINDMERE-DURABLE HOLDINGS, INC.
                    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                 (IN THOUSANDS)




<TABLE>
<CAPTION>
                                                                            9/30/99        12/31/98
                                                                            -------        --------
<S>                                                                          <C>           <C>
ASSETS

CURRENT ASSETS

Cash & Cash Equivalents ...............................................      $  5,529      $ 20,415
Accounts and Other Receivables,
     less allowances of $7,970 and
     $7,367, respectively .............................................       204,016       165,837
Receivables from Affiliates (Note 2) ..................................         3,244         5,589
Inventories
     Raw Materials ....................................................        10,107        12,648
     Work-in-process ..................................................        22,422        28,727
     Finished Goods ...................................................       152,951       124,090
                                                                             --------      --------
         Total Inventories ............................................       185,480       165,465
Prepaid Expenses ......................................................         9,895        16,709
Refundable Income Taxes ...............................................         7,927         6,555
Future Income Tax Benefits ............................................        23,503        18,277
                                                                             --------      --------
     Total Current Assets .............................................       439,594       398,847

INVESTMENTS IN JOINT VENTURES
     (NOTE 2) .........................................................         2,763        15,708

PROPERTY, PLANT & EQUIPMENT -
     AT COST, less accumulated
     depreciation of $68,697 and
     $59,524, respectively ............................................        77,866        76,077
Notes Receivable from Affiliate (Note 7)...............................            --         7,891
OTHER ASSETS ..........................................................       251,191       244,214
                                                                             --------      --------

TOTAL ASSETS  ........................................................       $771,414      $742,737
                                                                             ========      ========

</TABLE>





                                       5
<PAGE>   6


                        WINDMERE-DURABLE HOLDINGS, INC.
                    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>

                                                                           9/30/99         12/31/98
                                                                           -------         --------
<S>                                                                        <C>             <C>
LIABILITIES

CURRENT LIABILITIES

Current Maturities of Long-Term Debt ................................      $  10,342       $   8,630
Accounts Payable and Accrued Expenses ...............................        135,628         119,611
Income taxes payable ................................................          1,096           2,693
Deferred Income, current portion ....................................            689             479
                                                                           ---------       ---------
              Total Current Liabilities .............................        147,755         131,413

LONG-TERM DEBT ......................................................        289,645         272,370

DEFERRED INCOME TAXES ...............................................         10,865          12,132

DEFERRED INCOME, less current Portion ...............................          1,052           2,804

SHAREHOLDERS' EQUITY (Note 3)

Special Preferred Stock -
     Authorized 40,000,000 shares of
         $.01 par value; none issued

Common Stock - authorized 40,000,000 shares of $.10 par value; shares
     outstanding:
     22,512 and 22,091, respectively ................................          2,251           2,209
Paid-in Capital .....................................................        148,160         145,161
Retained Earnings ...................................................        174,717         177,839
Accumulated Other Comprehensive Income ..............................         (1,480)         (1,191)
Note receivable from affiliate ......................................         (1,551)             --
                                                                           ---------       ---------
Total Shareholders' Equity ..........................................        322,097         324,018
                                                                           ---------       ---------
         TOTAL LIABILITIES & SHAREHOLDERS' EQUITY ...................      $ 771,414       $ 742,737
                                                                           =========       =========

</TABLE>



The accompanying notes are an integral part of these statements.





                                       6
<PAGE>   7


                        WINDMERE-DURABLE HOLDINGS, INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                                                     -------------------------------
                                                                                          1999             1998
                                                                                          ----             ----
<S>                                                                                       <C>             <C>
Cash flows from operating activities:
     Net earnings (Loss) ..........................................................      $ (3,122)      $  28,233
Adjustments to reconcile net earnings (loss)
     to net cash used in operating activities:
     Depreciation of property, plant and equipment ................................        13,108           7,712
     Amortization of intangible assets ............................................        12,627           3,626
     Amortization of deferred income ..............................................            --            (248)
     Repositioning charge .........................................................            --          17,600
     Loss on disposal of fixed assets .............................................         2,204             617
     Writedown of investment in joint venture .....................................        12,574              --
     Net change in allowance for losses on accounts receivable ....................           603           3,797
     Equity in net earnings (loss) of joint ventures ..............................           371          (1,588)
          Gain on sale of equity interest .........................................             0         (42,651)
     Changes in assets and liabilities
         Increase in accounts and other receivables ...............................       (32,700)        (63,877)
         Increase in inventories ..................................................       (10,409)        (10,632)
         Decrease (increase) in prepaid expenses ..................................         6,814         (12,171)
         Decrease (increase) in other assets ......................................         5,894         (29,956)
         (Decrease) increase in accounts payable and accrued expenses .............        (2,219)         39,424
         Current and deferred income taxes ........................................        (9,462)         11,634
         (Decrease) increase in deferred income ...................................        (1,541)         14,970
         (Decrease) increase in other accounts ....................................          (289)            128
                                                                                         --------       ---------
              Net cash  used in
                operating activities ..............................................        (5,547)        (33,382)

Cash flows from investing activities:
     Additions to property, plant and equipment - net .............................       (17,101)        (13,887)
     Purchase of net assets - Household Products Group ............................            --        (319,626)
     Purchase of net assets from Newtech ..........................................       (15,059)             --
          Proceeds from sale of equity interest in Salton - net ...................            --          72,279
     Decrease (increase) in receivable accounts
         and notes from affiliates ................................................         2,344          (8,165)
                                                                                         --------       ---------
              Net cash used in investing activities ...............................       (29,816)       (269,399)

Cash flows from financing activities:
     Net borrowings under lines of credit .........................................      $ 28,949       $      --
     Notes and acceptances ........................................................             0         (41,984)
     Long-term debt - net .........................................................             0         507,000
     Payments of long-term debt ...................................................        (9,962)       (255,885)
     Exercise of stock options and warrants .......................................         1,490           2,962
     Proceeds from sale of common stock - net .....................................             0          97,636
     Payment of withholding tax on
         Stock option exercises ...................................................            --          (2,346)
                                                                                         --------       ---------
              Net cash provided by financing activities ...........................        20,477         307,383
                                                                                         --------       ---------
              (Decrease) increase in cash
                and cash equivalents ..............................................       (14,886)          4,602
Cash and cash equivalents at beginning of year ....................................        20,415           8,224
                                                                                         --------       ---------
Cash and cash equivalents at end of quarter .......................................      $  5,529       $  12,826
                                                                                         ========       =========

                                  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
     Interest .....................................................................      $ 24,470       $   5,060
     Income taxes .................................................................      $  5,621       $       0
Non-cash investing and financing activities:
     In April 1999, the Company sold 210,000 shares of common stock to its
     Chief Executive Officer in exchange for a promissory note totaling
     $1,496,250

</TABLE>



The accompanying notes are an integral part of these statements.





