SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM 10-Q

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

For the quarterly period                                       Commission File
ended September 30, 2000                                        Number 0-20001

                               VISTA EYECARE, INC.
              ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          GEORGIA                                          58-1910859
- --------------------------------                       --------------------
(State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                      Identification No.)

      296 Grayson Highway
      Lawrenceville, Georgia                               30045
- ----------------------------------------                 ----------
(Address of principal executive offices)                 (Zip Code)

  Registrant's telephone number, including area code:  (770) 822-3600

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes   X      No
                                              -----        -----

     The number of shares of Common Stock of the  registrant  outstanding  as of
November 10, 2000 was 21,179,103.

     The Exhibit Index is located at page 26.

                                              VISTA EYECARE, INC.

                                                FORM 10-Q INDEX

                                                                                                     Page of
                                                                                                     Form 10-Q
                                                                                                     ---------

PART I - FINANCIAL INFORMATION
- ------------------------------
                                                                                                         
ITEM 1.    FINANCIAL STATEMENTS

           Condensed Consolidated Balance Sheets -
           September 30, 2000 and January 1, 2000                                                           3

           Condensed Consolidated Statements of Operations -
           Three Months Ended  September 30, 2000 and October 2, 1999 and Nine
           Months Ended September 30, 2000 and October 2, 1999                                              5

           Condensed Consolidated Statements of Cash Flows -
           Nine Months Ended September 30, 2000 and October 2, 1999                                         6

           Notes to Condensed Consolidated Financial Statements                                             7

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                    15

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                        25

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

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                                                  26

                                                     PART I

                                             FINANCIAL INFORMATION

ITEM I FINANCIAL STATEMENTS

                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                     September 30, 2000 and January 1, 2000
                                    (In thousands except share information)

                                                                                      September 30,         January 1,
                                                                                           2000                 2000
                                                                                      --------------         ----------
                                                                                              (unaudited)
                                                                                                           
                     ASSETS

CURRENT ASSETS:
Cash and cash equivalents ......................................................          $   3,450           $   2,886
Accounts receivable ............................................................             13,289              10,416
       (net of allowance: 2000-$3,977 1999-$4,403)
Inventories ....................................................................             30,635              34,373
Other current assets (See Note 7) ..............................................              4,448               2,761
                                                                                          ---------           ---------
Total current assets ...........................................................          $  51,822           $  50,436
                                                                                          ---------           ---------

PROPERTY AND EQUIPMENT:
Equipment ......................................................................             48,337              57,750
Furniture and fixtures .........................................................             23,372              26,600
Leasehold improvements .........................................................             18,300              28,458
Construction in progress .......................................................                609               3,427
                                                                                          ---------           ---------
                                                                                             90,618             116,235
Less accumulated depreciation ..................................................            (59,046)            (62,329)
                                                                                          ---------           ---------

Net property and equipment .....................................................             31,572              53,906
                                                                                          ---------           ---------

OTHER ASSETS AND DEFERRED COSTS  (net of accumulated
amortization: 2000-$1,997; 1999-$1,500) ........................................              8,308               9,315

DEFERRED INCOME TAX ASSETS .....................................................                385                 385

GOODWILL AND OTHER INTANGIBLE ASSETS (net of accumulated
amortization:  2000-$2,524 ; 1999-$6,994) (See Note 4)..........................              2,080             106,177
                                                                                          ---------           ---------

                                                                                          $  94,167           $ 220,219
                                                                                          =========           =========

                                                       3

                                  LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

                                                                                                     
LIABILITIES NOT SUBJECT TO COMPROMISE:

CURRENT LIABILITIES:
Accounts payable (See Note 7) ..................................................          $   1,493           $  17,192
Accrued expenses and other current liabilities .................................             16,238              24,568
Current portion of long-term debt and capital leaseobligations .................               --                 1,098
Revolving credit facility and term loan ........................................             13,159              19,292
                                                                                          ---------           ---------

            Total current liabilities ..........................................             30,890              62,150
                                                                                          ---------           ---------

SENIOR NOTES  (net of discount: 1999-$1,253) ...................................               --               123,747

OTHER LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS .............................               --                 6,865
                                                                                          ---------           ---------

            Total liabilities not subject to compromise ........................             30,890             192,762

LIABILITIES SUBJECT TO COMPROMISE ..............................................            168,392                --

COMMITMENTS AND CONTINGENCIES ..................................................               --                  --

REDEEMABLE COMMON STOCK ........................................................               --                   900

SHAREHOLDERS' (DEFICIT) EQUITY:
Preferred stock, $1 par value; 5,000,000 shares authorized, none issued ........               --                  --
Common stock, $.01 par value; 100,000,000 shares authorized,
  21,179,103 shares issued and outstanding as of
  September 30, 2000 and January 1, 2000 .......................................                211                 211
Additional paid-in capital .....................................................             47,387              47,387
Retained deficit ...............................................................           (148,640)            (16,968)
Accumulated other comprehensive income .........................................             (4,073)             (4,073)
                                                                                          ---------           ---------

            Total shareholders' (deficit) equity ...............................           (105,115)             26,557
                                                                                          ---------           ---------

                                                                                          $  94,167           $ 220,219
                                                                                          =========           =========

     The accompanying notes are an integral part of these condensed consolidated financial statements

                                                       4

                                                VISTA EYECARE, INC.
                                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (In thousands except per share information)
                                                    (Unaudited)

                                                      Three Months Ended                   Nine Months Ended
                                                   ------------------------             ------------------------
                                                  September 30,     October 2,       September 30,       October 2,
                                                       2000            1999               2000               1999
                                                   ----------        ---------        ----------         ---------

NET SALES .................................        $  75,161         $ 83,262         $ 238,827         $ 252,428
COST OF GOODS SOLD ........................           36,209           37,474           109,689           111,307
                                                   ---------         --------         ---------         ---------

GROSS PROFIT ..............................           38,952           45,788           129,138           141,121
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE           41,648           45,355           129,831           130,738
IMPAIRMENT LOSS ON LONG-LIVED ASSETS ......             --               --               2,684              --
RESTRUCTURING EXPENSE .....................             --               --               1,601              --
                                                   ---------         --------         ---------         ---------

OPERATING INCOME/(LOSS)....................           (2,696)             433            (4,978)           10,383
INTEREST EXPENSE, NET (SEE NOTE 10)........              721            4,809             6,968            14,218
                                                   ---------         --------         ---------         ---------

LOSS BEFORE REORGANIZATION ITEMS AND TAXES            (3,417)          (4,376)          (11,946)           (3,835)
REORGANIZATION ITEMS ......................          114,520             --             118,900              --
                                                   ---------         --------         ---------         ---------

LOSS BEFORE TAXES AND EXTRAORDINARY ITEM ..         (117,937)          (4,376)         (130,846)           (3,835)
INCOME TAX EXPENSE/(BENEFIT) ..............             --             (1,396)             --              (1,010)
                                                   ---------         --------         ---------         ---------

NET LOSS BEFORE EXTRAORDINARY ITEM ........         (117,937)          (2,980)         (130,846)           (2,825)
EXTRAORDINARY LOSS, NET OF TAX ............             --               --                (827)             --
                                                   ---------         --------         ---------         ---------

NET LOSS ..................................        $(117,937)        $ (2,980)        $(131,673)        $  (2,825)
                                                   =========         ========         =========         =========

BASIC LOSS PER COMMON SHARE:
  LOSS BEFORE EXTRAORDINARY ITEM ..........            (5.60)           (0.14)            (6.21)            (0.13)
  EXTRAORDINARY LOSS ......................            (--)              --               (0.04)             --
                                                   ---------         --------         ---------         ---------

NET LOSS PER BASIC SHARE ..................        $   (5.60)        $  (0.14)        $   (6.25)        $   (0.13)
                                                   =========         ========         =========         =========

DILUTED LOSS PER COMMON SHARE:
  LOSS BEFORE EXTRAORDINARY ITEM ..........            (5.60)           (0.14)            (6.21)            (0.13)
  EXTRAORDINARY LOSS ......................            (--)              --               (0.04)              --
                                                   ---------         --------         ---------         ---------

NET LOSS PER DILUTED SHARE ................        $   (5.60)        $  (0.14)        $   (6.25)        $   (0.13)
                                                   =========         ========         =========         =========

The  accompanying  notes are an integral  part of these  condensed  consolidated financial statements.