                                       7
<PAGE>   8



                        WINDMERE-DURABLE HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       SUMMARY OF ACCOUNTING POLICIES

         INTERIM REPORTING

         In the opinion of the Company, the accompanying unaudited consolidated
         financial statements contain all normal recurring adjustments
         necessary to present fairly the Company's financial position as of
         September 30, 1999 and the results of its operations and changes in
         financial position for the interim periods. Results for interim
         periods should not be considered indicative of results for a full
         year. Reference should be made to the financial statements contained
         in the registrant's Annual Report on Form 10-K for the year ended
         December 31, 1998.

         RECLASSIFICATIONS

         Certain prior period amounts have been reclassified for comparability.

         RECEIVABLES FROM AFFILIATES

         Receivables from Affiliates include accounts receivable which arise in
         the ordinary course of business and are settled as trade obligations,
         as well as the current portion of notes receivable due from certain of
         the Company's joint venture partners and other affiliates
         ("Affiliates"). Notes receivable from these Affiliates bear interest
         at prevailing market interest rates.

         DERIVATIVE FINANCIAL INSTRUMENTS

         The Company uses forward exchange contracts to reduce fluctuations in
         foreign currency cash flows related to third party raw material and
         other operating purchases. The terms of the currency instruments used
         are generally consistent with the timing of the committed or
         anticipated transactions being hedged. Outstanding at September 30,
         1999 is $29,000,000, in contracts to purchase Hong Kong dollars,
         forward. Also outstanding are option contracts to sell and buy
         $18,800,000 in Canadian dollars, forward. There is no significant
         unrealized gain or loss on these contracts. All contracts have terms
         of six months or less.

         The Company uses interest rate swaps of one to four years in duration
         primarily to reduce the impact of changes in interest rates on its
         floating rate debt. The notional amounts of the swap agreements are
         used to measure interest to be paid or received and do not represent
         the amount of exposure to credit loss. The differential paid or
         received on the agreements is recognized as an adjustment of interest
         expense.

         As of September 30, 1999, the Company had purchased swaps on
         $120,000,000 notional principal amount with a market value of
         approximately ($98,000). The market value represents the amount the
         Company would have to pay to exit the contracts at September 30, 1999.
         The Company does not intend to exit such contracts at this time.

2.       INVESTMENTS IN JOINT VENTURES

         Investments in Joint Ventures consist of the Company's interests in
         joint ventures, accounted for under the equity method. Included are
         the Company's 50-percent interests in Newtech Electronics Industries,
         Inc. ("Newtech"), Breakroom of Tennessee, Inc. and Anasazi Partners,
         L.P. ("Anasazi").




                                       8
<PAGE>   9


         In June 1999, the Company entered into a definitive asset purchase
         agreement to purchase substantially all of Newtech's assets, including
         inventory, accounts receivable, certain trademarks and other
         intangibles, as well as the assumption of certain liabilities relating
         to the business. Net assets acquired totaled approximately
         $15,000,000. In connection with the acquisition, the Company wrote
         down its remaining investment in Newtech resulting in a one-time
         non-cash charge of $12,574,400 ($8,300,000 after tax). The charge has
         been recorded as equity in net loss of joint ventures in the Company's
         Statement of Operations.

         Under the terms of the agreement, the Company acquired the exclusive
         right and license to use the White-Westinghouse Trademark in North
         America for the design, manufacture, and sale of certain consumer
         electronic products and has been assigned Newtech's rights under the
         long-term supply contracts with the Kmart Corporation in the United
         States and Zellers in Canada. According to the terms of the contracts,
         the Company will supply Kmart and Zellers consumer electronics under
         the White-Westinghouse brand. The remaining term under the Kmart
         contract can be extended up to 2011 upon mutual consent. The Zellers
         contract expires in 2004.

         Notes receivable from Affiliates at September 30, 1999 includes $13.9
         million from the sale of the Company's equity interest in Salton. The
         $13.9 million note has been recorded net of related deferred income
         for anticipated future purchases by Salton from the Company.

         Note: Profits earned by the Company's manufacturing subsidiary on
         sales to joint ventures are included in the consolidated earnings
         results.

3.       SHAREHOLDERS' EQUITY

         EARNINGS PER SHARE

         Basic shares for the three month periods ended September 30, 1999 and
         1998 were 22,478,303 and 21,132,969, respectively. Basic shares for the
         nine month periods ended September 30, 1999 and 1998 were 22,290,429
         and 19,437,363, respectively. Included in diluted shares are common
         stock equivalents relating to options, warrants and convertible debt of
         1,327,338 and 997,061 for the three month periods ended September 30,
         1999 and 1998, respectively and 1,561,771 for the nine month period
         ended September 30, 1998.

         All common stock equivalents have been excluded from the per share
         calculation in the nine month period ended September 30, 1999, as the
         Company incurred a loss in the period and their inclusion would have
         been anti-dilutive.

4.       COMMITMENTS AND CONTINGENCIES

         The Company is a defendant in SHERLEIGH ASSOCIATES LLC AND SHERLEIGH
         ASSOCIATES INC. PROFIT SHARING PLAN, ON THEIR OWN BEHALF AND ON BEHALF
         OF ALL OTHERS SIMILARLY SITUATED V. WINDMERE-DURABLE HOLDINGS, INC.,
         DAVID M. FRIEDSON, HARRY D. SCHULMAN AND NATIONSBANC MONTGOMERY
         SECURITIES LLC, 98-2273-CIV-LENARD which was filed in the United
         States District Court, Southern District of Florida on October 8,
         1998.

         This matter is a class action complaint, which is the consolidation of
         eight separate class action complaints with substantially similar
         allegations. On June 30, 1999, a consolidated amended class action
         complaint was filed. The consolidated amended class action complaint
         was purportedly filed on behalf of those security holders of the
         Company who purchased such securities during a certain period in the
         second and third quarters of 1998, alleging violations of the federal
         securities laws (including Rule 10b-5 promulgated pursuant to the
         Securities Exchange Act of 1934, as amended) in connection with the
         acquisition by the Company of certain product categories of the
         Household Products Group of the Black & Decker Corporation. Among
         other things, the plaintiffs allege that the Company and certain of
         its directors and officers, along with NationsBanc Montgomery
         Securities LLC, provided false information in connection with a public
         offering of debt and equity securities. The plaintiffs seek, among
         other relief, to be declared a class, to be awarded compensatory
         damages, rescission rights, unspecified damages and attorneys' fees
         and costs. The defendants have moved to dismiss the consolidated class
         action complaint. The motion is pending consideration by the Court.






                                       9
<PAGE>   10



         By Order dated March 9, 1999, in addition to consolidating the
         above-referenced cases, the Court provisionally certified the class of
         plaintiffs who purchased Windmere stock between May 12, 1998 and
         September 22, 1998, and provisionally certified Sherleigh Associates
         LLC and Sherleigh Associates, Inc. Profit Sharing Plan as lead
         plaintiff. By Order dated June 3, 1999, the Court, among other things,
         appointed lead counsel and directed the filing of a joint scheduling
         order. On June 23, 1999, the parties submitted a Joint Scheduling
         Report and a proposed scheduling order, which is still under
         consideration by the Court.