                                                         5

                                                 VISTA EYECARE, INC.
                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Unaudited)

                                                                                             Nine Months Ended
                                                                                    --------------------------------
                                                                                    Sept. 30, 2000       Oct. 2,1999
                                                                                    --------------       -----------
                                                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ......................................................................        $(131,673)        $ (2,825)
                                                                                       ---------         --------

Adjustments to reconcile net loss to net cash provided by operating activities:
    Depreciation and amortization .............................................           14,887           14,254
    Provision for deferred income tax expense .................................             --             (1,222)
    Impairment of long-lived assets (See Note 4)...............................            2,684             --
    Restructuring expense (See Note 4) ........................................            1,601             --
    Reorganization items (See Note 4) .........................................          118,900             --
    Extraordinary items (See Note 6) ..........................................              827             --
     Changes in operating assets and liabilities:
          Receivables .........................................................           (3,932)          (3,075)
          Inventories .........................................................            3,703           (5,640)
          Other current assets ................................................             (687)          (1,397)
          Other assets ........................................................              489           (1,585)
          Accounts payable ....................................................            9,261            5,588
          Accrued expenses and other current liabilities ......................           (3,464)          (1,863)
                                                                                       ---------         --------

              Total adjustments ...............................................          144,269            5,060
                                                                                       ---------         --------

              Net cash provided by operating activities .......................           12,596            2,235
                                                                                       ---------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of property and equipment .............................             --                955
     Purchase of property and equipment .......................................           (4,279)         (10,522)
                                                                                       ---------         --------

              Net cash used in investing activities ...........................           (4,279)          (9,567)
                                                                                       ---------         --------

CASH FLOWS FROM FINANCING ACTIVITES:
     Repayments on revolving credit facility ..................................         (242,154)         (14,744)
     Advances on revolving credit facility ....................................          236,020           19,000
     Repayments on notes payable and capital leases ...........................             (901)          (1,167)
     Deferred financing costs .................................................             (718)            --
     Proceeds from issuance of common stock ...................................            (--)                56
                                                                                       ---------         --------

              Net cash (used in) provided by financing activities .............           (7,753)           3,145
                                                                                       ---------         --------

NET INCREASE (DECREASE) IN CASH ...............................................              564           (4,187)
CASH, beginning of period .....................................................            2,886            7,072
                                                                                       ---------         --------

CASH, end of period ...........................................................        $   3,450         $  2,885
                                                                                       =========         ========

The  accompanying  notes are an integral  part of these  condensed  consolidated financial statements.

                                                          6

                                            VISTA EYECARE, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  SEPTEMBER 30, 2000
                                   (Unaudited)

(1)  BASIS OF FINANCIAL STATEMENT PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared by Vista Eyecare,  Inc., (the "Company") pursuant to the rules and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted pursuant to such rules and  regulations.  Although  management  believes
that  the  disclosures  are  adequate  to make  the  information  presented  not
misleading,  it is suggested that these interim condensed consolidated financial
statements  be read in  conjunction  with  the  Company's  most  recent  audited
consolidated   financial  statements  and  notes  thereto.  In  the  opinion  of
management,  all adjustments  (which include only normal recurring  adjustments)
necessary  for a  fair  presentation  of  the  financial  position,  results  of
operations,  and cash flows for the interim  periods  presented  have been made.
Operating  results  for  the  interim  periods  presented  are  not  necessarily
indicative of the results that may be expected for the year ending  December 30,
2000.  Certain amounts in the October 2, 1999 condensed  consolidated  financial
statements  have  been  reclassified  to  conform  to  the  September  30,  2000
presentation.

(2)  BANKRUPTCY PROCEEDING AND GOING CONCERN MATTERS

Proceedings Under Chapter 11 of the Bankruptcy Code

     On April 5, 2000,  the Company and ten of its  subsidiaries  (collectively,
the "Debtors") filed voluntary petitions with the United States Bankruptcy Court
for the Northern  District of Georgia for  reorganization  under Chapter 11 (the
"Chapter 11 Cases").  The Debtors are currently  operating  their  businesses as
debtors-in-possession pursuant to the Bankruptcy Code.

        In the course of the Chapter 11 Cases,  we may assume or reject  certain
contracts  which were signed  before the date the Debtors  filed the  bankruptcy
petitions.  Contracts which are rejected will generate  unsecured  claims in the
Chapter 11 Cases ( See  Footnote 3). To assume  contracts,  we will have to cure
any outstanding  defaults. We believe that, as part of a plan of reorganization,
the  Company  will be able to assume the  contracts  it desires to  continue  in
effect.

         Because of our  operating  losses and the  charges we  recorded  in the
third  quarter  2000,  (See Footnote 4), we do not, as of the end of this fiscal
quarter, meet certain requirements  contained in some of our contracts.  We will
need to comply  with  these  requirements  in order to keep these  contracts  in
effect upon completion of the Chapter 11 Cases. We anticipate that, as part of a
plan of  reorganization,  we will meet these  requirements  upon  emergence from
Chapter 11.

                                       7

         The Debtors expect to file a reorganization  plan or plans that provide
for  emergence  from  bankruptcy  in  2001.  There  can be no  assurance  that a
reorganization plan or plans will be proposed by the Debtors or confirmed by the
Bankruptcy Court, or that any such plan(s) will be consummated. A plan of
reorganization  could result in holders of common  stock  receiving no value for
their  interests.  Because  of such  possibilities,  the value of the  Company's
common stock is highly speculative.

Going Concern Matters

     The accompanying  consolidated financial statements have been prepared on a
going concern basis of accounting and do not reflect any adjustments  that might
result if the Company is unable to continue as a going  concern.  The  Company's
recent losses and negative cash flows from operations, and the Chapter 11 Cases,
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The consolidated financial statements do not include any adjustments
relating to recoverability and classification of recorded asset amounts,  except
for the  impairment  of  long-lived  assets as  discussed  in Footnote 4, or the
amount and  classification  of  liabilities  that might be necessary  should the
Company be unable to continue as a going concern.  The ability of the Company to
continue as a going concern and appropriateness of using the going concern basis
is dependent upon, among other things:

     (i)  the  Company's   ability  to  comply  with  its   debtor-in-possession
          financing  agreement  (the "DIP  Facility")  (See Note 5 to  Condensed
          Consolidated Financial Statements);

     (ii) the   Company's  ability   to generate    sufficient  cash  flows from
          operations to meet its obligations;

     (iii)the  confirmation  of a plan of  reorganization  under the  Bankruptcy
          Code; and

     (iv) the  Company's  ability to achieve  profitable  operations  after such
          confirmation.

     Management  believes  that the DIP  Facility,  along with cash  provided by
operations,  will provide sufficient  liquidity to allow the Company to continue
as a going  concern.  However,  there can be no  assurance  that the  sources of
liquidity will be available or sufficient to meet the Company's needs.  Although
the Company is currently in  compliance  with the terms of the DIP  Facility,  a
continuation  of negative  sales and cash flow trends could cause the Company to
breach the EBITDA covenant.

     A plan of  reorganization  could  materially  change the amounts  currently
recorded in the consolidated  financial statements.  The consolidated  financial
statements do not give effect to any adjustments to the carrying value of assets
or amounts and  classifications  of  liabilities  that might be  necessary  as a
result of a reorganization plan.

(3)  ACCOUNTING DURING REORGANIZATION PROCEEDINGS

     Entering  the  reorganization  proceedings  does not  affect or change  the
application of generally accepted accounting  principles followed by the Company
in the preparation of its consolidated financial statements. During the pendency
of the Chapter 11 Cases, our consolidated  financial statements will distinguish
transactions  and events that are directly  associated  with the  reorganization
from the ongoing  operations  of the  business in  accordance  with the American
Institute of Certified Public Accountants' Statement of Position 90-7 -

                                       8

"Financial  Reporting by Entities in  Reorganization  under the Bankruptcy Code"
("SOP  90-7").  The  Company's   consolidated   balance  sheets  will  segregate
liabilities subject to compromise from liabilities not subject to compromise. In
addition, we will stop accruing for interest on unsecured debt until the Company
emerges from protection  under Chapter 11 of the Bankruptcy  Code, or it becomes
probable that we will pay these amounts as part of a plan of reorganization.

Liabilities Subject to Compromise

     "Liabilities subject to compromise" refers to liabilities incurred prior to
the  commencement  of the Chapter 11 Cases,  including  those  considered by the
Bankruptcy  Court to be  pre-petition  claims,  such as claims  arising out of a
rejection of a lease for real property.  These liabilities  consist primarily of
amounts  outstanding  under  long-term debt and also include  accounts  payable,
accrued interest, accrued restructuring costs, and other accrued expenses. These
amounts  represent  the  Company's  estimate of known or potential  claims to be
resolved  in the  Chapter  11  Cases.  Such  claims  remain  subject  to  future
adjustments.  Adjustments may result from (1)  negotiations;  (2) actions of the
Bankruptcy Court; (3) further  development with respect to disputed claims;  (4)
future rejection of additional  executory contracts or unexpired leases; (5) the
determination as to the value of any collateral  securing claims;  (6) proofs of
claim;  or (7)  other  events.  Payment  terms  for  these  amounts,  which  are
considered long-term liabilities at this time, will be established in connection
with the Chapter 11 Cases.