         The Company is currently advancing the legal expenses of the directors
         and officers who were named as defendants. Such defendants have agreed
         to repay the Company for all or any portion of such advances to which
         they are ultimately found not to be entitled pursuant to applicable
         law. Based on the information currently available to the Company,
         management does not believe that the indemnification of the officers
         and directors named as defendants in the above-listed matters will
         have a material adverse effect on the financial condition, results of
         operations or liquidity of the Company. However, the actual effects of
         such indemnification on the Company cannot be finally determined until
         the amount of such indemnification, if any, is fixed.

         The Company is subject to other legal proceedings and claims which
         arise in the ordinary course of its business. In the opinion of
         management, the amount of ultimate liability, if any, in excess of
         applicable insurance coverage, is not likely to have a material effect
         on the financial position of the Company. However, as the outcome of
         litigation or other claims is difficult to predict, significant
         changes in the estimated exposures could occur.

5.       BUSINESS SEGMENT INFORMATION

         Summarized financial information concerning the Company's reportable
         segments is shown in the following table. Corporate related items,
         results of insignificant operations and, as it relates to segment
         profit (loss), income and expense not allocated to reportable segments
         are included in the reconciliations to consolidated results.

         Segment information for the three month periods ended September 30,
         are as follows: (In Thousands)

<TABLE>
<CAPTION>
                                                                            HOUSEHOLD
                                                               WINDMERE      PRODUCTS     DURABLE
                                                                GROUP         GROUP     MANUFACTURING      TOTAL
                                                                -----       ----------  -------------      -----

 <S>                                                          <C>             <C>             <C>          <C>
        1999
         Net Sales ....................................      $  53,573       $ 126,472       $54,061      $234,106
         Intersegment net sales .......................             --              --        46,413        46,413
         Operating earnings ...........................            940          17,374         9,502        27,816


         1998
         Net Sales ....................................         47,546         100,262        39,384       187,192
         Intersegment net sales .......................             --              --        27,064        27,064
         Operating earnings ...........................          2,154           7,595         8,875        18,624

         Reconciliation to consolidated amounts:

                                                                                                1999          1998
                                                                                             -------      --------
         Revenues

         Total revenues for reportable segments .........................................  $ 234,106     $ 187,192
         Other revenues .................................................................     16,536           325
         Eliminations of intersegment revenues ..........................................    (46,413)      (27,064)
                                                                                             -------      --------
              Total consolidated revenues ...............................................  $ 204,229     $ 160,453
                                                                                             =======      ========

</TABLE>





                                      10
<PAGE>   11

<TABLE>
<CAPTION>
<S>                                                          <C>            <C>
         Operating earnings
              Total earnings for reportable segments ..      $ 27,816       $ 18,624
              Other earnings (loss) ...................         1,221             52
              Corporate headquarters expense ..........        (3,218)        (2,224)
              Interest expense ........................        (7,212)        (8,104)
              Equity in net earnings of joint ventures             --            362
              Gain on sale of equity interest .........            --         42,651
                                                             --------       --------
              Consolidated earnings before income taxes      $ 18,607       $ 51,361
                                                             ========       ========
</TABLE>

         Segment information for the nine month periods ended September 30, are
         as follows: (In Thousands)

<TABLE>
<CAPTION>
                                                                 HOUSEHOLD
                                                  WINDMERE       PRODUCTS            DURABLE
                                                   GROUP          GROUP          MANUFACTURING        TOTAL
                                                -----------     -----------      --------------       ------
<S>                                               <C>             <C>               <C>              <C>
         1999
         Net Sales .........................      $ 148,498       $269,664          $117,017         $535,179
         Intersegment net sales ............             --             --            87,193           87,193
         Operating earnings (loss) .........         (3,955)        13,508            19,821           29,374


         1998
         Net Sales .........................        139,369        100,797            99,111          339,277
         Intersegment net sales ............             --             --            61,508           61,508
         Operating earnings (loss) .........           (268)         7,649            17,069           24,450

</TABLE>





                                      11
<PAGE>   12


         Reconciliation to consolidated amounts:

<TABLE>
<CAPTION>
                                                                                        1999             1998
                                                                                        ----             ----
<S>                                                                             <C>             <C>
         Revenues
              Total revenues for reportable segments.......................     $     535,179   $      339,277
              Other revenues...............................................            24,264              646
              Eliminations of intersegment revenues........................           (87,193)         (61,508)
                                                                                -------------   --------------
                  Total consolidated revenues..............................     $     472,250   $      278,415
                                                                                =============   ==============

         Operating earnings (loss)
              Total earnings (loss) for reportable segments................     $      29,374   $       24,450
              Other earnings...............................................             5,640           (4,413)
              Corporate headquarters expense...............................            (7,661)          (4,686)
              Interest expense.............................................           (19,947)         (10,575)
              Equity in net earnings (loss) of joint ventures..............           (12,894)           1,558
              Gain on sale of equity interest..............................                --           42,651
              Repositioning charge.........................................                --           (9,914)
                                                                                -------------   --------------
              Consolidated earnings (loss) before income taxes.............     $      (5,488)          39,071
                                                                                =============   ==============
</TABLE>


6.       CONDENSED CONSOLIDATING FINANCIAL INFORMATION

         The following condensed consolidating financial information presents
         the results of operations, financial position and cash flows of the
         Company (on a stand alone basis), the guarantor subsidiaries of the
         Company's Senior Subordinated Notes ("Notes") (on a combined basis),
         the non-guarantor subsidiaries (on a combined basis) and the
         eliminations necessary to arrive at the consolidated results of the
         Company. The results of operations and cash flows presented below
         assume as if the guarantor subsidiaries were in place for all periods
         presented. The Company and subsidiary guarantors have accounted for
         investments in their respective subsidiaries on an unconsolidated
         basis using the equity method of accounting. The Subsidiary Guarantors
         are wholly-owned subsidiaries of the Company and have fully and
         unconditionally guaranteed the Notes on a joint and several basis. The
         guarantors include the following: Windmere Corporation, Windmere
         Holdings Corporation, Windmere Holdings Corporation II, Jerdon
         Products, Inc., Fortune Products, Inc., Bay Books & Tapes, Inc.,
         Consumer Products Americas, Inc., Windmere Innovative Pet Products,
         Inc., EDI Masters, Inc., Windmere Fan Products, Inc., Household
         Products, Inc., HP Delaware, Inc., HP Americas, Inc., HPG LLC, HP
         Intellectual Corp., WD Delaware, Inc. and WD Delaware II, Inc. The
         Notes contain certain covenants which, among other things, will
         restrict the ability of the Subsidiary Guarantors to make
         distributions to Windmere-Durable Holdings, Inc. The Company has not
         presented separate financial statements and other disclosures
         concerning the guarantors and non-guarantor subsidiaries because it
         has determined they would not be material to investors.