     The principal  categories of claims  classified as  liabilities  subject to
compromise in the Chapter 11 Cases are identified below: (amounts in thousands)

                                                                       September 30, 2000
                                                                       ------------------
                                                                          
       Accounts payable                                                       $ 25,486
       Accrued expenses                                                            527
       Provision for rejected contracts                                          3,189
       Senior notes, net of discount including $7,480 accrued interest         131,266
       Other long-term debt and capital lease obligations                        7,024
       Redeemable common stock                                                     900
                                                                              --------
                                                                              $168,392
                                                                              ========

     The  Company  has  received  approval  from  the  Bankruptcy  Court  to pay
pre-petition  and  post-petition  employee wages,  salaries,  benefits and other
employee obligations,  to pay vendors and other providers in the ordinary course
for goods and services received from April 5, 2000 and to honor customer service
programs,  including warranties and returns. These items are recorded as accrued
expenses not subject to compromise.

                                       9

(4)  REORGANIZATION ITEMS,  RESTRUCTURING  EXPENSES AND IMPAIRMENT OF LONG-LIVED
     ASSETS

General

     In the last quarter of 1999 and the first three  quarters of 2000,  we have
recorded charges relating to store closings, to impairments of long-lived assets
and to expenses incurred in the Chapter 11 Cases.  Generally accepted accounting
principles require different  presentations depending on whether we incurred the
cost before or after the filing of the Chapter 11 Cases.

Impairment of Fixed Assets and Restructuring Expenses

     We have recorded  charges for impairment of fixed assets and  restructuring
expenses in  connection  with stores  closed before the filing of the Chapter 11
Cases.  Emerging  Issues  Task Force Issue  94-03,  "Liability  Recognition  for
Certain Employee  Termination  Benefits to Exit an Activity  (Including  Certain
Costs Incurred in a  Restructuring)",  requires that we present these charges as
components of operating income.

     In connection  with stores closed after the filing of the Chapter 11 Cases,
we  have  recorded   charges  for  impairment  of  long-lived   assets  and  for
restructuring  expenses.  SOP 90-7  requires  that we present  these  charges as
reorganization items below operating income.

Summary of Restructuring Charges

         The table below  summarizes  charges for impairment of fixed assets and
restructuring expenses incurred in the fourth quarter 1999 and the first quarter
2000.  These charges were incurred before the Company began the Chapter 11 Cases
(amounts in thousands):

                                          Fourth Quarter 1999   First Quarter 2000
                                          -------------------   ------------------

       Impairment of fixed assets               $1,952                $2,684

       Restructuring expenses
         Provision for rejected leases          $ --                  $1,362
         Other store closing costs                --                     239
                                                ------                ------
         Restructuring expense                  $ --                  $1,601
                                                ======                ======

Summary of Reorganization Items

     Results for the third  quarter  include  charges which were  incurred after
the Company filed the Chapter 11 Cases.  Expenses related to the  reorganization
process and the Chapter 11 Cases are considered  reorganization items. The table
below summarizes these charges (amounts in thousands):

                                                   Three Months Ending       Nine Months Ending
                                                   September 30, 2000        September 30, 2000
                                                   ------------------        ------------------

       Impairment of goodwill                            $ 100,805                $ 100,805
       Impairment of fixed assets                           11,633                   11,966
       Provision for rejected leases                            85                    1,920
       Other store closing costs                               244                      662
       Professional fees                                     1,155                    2,311
       Retention bonus                                         564                    1,113
       Interest income on accumulated cash                     (43)                     (91)
       Other reorganization costs                               77                      214
                                                         ---------                ---------
                                                         $ 114,520                $ 118,900
                                                         =========                =========

                                       10

Impairment of Long-Lived Assets

     As a result of our Chapter 11 filing,  we are evaluating  various strategic
alternatives,  including  the  possible  sale or  disposition  of certain of the
Company's assets. Due to continuing  negative cash flows in the third quarter of
2000,  coupled with the possible sale or disposition of certain  Company assets,
we have  recorded  a noncash  charge of $100.8  million  for the  impairment  of
goodwill associated with the acquisition of Frame-n-Lens Optical, Inc., New West
Eyeworks Inc. and Midwest Vision Inc.  ("Acquired  Entities").  In addition,  we
recorded a noncash  charge of $10.6  million to reflect the  impairment of fixed
assets associated with the Acquired Entities

     The  Company  reached an  agreement  in  principle  with  Meijer,  Inc.  to
terminate  ten leases  governing  all of the  Company's  units located in Meijer
Thrifty Acre locations.  Pursuant to this agreement,  the Company will turn over
all of its Meijer  locations to Meijer,  Inc. by October 31, 2000,  but will pay
rent totaling $85,000 through January 2001.  Neither the Company nor Meijer will
receive any proceeds from the other party for the early termination. The Company
has recorded a noncash pre-tax charge of approximately $1.0 million in the third
quarter  related to the impairment of leasehold  improvements  and furniture and
fixtures in the Meijer locations.