                                      12
<PAGE>   13



<TABLE>
<CAPTION>
                                                                  NINE MONTHS ENDED SEPTEMBER 30, 1999
                                             ---------------------------------------------------------------------------
(In thousands)
                                              WINDMERE DURABLE                       NON
                                                HOLDINGS, INC.     GUARANTORS    GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                             -----------------     ----------    ----------   ------------   ------------
<S>                                                       <C>         <C>          <C>          <C>            <C>
STATEMENT OF OPERATIONS
Net Sales     ................................            0           293,786      271,186         (92,722)       472,250
Cost of goods sold............................            0           194,909      226,347         (90,763)       330,493
                                                 ----------       -----------   ----------     -----------     ----------
Gross Profit  ................................            0            98,877       44,839          (1,959)       141,757
Operating Expenses............................         (521)           98,968       17,290             271        116,008
                                                 ----------       -----------   ----------     -----------     ----------
Operating Profit (Loss).......................          521               (91)      27,549          (2,230)        25,749
Other (income) expense, net...................       18,670            (1,691)         271           1,093         18,343
                                                 ----------       -----------   ----------     -----------     ----------
Earnings (loss) before income taxes and
     equity in earnings (loss) of joint
     ventures ................................      (18,149)            1,600       27,278          (3,323)         7,406
Provision (Benefit) for income taxes..........            0            (3,562)       3,766          (2,570)        (2,366)
Equity in net earnings (loss)
     of joint ventures........................          593           (13,487)           0               0        (12,894)
                                                 ----------       -----------   ----------     -----------     ----------
Net earnings (loss)...........................      (17,556)           (8,325)      23,512            (753)        (3,122)
                                                 ==========       ===========   ==========    ============    ===========

BALANCE SHEET
Cash          ................................            6            (3,954)       9,477               0          5,529
Accounts and other receivables................            0           158,404       51,141          (5,529)       204,016
Receivables from affiliates...................       21,390           (39,600)      30,301          (8,847)         3,244
Inventories   ................................            0           105,281       69,278          10,921        185,480
Other current assets..........................            0            23,281        6,508          11,536         41,325
                                                 ----------       -----------   ----------     -----------     ----------
     Total current assets.....................       21,396           243,412      166,705           8,081        439,594
Investments in joint ventures.................      426,413             9,248       70,585        (503,483)         2,763
Property, plant and equipment, net............            0            12,856       65,010               0         77,866
Other assets  ................................            0           534,254       11,885        (294,948)       251,191
                                                 ----------       -----------   ----------     -----------     ----------
     Total assets.............................      447,809           799,770      314,185        (790,350)       771,414
                                                 ==========       ===========   ==========     ===========     ==========

LIABILITIES:
Notes payable ................................            0            11,350            0         (11,350)             0
Accounts payable and accrued expenses.........            1            70,575       65,052               0        135,628
Current maturities of long term debt..........       10,342                 0            0               0         10,342
Deferred income, current portion..............            0               689            0               0            689
Income taxes payable..........................            0            (1,164)       1,045           1,215          1,096
                                                 ----------       -----------   ----------     -----------     ----------
     Total current liabilities................       10,343            81,450       66,097         (10,135)       147,755
Long term debt................................      284,195           286,404        5,450        (286,404)       289,645
Deferred income, less current portion.........            0               269            0             783          1,052
Deferred income taxes.........................            0            16,254        2,969          (8,358)        10,865
                                                 ----------       -----------   ----------     -----------     ----------
     Total liabilities........................      294,538           384,377       74,516        (304,114)       449,317
Shareholders' equity..........................      153,271           415,393      239,669        (486,236)       322,097
                                                 ----------       -----------   ----------     -----------     ----------
     Total liabilities and shareholders'
        equity................................      447,809           799,770      314,185        (790,350)       771,414
                                                 ==========        ==========   ==========     ===========      =========

Cash Flow Information

Net cash provided by (used in) operating
     activities...............................      (17,555)          66,983       10,870          (65,556)        (5,258)
Net cash provided by (used in) investing
     activities...............................       (9,474)          35,241      (35,407)         (20,176)       (29,816)
Net cash provided by (used in) financing
     activities...............................       27,035         (109,261)      16,971           85,732         20,477
Effect of exchange rate.......................            0                0         (289)               0           (289)
Cash at beginning.............................            0            3,083       17,332                0         20,415
Cash at end   ................................            6           (3,954)       9,477                0          5,529

</TABLE>



                                      13
<PAGE>   14


<TABLE>
<CAPTION>

                                                                   NINE MONTHS ENDED SEPTEMBER 30, 1998
                                             ----------------------------------------------------------------------------
(In thousands)
                                              WINDMERE DURABLE                      NON
                                               HOLDINGS, INC.      GUARANTORS    GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                             -----------------     ----------    ----------   ------------   ------------
<S>                                                       <C>         <C>          <C>             <C>          <C>
STATEMENT OF OPERATIONS
Net Sales.....................................            0           236,791      103,132         (61,508)      278,415
Cost of goods sold............................            0           180,914       83,466         (62,212)      202,168
                                                 ----------       -----------   ----------    ------------    ----------
     Gross profit.............................            0            55,877       19,666             704        76,247
Operating expenses............................         (448)           61,276        2,460             270        63,558
Repositioning charge..........................            0             9,914            0               0         9,914
                                                 ----------       -----------   ----------     -----------    ----------
Operating Income..............................          448           (15,314)      17,207             434         2,775
Other (income) expense, net...................         (277)          (35,084)       1,699          (1,076)      (34,738)
                                                 -----------      ------------  ----------    ------------   -----------
Earnings before income taxes and
     minority interest in
     subsidiaries.............................          212            19,039       18,906            (643)       37,513
Provision for income taxes....................            0            15,354        1,251          (5,766)       10,838
Equity in earnings of affiliated
     companies, net of tax....................          151             1,407            0               0         1,558
                                                 ----------       -----------   ----------     -----------    ----------
Net earnings..................................          362             5,092       17,655           5,124        28,233
                                                 ==========       ===========   ==========     ===========    ==========

BALANCE SHEET
Cash..........................................            0             5,254        7,572               0        12,826
Accounts receivables..........................            0           123,103       21,466            (622)      143,947
Intercompany receivables......................       24,761           (20,296)       3,585            (538)        7,513
Inventories...................................            0           137,773       45,134             283       183,190
Other current assets..........................            0            37,317        2,550          (1,182)       38,685
                                                 ----------            ------        -----           -----        ------
     Total current assets.....................       24,761           283,151       80,307          (2,059)      386,160
Investment in affiliated companies............      414,427            23,021       70,477        (492,135)       15,788
Property and equipment, net...................            0            59,475       31,485               0        90,960
Other assets..................................            0           617,284       19,940        (354,438)      282,786
                                                 ----------       -----------   ----------    ------------    ----------
     Total assets.............................      439,188           982,930      202,209        (848,633)      775,694
                                                 ==========       ===========   ==========    ============    ==========

Notes payable.................................            0            11,350          998         (11,350)          998
Accounts payable and accrued expenses.........            1           132,079        9,103            (622)      140,561
Current maturities of L.T.....................        8,630                 0            0               0         8,630
Deferred income taxes.........................            0            15,839          866            (656)       16,049
                                                 ----------       -----------   ----------    ------------    ----------
     Total current liabilities................        8,631           159,268       10,967         (12,628)      166,238
Long term debt................................      260,370           356,869            0        (354,869)      262,370
Deferred income, less current portion.........            0            15,218            0             824        16,042
Deferred income taxes.........................            0            12,836        2,146          (1,960)       13,022
                                                 ----------       -----------   ----------    ------------    ----------
     Total liabilities........................      269,001           544,192       13,113        (368,634)      457,672
Shareholders' equity..........................      170,187           438,738      189,097        (479,999)      318,022
                                                 ----------       -----------   ----------    ------------    ----------
     Total liabilities and shareholders
       equity.................................      439,188           982,930      202,209        (848,633)      775,694
                                                 ==========        ==========   ==========    ============     =========