     In the second  quarter of 2000,  the  Company  reached  an  agreement  with
Wal-Mart Stores,  Inc. to terminate its 72 leases governing all of the Company's
units located in Sam's Club locations.  Pursuant to this agreement,  the Company
turned over all such  locations to Wal-Mart  Stores by  September  1, 2000.  The
Company  received no  proceeds  from  Wal-Mart  for the early  termination,  and
Wal-Mart  will waive all claims for rent under the leases for the balance of the
original  lease term.  In the second  quarter of 2000,  the  Company  recorded a
noncash pre-tax charge of  approximately  $330,000  related to the impairment of
leasehold improvements and furniture and fixtures in the Sam's Club locations.

A summary of the impairment  charges  recorded in the third quarter 2000 follows
(amounts in thousands):

                      Impairment of goodwill:
                             Frame-n-Lens                 $ 38,318
                             New West Eyeworks              60,610
                             Midwest Vision                  1,877
                                                          --------
                    Total goodwill impairment             $100,805
                                                          ========

                    Impairment of fixed assets:
                             Frame-n-Lens                 $  4,792
                             New West Eyeworks               5,186
                             Midwest Vision                    668
                             Meijer Thrifty Acre               987
                                                          --------
                    Total fixed asset impairment          $ 11,633
                                                          ========

         We periodically  evaluate the carrying value of long-lived assets based
on the expected future undiscounted operating cash flows of the related business
unit. As part of the reorganization  process, we may decide to sell or otherwise
dispose  of assets for  amounts  other than  those  reflected  in the  Condensed
Consolidated  Financial  Statements,  which may result in further  impairment of
long-lived assets.

         In addition to the impairment of goodwill and fixed assets, the Company
recorded  adjustments to inventory of $1.1 million and to accounts receivable of
$0.5 million to adjust the carrying value to net realizable value. These charges
were included in cost of goods sold and SG&A expense, as appropriate.

                                       11

(5)  DEBTOR-IN-POSSESSION FINANCING

     On May 9, 2000,  the  Bankruptcy  Court  approved an order  permitting  the
Company to enter into a $25 million  debtor-in-possession  credit  facility with
Foothill  Capital  Corporation  (the "DIP  Facility").  The DIP Facility  (which
replaced the Company's  prior  secured  credit  facility  with Foothill  Capital
Corporation)  consists of a $12.5 million term loan and $12.5 million  revolving
credit facility.  The Company paid  professional  fees,  organization  fees, and
waiver fees of $500,000 to convert the previous Foothill credit facility to the
DIP  Facility.  As of September  30,  2000,  the Company had borrowed a total of
$13.2 million  (inclusive of the $12.5 million term loan portion)  under the DIP
Facility.

     The DIP Facility contains customary terms and conditions. It expires on May
31, 2001. The DIP Facility further provides that:

- -    The Company must maintain a rolling twelve month EBITDA of no less than $15
     million,  calculated prior to restructuring charges,  reorganization items,
     extraordinary losses and store impairment reserves.

- -    The $12.5 million term loan portion of the DIP Facility  bears  interest at
     15% per annum.

- -    Interest  rates on the  revolver  portion of the DIP  Facility are based on
     either  the Wells  Fargo  Bank,  N.A.  Base  Rate  plus 2% or the  Adjusted
     Eurodollar Rate plus 3.25%.

     Although the Company is currently in  compliance  with the terms of the DIP
Facility,  a continuation of negative sales and cash flow trends could cause the
Company to breach the EBITDA covenant.

(6)  EXTRAORDINARY ITEM

     The  Company  recorded  an  extraordinary  loss of  $827,000 as a result of
refinancing  the  Company's  previous  revolving  credit  facility in the second
quarter of 2000 (See Note 5 to  Condensed  Consolidated  Financial  Statements).
This refinancing necessitated the write-off of capitalized costs associated with
the previous credit facility. Because of the Company's decision to fully reserve
for the Company's 2000 tax benefit, the net tax effect on the extraordinary item
is zero.

(7)  ACCOUNTS PAYABLE

     As a result of the bankruptcy  proceedings,  many of the Company's  vendors
are  requiring  payment in  advance  of  delivery  of goods or  services.  As of
September 30, 2000, the Company had made  approximately $1.5 million of payments
in advance  which have been  presented in "Other  Current  Assets."