Cash Flow Information

Net cash provided (used) in operating activities    40,685           (613,451)      (5,983)        545,368       (33,382)
Net cash provided (used) in investing activities  (398,521)            30,606       (1,885)        100,401      (269,399)
Net cash provided (used) in financing activities   357,836            588,099        7,217        (645,769)      307,383
Cash at beginning.............................           0                  0        8,224               0         8,224
Cash at end...................................           0              5,254        7,572               0        12,826

</TABLE>

7.       RELATED PARTY TRANSACTIONS

         On April 14, 1999, the Company sold 210,000 shares of authorized
         Common Stock at the fair market value of $7.125 per share to its Chief
         Executive Officer in exchange for a promissory note. The note is on a
         full recourse basis, with a maturity of three years from the date of
         purchase and bears interest at LIBOR plus 2.75%.






                                      14
<PAGE>   15


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

This document contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Such statements
are indicated by words or phrases such as "anticipate," "projects," "management
believes," "the Company believes," "intends," "expects," and similar words or
phrases. Such forward-looking statements are subject to certain risks,
uncertainties or assumptions and may be affected by certain other factors.
Should one or more of these risks, uncertainties or other factors materialize,
or should underlying assumptions prove incorrect, actual results, performance,
or achievements of the Company may vary materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph. The
Company disclaims any obligation to publicly announce the results of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.

The Company, through its subsidiaries, is a leading diversified manufacturer
and distributor of a broad range of branded and private label small household
appliances, including electric housewares (kitchen and garment care), personal
care, and other products. The Company manufactures and markets products under
the Windmere(R) and other Company-owned brand names, under private-label brand
names, under licensed brand names, such as Black & Decker(R) and, pursuant to
licenses such as, the White-Westinghouse(R) brand name. The Company's customers
for such products include mass merchandisers, specialty retailers and appliance
distributors primarily in North America, Latin America and the Caribbean. In
addition, the Company manufactures products on an OEM basis for other major
consumer products companies. The Company also manufactures and markets the
LitterMaid(R) self-cleaning cat litter box.

RESULTS OF OPERATIONS

The operating results of the Company expressed as a percentage of sales and
other revenues are set forth below:

                                                NINE MONTHS ENDED SEPTEMBER 30,
                                               -------------------------------
                                                      1999          1998
                                                      ----          ----
Net Sales......................................       100.0%       100.0%
Cost of goods sold ............................        70.0         72.6
                                                      -----        -----
Gross Profit ..................................        30.0         27.4
Selling, general and administrative expenses ..        24.6         22.8
Other (income) expense - net ..................         3.9        (12.4)
Equity in net earnings (loss) of joint ventures        (2.7)          .6
                                                      -----        -----
Earnings (loss) before income taxes ...........        (1.2)        14.0
Provision (benefit) for income taxes ..........         (.5)         3.9
                                                      -----        -----
Net earnings (loss) ...........................         (.7)%       10.1%
                                                      =====        =====


THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

Sales and other revenues

Sales and other revenues ("Revenues") for the Company increased by $43.8
million to $204.2 million, an increase of 27.3% over Revenues for the third
quarter of 1998. Sales to Walmart accounted for 20% and 14% of total sales for
the 1999 and 1998 periods, respectively.





                                      15
<PAGE>   16


The increase is primarily the result of a $26.2 million or 26.1% increase in
sales by the Household Products Group. The remaining increase in revenues may
be attributed to a $6.0 million increase in Windmere Group sales, including
$2.5 million in LitterMaid sales and sales of Newtech electronics of
approximately $14.5 million, offset by a $4.7 million decrease in Durable OEM
sales.

Gross Profit Margin

The Company's gross profit margin decreased to 31.9% of Revenues in 1999 from
34.3% in the 1998 period. The decrease in gross profit margin is primarily the
result of approximately $14.5 million in sales, at significantly lower margins,
of inventory purchased as part of the second quarter Newtech acquisition.
The minimal amount of inventory remaining from the June 1999 Newtech transaction
should result in less dilution to fourth quarter margins.

Excluding sales of Newtech inventory, the gross profit margin was 33.7% for the
1999 period as compared to the 34.3% in 1998. Productivity gains at the
Company's manufacturing facilities, offset by product mix and by aggressive
pricing strategies used to gain additional market share in the Black & Decker
business were the primary contributors to the minimal change in gross profit
rate.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Company increased by
$.8 million in the third quarter of 1999 yet decreased as a percentage of sales,
to 19.6% from 24.3% in the 1998 period.

Equity in Net Earnings of Joint Ventures

In June 1999, the Company wrote down its remaining investment in Newtech and,
therefore, discontinued recording its interest in the joint ventures'
operations.

Interest Expense

Interest expense decreased to $7.2 million in 1999 from $8.1 million in 1998.
The higher interest costs in 1998 were due to bridge debt outstanding during
July of 1998 which was at significantly higher interest rates than the
Company's existing facilities.

Taxes

The Company's tax expense is based on the earnings of each of its foreign and
domestic operations and it includes such additional U.S. taxes as are
applicable to any repatriation of foreign earnings. Foreign earnings, other
than in Canada, Mexico and certain other countries in Latin America, are
generally taxed at rates lower than in the United States.

Earnings Per Share

Basic shares for the three month periods ended September 30, 1999 and 1998 were
22,478,303 and 21,132,969, respectively. Included in diluted shares are common
stock equivalents relating to options, warrants and convertible debt of
1,327,338 and 997,061 for the three month periods ended September 30, 1999 and
1998, respectively.

Windmere Group

Windmere Group sales increased by $6.0 million to $53.6 million in the third
quarter of 1999. The increase in Windmere Group sales is attributable to
increased sales of electric housewares and growth in LitterMaid product sales
partially offset by weakness in personal care sales. LitterMaid distribution
sales increased by $2.5 million or 46.8% over 1998 sales.

Gross profit margin for the Windmere Group decreased to 20.7% in the 1999
period as compared to 27.2% in 1998. The decrease is the result of increased
sales of lower margin items comprising the period's product mix.





                                      16
<PAGE>   17


Selling, general and administrative expenses decreased by $.6 million in the
1999 third quarter to approximately $10.2 million and as a percentage of sales
to 19.0% from 22.7% in 1998.

Household Products Group

Sales for the Household Products Group increased by $26.2 million to $126.5
million or 26.1% from the 1998 period. Approximately 66% of the increase in
sales may be attributed to existing and new product introductions to domestic
retailers. The remaining growth is the result of existing and new product
introductions in Latin America and Canada.

The gross profit margin for the Household Products Group decreased from 32.8%
in 1999 of sales to 32.0% of sales in 1999. The decrease is the result of
increased volume and productivity gains partially offset by product mix and
more competitive pricing strategies used to gain additional market share.

Selling, general and administrative expenses for the Household Products Group
decreased by approximately $2.2 million in the 1999 third quarter to $23.1
million. The decrease is primarily the result of the exiting 19 of the 20
service contracts with Black & Decker in the second quarter. Selling, general
and administrative expenses represented 18.3% and 25.2% of segment sales in the
1999 and 1998 periods, respectively.

Durable Manufacturing

Sales at the Company's China based manufacturing subsidiary increased by $14.7
million in the 1999 period as compared to 1998. Included in 1999 total sales are
OEM sales to third parties totaling $7.6 million.

Operating earnings for Durable Manufacturing increased by $.6 million to $9.5
million in the 1999 third quarter. Increased productivity and capacity
utilization contributed to the improved results.

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

Sales and other revenues

Sales and other revenues ("Revenues") for the Company increased by $193.8
million to $472.3 million, an increase of 70% over Revenues for the nine months
ended September 30, 1998. The increase is primarily the result of an increase in
Household Products Group sales of $168.9 million to $269.7 million in
distribution sales and which is inclusive of HPG results for the entire 1999
period. Sales to Walmart accounted for 18% of total sales for the 1999 period.
The remaining increase in revenues may be attributed to a $9.1 million increase
in Windmere Group sales and $17.0 in sales of Newtech electronics offset by a
decrease in Durable OEM sales of $7.8 million.

Gross Profit Margin

The Company's gross profit margin was 30.0% in 1999 and in 1998, excluding the
$7.7 million portion of the repositioning charge recorded as cost of goods sold
in the 1998 period. Productivity gains at the Company's manufacturing facilities
offset by product mix and by aggressive pricing strategies used to gain
additional market share in the Black & Decker business were the primary
contributors to the unchanged gross profit rate.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Company increased by $52.5
million to $116.0 million in the nine months ended September 30, 1999. As a
percentage of sales, costs increased to 24.6% from 22.8% in the 1998 period.
The increase is primarily due to the June 26, 1998 acquisition of the Household
Products Group ("HPG").




                                      17
<PAGE>   18


Equity in Net Earnings of Joint Ventures

The Company's equity in net earnings of joint ventures decreased to a loss of
$12.9 million in the 1999 period compared to income of $1.6 million in the 1998
period. The decrease is primarily the result of a one-time non cash charge of
$12.6 million ($8.3 million after tax) to write down the Company's remaining
investment in Newtech in conjunction with the June 1999 purchase of Newtech's
assets.

Interest Expense

Interest expense increased to $19.9 million in 1999 from $10.6 million in 1998.
The change is the result of amounts borrowed in conjunction with the
acquisition of HPG, beginning in July 1998.

Taxes

The Company's tax expense is based on the earnings of each of its foreign and
domestic operations and it includes such additional U.S. taxes as are
applicable to any repatriation of foreign earnings. Foreign earnings, other
than in Canada, Mexico and certain other countries in Latin America, are
generally taxed at rates lower than in the United States.

Earnings Per Share

Basic shares for the nine month periods ended September 30, 1999 and 1998 were
22,290,429 and 19,437,363, respectively. Included in diluted shares are common
stock equivalents relating to options, warrants and convertible debt of
1,561,771 for the nine month period ended September 30, 1998. All common stock
equivalents have been excluded from the per share calculation in the 1999
period, as the Company incurred a loss in the period and their inclusion would
have been anti-dilutive.

Windmere Group

Windmere Group sales increased by $9.1 million to $148.5 million in the first
nine months ended September 30, 1999. The increase in Windmere Group sales is
attributable to increases in LitterMaid, kitchen and seasonal product sales
partially offset by weakness in personal care sales. LitterMaid distribution
sales increased by $8.0 million or 66.9% over 1998 sales.

Gross profit margin for the Windmere Group decreased to 19.4% in the 1999
period as compared to 21.7% in 1998. The decrease is the result of increased
sales of lower margin items comprising the period's product mix.

Selling, general and administrative expenses for the Windmere Group increased
by approximately $2.2 million to $32.7 million or 22.0% of segment sales from
$30.5 million or 21.9% of segment sales in the 1998 period. Contributing
significantly to the increase were costs directly associated with the increase
in LitterMaid sales volume such as royalties, a reserve for a customer who
filed for bankruptcy in the period and approximately $500,000 related to the
write-off of product design costs in conjunction with a change in accounting
regulations.

Household Products Group

Sales for the Household Products Group increased by $168.9 million to $269.7
million in 1999. The Company acquired the Household Products Group on June 26,
1998, therefore group results were excluded from the first six months of 1998.
The remaining increase is due to a $26.2 million increase in 1999 third quarter
sales as compared to the 1998 period. Third quarter growth resulted from
existing and new product introductions primarily in North America as well as
Latin America and Canada.





                                      18
<PAGE>   19


Selling, general and administrative expenses for the Household Products Group
totaled $70.2 million or 26.0% of segment sales compared to $25.4 million or
25.2% in the 1998 period. Included in selling, general and administrative
expenses in the 1999 period was approximately $3.2 million in costs under
contracts where Black & Decker was providing services to the Company during a
transition period while the Company was putting in place its own personnel and
systems and $2.4 million in costs to run back office operations at the
Company's Shelton, CT location. All significant service contracts with Black &
Decker have been exited as of May 31, 1999 and all back office operations have
been relocated to the Company's Miami headquarters, as of June 30, 1999. Also
included is approximately $9.4 million in amortization of intangibles recorded
in conjunction with the acquisition.

Durable Manufacturing

Sales at the Company's China based manufacturing subsidiary increased by $17.9
million or 18.1% to $117.0 million in the 1999 period. Included in total sales
are OEM sales to third parties totaling $29.8 million, a decrease of $7.8
million from 1998.

Operating earnings for Durable Manufacturing increased by $2.8 million to $19.8
million in the 1999 period. Increased productivity and capacity utilization
contributed to the improved results.

Liquidity and Capital Resources

At September 30, 1999, the Company's working capital was $291.8 million, as
compared to $219.9 million at September 30, 1998. At September 30, 1999 and
1998, the Company's current ratio was 3.0 to 1 and 2.3 to 1, respectively, and
its quick ratio was 1.6 to 1 and 1.2 to 1, respectively. The improvement in
ratios is primarily the result of the acquisition.

Cash balances decreased by approximately $14.9 million for the nine months
ended September 30, 1999. The net cash used in operating activities is
primarily the result of the increased growth in sales resulting from the June
26, 1998 acquisition of HPG resulting in higher accounts receivable and
inventory balances.

Cash used in investing activities totaled approximately $29.8 million for the
period and is primarily the result of $17.1 million in capital expenditures at
the Company's manufacturing facilities and approximately $15.0 million for the
purchase of the assets of Newtech.

Funds provided by financing activities totaled approximately $20.5 million in
the period reflecting increased net borrowings of $19.0 million. Borrowings are
used to meet additional working capital requirements associated with the
increased level of operations.