(8)  INCOME TAXES

     The Company  recorded a pretax loss of $117.9 million in the third quarter.
The resulting income tax benefit was approximately $6.5 million. The Company has
established a valuation allowance equal to the amount of the tax benefit.

(9)  EARNINGS PER COMMON SHARE

     Basic earnings (loss) per common share were computed by dividing net income
(loss) by the weighted  average number of common shares  outstanding  during the
year.  Diluted  earnings (loss) per common share were computed as basic earnings
per common share, adjusted for outstanding stock options that are dilutive.  The
following table sets forth basic and diluted  earnings per share for the periods
indicated (amounts in thousands except per share information).

                                       12

                                              VISTA EYECARE, INC.
                                 CONDENSED CONSOIDATED STATEMENTS OF OPERATIONS
                                  (In thousands except per share information)
                                                  (Unaudited)

                                                Three Months Ended                  Nine Months Ended
                                            --------------------------          -------------------------
                                             Sept. 30,         Oct. 2,           Sept. 30,          Oct. 2,
                                               2000             1999                2000             1999
                                            ---------         ---------           ---------        ---------

Loss before extraordinary item              $(117,937)        $ (2,980)        $  (130,846)       $    (2,825)
Extraordinary loss, net of tax                   --               --                  (827)              --
                                            ---------         --------         -----------         ----------

Net Loss                                    $(117,937)        $ (2,980)        $  (131,673)       $    (2,825)
                                            =========         ========         ===========         ==========

Weighted shares outstanding                    21,070           21,070              21,070             21,068

Basic loss per share:
  Earnings before extraordinary item            (5.60)           (0.14)              (6.21)             (0.13)
  Extraordinary loss, net of tax                 --               --                 (0.04)              --
                                            ---------         --------         -----------         ----------

Basic loss per share                        $   (5.60)        $  (0.14)        $     (6.25)    $       (0.13)
                                            =========         ========         ===========         ==========

Weighted shares outstanding                    21,070           21,070              21,070             21,068
Impact of dilutive options held by
  employees                                      --               --                  --                 --
                                            ---------         --------         -----------         ----------

Aggregate shares outstanding                $  21,070         $ 21,070        $     21,070     $       21,068

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

Diluted earnings per share:
  Earnings before extraordinary item            (5.60)           (0.14)              (6.21)             (0.13)
  Extraordinary loss, net of tax                 --               --                 (0.04)             --
                                            ---------         --------         -----------         ----------

Diluted loss per share                      $   (5.60)        $  (0.14)        $     (6.25)     $       (0.13)
                                            =========         ========         ===========         ==========

There are no outstanding  options with an exercise price below the average price
of the Company's common stock.

                                                      13

(10) SUPPLEMENTAL DISCLOSURE INFORMATION

     The following table sets forth inventory balances by classification:
(amounts in thousands)

                                      September 30, 2000      January 1, 2000
                                      ------------------      ---------------

                    Raw Material            $21,458               $24,408
                    Finished Goods            8,023                 8,804
                    Supplies                  1,154                 1,161
                                            -------               -------
                                            $30,635               $34,373
                                            =======               =======

         Since filing for protection under Chapter 11 of the Bankruptcy Code, we
have stopped accruing interest on unsecured debt.  Contractual interest was $5.1
million and $15.6 million for the quarter and nine months  ending  September 30,
2000,  respectively.  The following  table sets forth the components of interest
expense, net: (amounts in thousands)

                                                                   Three Months Ended                Nine Months Ended
                                                                -------------------------        -------------------------

                                                                 Sept. 30,        Oct. 2,        Sept. 30,        Oct. 2,
                                                                    2000            1999            2000            1999
                                                                  -------         -------         --------         --------
                                                                                                        
               Interest expense on debt and capital leases        $   576         $ 4,516         $  6,325         $ 13,433

               Purchase discounts on invoice payments                 (34)             (1)             (47)             (37)

               Finance fees and amortization of hedge and
                        swap agreements                               180             316              692              863

               Interest income                                   --               (17)              (3)             (70)

               Other                                                   (1)             (5)               1               29
                                                                  -------         -------         --------         --------
                                                                 $    721         $ 4,809         $  6,968         $ 14,218
                                                                 ========         =======         ========         ========

 This excludes interest income of $43,000 and $91,000 for the three and nine
     months  ended   September   30,  2000.   These   amounts  were  treated  as
     reorganization  items.  (See  Note 4 to  Condensed  Consolidated  Financial
     Statements.)