No provision for U.S. taxes has been made on undistributed earnings of the
Company's foreign subsidiaries and joint ventures because management plans to
reinvest such earnings in their respective operations or in other foreign
operations. Repatriating those earnings or using them in some other manner
which would give rise to a U.S. tax liability would reduce after tax earnings
and available working capital.

Certain of the Company's foreign subsidiaries have approximately $36.0 million
in trade finance lines of credit, payable on demand, which are secured by the
subsidiaries' tangible and intangible property, and in some cases, a Company
guarantee. Outstanding borrowings by the Company's Hong Kong subsidiaries are
primarily in U.S. dollars.

The Company's primary sources of liquidity are its cash flow from operations and
borrowings under the Senior Secured Credit Facilities. The Company is currently
borrowing $129.0 million under the term loan portion of its Senior Secured
Credit Facilities. The Senior Secured Revolving Credit Facility as amended,
provides for borrowings by the Company of up to $110.0 million through December
31, 1999 and $160.0 million thereafter and through the remainder of the term of
the loan. As of November 9, 1999, the Company is borrowing $50.5 million under
the Senior Secured Revolving Credit Facility and has approximately $63.8 million
available for future borrowings, under all its credit facilities. Advances under
the Senior Secured Revolving Credit Facility are based upon percentages of
outstanding eligible accounts receivable and inventories.

The Company's aggregate capital expenditures for the nine months ended September
30, 1999 were $17.1 million. The Company anticipates that the total capital
expenditures for 1999 will be approximately $21.0 million, which includes the
cost of new tooling. The Company plans to fund those capital expenditures from
cash flow from operations and, if necessary, borrowings under the Senior Secured
Revolving Credit Facility.





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<PAGE>   20


At September 30, 1999, debt as a percent of total capitalization was 48
percent.

The Company's ability to make scheduled payments of principal of, or to pay the
interest on, or to refinance, its indebtedness, or to fund planned capital
expenditures, product research and development expenses and marketing expenses
will depend on its future performance, which, to a certain extent, is subject
to general economic, financial, competitive, legislative, regulatory, and
international and United States domestic political factors and other factors
that are beyond the Company's control. Based upon the current level of
operations and anticipated cost savings and revenue growth, management believes
that cash flow from operations and available cash, together with available
borrowings under the Senior Credit and other facilities, will be adequate to
meet the Company's future liquidity needs for at least the next several years.
The Company may, however, need to refinance all or a portion of the principal
of the indebtedness on or prior to maturity. There can be no assurance that the
Company's business will generate sufficient cash flow from operations, that
anticipated revenue growth and operating improvements will be realized or that
future borrowings will be available under the Senior Secured Credit Facilities
in an amount sufficient to enable the Company to service its indebtedness,
including the Senior Subordinated Notes, or to fund its other liquidity needs.
In addition, there can be no assurance that the Company will be able to effect
any such refinancing on commercially reasonable terms or at all. It is the
Company's intention to pay down outstanding borrowings under its Revolving
Credit Facility in the first quarter of 2000.

CURRENCY MATTERS

While the Company transacts business predominantly in U.S. dollars and most of
its revenues are collected in U.S. dollars, a portion of the Company's costs,
such as payroll, rent and indirect operations costs, are denominated in other
currencies, such as Chinese renminbi, Hong Kong dollars and Mexican pesos.
Changes in the relation of these and other currencies to the U.S. dollar will
affect the Company's cost of goods sold and operating margins and could result
in exchange losses. The impact of future exchange rate fluctuations on the
Company's results of operations cannot be accurately predicted.

The Company uses forward exchange contracts to reduce fluctuations in foreign
currency cash flows related to third party raw material and other operating
purchases as well as trade receivables. The purpose of the Company's foreign
currency management activity is to reduce the risk that eventual cash flows
from foreign currency denominated transactions may be adversely affected by
changes in exchange rates.

Durable uses the Hong Kong dollar as its functional currency. The Hong Kong
dollar has historically been "pegged" to a fixed exchange rate vis-a-vis the
U.S. dollar. If the Hong Kong dollar were to be significantly devalued against
the U.S. dollar and the exchange rate allowed to fluctuate, the Company could
experience significant changes in its currency translation account which would
impact the Company's future comprehensive income. The Company has acquired the
Queretaro property and related assets from The Black & Decker Corporation.
Because the operations of such facilities are primarily peso-denominated and
the revenues derived from products manufactured at such facilities are
primarily dollar-denominated, the Company is now subject to fluctuations in the
value of the peso. The December 1994 devaluation of the peso had a number of
effects on the Mexican economy that adversely affected the financial condition
of businesses in Mexico. The devaluation caused the peso value of dollar
denominated indebtedness associated with businesses in Mexico to increase
significantly, and also greatly increased the rate of inflation, resulting in a
sharp rise in nominal interest rates on peso-denominated financing. There can
be no assurance that the peso to dollar foreign exchange rate will not be
volatile in the future and that financial markets will not have a material
adverse effect on the Company's business, financial condition and results of
operations.

The Company uses interest rate swaps of one to four years in duration to reduce
the impact of changes in interest rates on its floating rate debt. The notional
amounts of the agreements are used to measure interest to be paid or received
and do not represent the amount of exposure to credit loss. The differential
paid or received on the agreements is recognized as an adjustment of interest
expense.






                                      20
<PAGE>   21


As of September 30, 1999, the Company had purchased interest rate swaps on $120
million notional principal amount with a market value of approximately
($98,000). The market value represents the amount the Company would have to pay
to exit the contracts at September 30, 1999. The Company does not intend to
exit such contracts at this time.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards (FAS)
No. 133, "Accounting for Derivative Instruments and Hedging Activities." FAS No.
133 establishes standards for accounting and reporting for derivative
instruments, and conforms the requirements for treatment of different types of
hedging activities. This statement is effective for all fiscal years beginning
after June 15, 2000. The Company has not completed its evaluations of FAS No.
133.

SEASONALITY

The Company's business is highly seasonal, with operating results varying from
quarter to quarter. The Company has historically experienced higher revenues in
the third and fourth quarters of each fiscal year primarily due to increased
demand by customers for products in the late summer for "back-to-school" sales
and in the fall for holiday sales. As a result of the HPG acquisition, the
fourth quarter has now become the Company's largest quarter. The Company's
major sales occur during August through November. Sales are generally made on
45 to 90 day terms. Heaviest collections on its open accounts receivable are
received from November through March, at which time the Company is in its most
liquid state.

YEAR 2000 ISSUES

The Company uses a significant number of computer software programs and
operating systems across its entire organization, including applications used
in financial business systems, manufacturing and administrative functions. A
complete evaluation has been performed to identify whether any of the Company's
software applications contain source code that is unable to interpret the
upcoming year 2000 and beyond. The appropriate modifications have been made and
the Company now believes that its critical systems are Year 2000 compliant. The
Company has received communications from its major suppliers and trading
partners, some of who have filed reports with the Securities and Exchange
Commission, and believes that they are also Year 2000 Compliant. The cost of
implementing required system changes is not material to the Company's
consolidated financial statements. No assurance can be given, however, that all
of the Company's systems, the systems of acquired businesses and those of
significant customers and suppliers will not experience Year 2000 compliance
difficulties. Difficulties that arise may result in unfavorable business
consequences including disruption in product shipments, delays in receipt of
materials, delay in customer receipts and payments to suppliers.

LEGAL PROCEEDINGS

The Company is a defendant in SHERLEIGH ASSOCIATES LLC AND SHERLEIGH ASSOCIATES
INC. PROFIT SHARING PLAN, ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHERS
SIMILARLY SITUATED V. WINDMERE-DURABLE HOLDINGS, INC., DAVID M. FRIEDSON, HARRY
D. SCHULMAN AND NATIONSBANC MONTGOMERY SECURITIES LLC, 98-2273-CIV-LENARD which
was filed in the United States District Court, Southern District of Florida on
October 8, 1998.

This matter is a class action complaint, which is the consolidation of eight
separate class action complaints with substantially similar allegations. On
June 30, 1999, a consolidated amended class action complaint was filed. The
consolidated amended class action complaint was purportedly filed on behalf of
those security holders of the Company who purchased such securities during a
certain period in the second and third quarters of 1998, alleging violations of
the federal securities laws (including Rule 10b-5 promulgated pursuant to the
Securities Exchange Act of 1934, as amended) in connection with the acquisition
by the Company of certain product categories of the Household Products Group of
the Black & Decker Corporation. Among other things, the plaintiffs allege that
the Company and certain of its directors and officers, along with NationsBanc
Montgomery Securities LLC, provided false information in connection with a
public offering of debt and equity securities. The plaintiffs seek, among other
relief, to be declared a class, to be awarded compensatory damages, rescission
rights, unspecified damages and attorneys' fees and costs. The defendants have
moved to dismiss the consolidated class action complaint. The motion is pending
consideration by the Court.






                                      21
<PAGE>   22


By Order dated March 9, 1999, in addition to consolidating the above-referenced
cases, the Court provisionally certified the class of plaintiffs who purchased
Windmere stock between May 12, 1998 and September 22, 1998, and provisionally
certified Sherleigh Associates LLC and Sherleigh Associates, Inc. Profit
Sharing Plan as lead plaintiff. By Order dated June 3, 1999, the Court, among
other things, appointed lead counsel and directed the filing of a joint
scheduling order. On June 23, 1999, the parties submitted a Joint Scheduling
Report and a proposed scheduling order, which is still under consideration by
the Court.

The Company is currently advancing the legal expenses of the directors and
officers who were named as defendants. Such defendants have agreed to repay the
Company for all or any portion of such advances to which they are ultimately
found not to be entitled pursuant to applicable law. Based on the information
currently available to the Company, management does not believe that the
indemnification of the officers and directors named as defendants in the
above-listed matters will have a material adverse effect on the financial
condition, results of operations or liquidity of the Company. However, the
actual effects of such indemnification on the Company cannot be finally
determined until the amount of such indemnification, if any, is fixed.

The Company is subject to other legal proceedings and claims which arise in the
ordinary course of its business. In the opinion of management, the amount of
ultimate liability, if any, in excess of applicable insurance coverage, is not
likely to have a material effect on the financial position of the Company.
However, as the outcome of litigation or other claims is difficult to predict,
significant changes in the estimated exposures could occur.

MANUFACTURING OPERATIONS

The Company's products are manufactured primarily at the Company's facilities
in the PRC and Mexico. The Company has ceased manufacturing at the Asheboro
facility as of March 31, 1999 and completely exited the facility as of June 30,
1999. Prior to the HPG acquisition, the majority of the Company's products were
manufactured by Durable, its wholly-owned Hong Kong subsidiary operating in Bao
An County, Guangdong Province of the People's Republic of China, which is
approximately 60 miles northwest of Central, Hong Kong. The Company has a
significant amount of its assets in the People's Republic, primarily consisting
of inventory, equipment and molds. The supply and cost of products, as well as
finished products, can be adversely affected, among other reasons, by changes
in foreign currency exchange rates, increased import duties, imposition of
tariffs, imposition of import quotas, interruptions in sea or air
transportation and political or economic changes. From time to time, the
Company explores opportunities to diversify its sourcing and/or production of
certain products to other low-cost locations or with other third parties or
joint venture partners in order to reduce its dependence on production in the
People's Republic and/or reduce Durable's dependence on the Company's existing
distribution base. However, at the present time, the Company intends to
continue its production in the People's Republic and Mexico.

The Mexican government exercises significant influence over many aspects of the
Mexican economy. Accordingly, the actions of the Mexican government concerning
the economy could have a significant effect on private sector entities in
general and the Company in particular. In addition, during the 1980s and 1990s,
Mexico experienced periods of slow or negative growth, high inflation,
significant devaluations of the peso and limited availability of foreign
exchange. As a result of the Company's reliance upon manufacturing facilities
in Mexico, economic conditions in Mexico could adversely affect the Company's
business, financial condition and results of operations.






                                      22
<PAGE>   23



ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's major market risk exposure is to changing interest rates, debt
obligations issued at a fixed rate and fluctuations in the currency exchange
rates. The Company's policy is to manage interest rate risk through the use of
a combination of fixed and floating rate instruments, with respect to both its
liquid assets and its debt instruments.

The Senior Credit Facilities accrue interest at variable rates; however, the
company has purchased interest rate protection for such loans in the form of
interest rate swaps. Based on the current amount of variable rate, as well as
underlying swaps, the exposure to interest rate risk is not material.
Fixed-rate debt obligations issued by the Company are not callable until July
31, 2003.

The Company is subject to foreign currency exchange rate risk relating to
receipts from customers and payments to suppliers in foreign currencies. As a
general policy, the Company hedges foreign currency commitments of future
payments and receipts by purchasing foreign currency-forward and option
contracts. As of September 30, 1999, the notional value of such derivatives was
approximately $67 million, with no significant unrealized gain or loss. The
majority of the Company's receipts and expenditures are contracted in U.S.
dollars, and the Company does not consider the market risk exposure relating to
currency exchange to be material at this time.










                                      23
<PAGE>   24






PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

                  See "Legal Proceedings" in Part I, Item 2 of this report.

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

         (a)      Exhibits

                  10.44    -  Employment agreement dated August 2, 1999 between
                              Windmere-Durable  Holdings, Inc. and
                              Harry Schulman. Filed herewith.
                  27.1     -  Financial Data Schedule (for S.E.C. use only)

         (b)      Reports on Form 8-K:

                  None







                                      24
<PAGE>   25


                                   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.

                           WINDMERE-DURABLE HOLDINGS, INC.
                          (Registrant)

November 12, 1999           By:         /s/      HARRY D. SCHULMAN
                                        --------------------------
                                                 Harry D. Schulman
                                                 Chief Operating Officer
                                                 (Duly authorized to sign on
                                                 behalf of the Registrant)



November 12, 1999           By:         /s/      TERRY L. POLISTINA
                                        ---------------------------
                                                 Terry L. Polistina
                                                 Senior Vice President - Finance
                                                 (Duly authorized to sign on
                                                 behalf of the Registrant)





                                      25