Supplemental cash flow information: (amounts in thousands)

                                                                   Nine Months Ended
                                                              --------------------------
                                                              Sept. 30,          Oct. 2,
                                                                2000               1999
                                                              -------            -------
                                                                             
                  Cash paid for
                           Income taxes                         $    --            $   495
                           Interest                               2,111              9,269
                           Restructuring expenses and
                                    reorganization items          4,725                 --

                                       14

(11)  REVENUE RECOGNITION

     The Company currently recognizes revenues and the related costs from retail
sales when it has received at least 50% of the payment.  Under Staff  Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements", revenue and the
related costs from retail sales may be recognized  only when the entire  payment
has been received. The SEC has delayed the implementation date of this
accounting  bulletin  until the fourth  quarter of fiscal  2000.  The Company is
evaluating the impact of SAB No. 101 and will apply this accounting bulletin and
the related  accounting  principles  to its  financial  statements in the fourth
quarter of 2000. We will report the impact as a cumulative  effect adjustment to
our  consolidated  financial  statements  resulting  from a change in accounting
principles as if the change had occurred on January 1, 2000.

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

Proceedings Under Chapter 11 of the Bankruptcy Code

     On April 5, 2000,  the Company and ten of its  subsidiaries  (collectively,
the "Debtors")  filed  voluntary  petitions  with the  Bankruptcy  Court for the
Northern District of Georgia for  reorganization  under Chapter 11 (the "Chapter
11  Cases").   The  Debtors  are  currently   operating   their   businesses  as
debtors-in-possession pursuant to the Bankruptcy Code.

        In the course of the Chapter 11 Cases,  we may assume or reject  certain
contracts  which were signed  before the date the Debtors  filed the  bankruptcy
petitions.  Contracts which are rejected will generate  unsecured  claims in the
Chapter 11 Cases ( See  Footnote 3). To assume  contracts,  we will have to cure
any outstanding  defaults. We believe that, as part of a plan of reorganization,
the  Company  will be able to assume the  contracts  it desires to  continue  in
effect.

         Because of our  operating  losses and the  charges we  recorded  in the
third  quarter  2000,  (See  Footnote  4  to  Condensed  Consolidated  Financial
Statements),  we do not,  as of the end of this  fiscal  quarter,  meet  certain
requirements  contained  in some of our  contracts.  We will need to comply with
these requirements in order to keep these contracts in effect upon completion of
the Chapter 11 Cases. We anticipate  that, as part of a plan of  reorganization,
we will meet these requirements upon emergence from Chapter 11.

     The Debtors expect to file a reorganization  plan or plans that provide for
emergence from bankruptcy in 2001.  There can,  however,  be no assurance that a
reorganization plan or plans will be proposed by the Debtors or confirmed by the
Bankruptcy  Court,  or that  any such  plan(s)  will be  consummated.  A plan of
reorganization  could result in holders of the common  stock  receiving no value
for their  interests.  Because  of such  possibilities,  the value of the common
stock is highly speculative.

     We cannot  predict the  outcome of the Chapter 11 Cases or their  effect on
the Company's business.  If the liabilities subject to compromise in the Chapter
11 Cases exceed the fair value of the assets,  unsecured claims may be satisfied
at less than 100% of their face value and the common  stock of the  Company  may
have no value.

                                       15

Condensed Consolidated Financial Statements

     The  Company's  Condensed   Consolidated  Financial  Statements  have  been
prepared on a going concern basis, which contemplates  continuity of operations,
realization  of assets and  liquidation of  liabilities  and  commitments in the
normal course of business.  The filing of the bankruptcy  petition,  the related
circumstances  and the  losses  from  operations  raise  substantial  doubt with
respect  to  the  Company's  ability  to  continue  as  a  going  concern.   The
appropriateness  of using the going concern basis is dependent upon, among other
things,  confirmation of a plan or plans of  reorganization,  future  profitable
operations  and the  ability to  generate  cash from  operations  and  financing
sources sufficient to meet obligations.

     As  a  result  of  the  filing  of  the   Chapter  11  Cases  and   related
circumstances,  realization of assets and  liquidation of liabilities is subject
to  significant  uncertainty.  While  under the  protection  of Chapter  11, the
Debtors  may sell or  otherwise  dispose  of  assets,  and  liquidate  or settle
liabilities,   for  amounts   other  than  those   reflected  in  the  Condensed
Consolidated  Financial  Statements.  Further, a plan or plans of reorganization
could  materially  change the  amounts  reported in the  accompanying  Condensed
Consolidated   Financial  Statements.   The  Condensed   Consolidated  Financial
Statements  do not include any  adjustments  relating to  recoverability  of the
value of recorded asset amounts,  except for the impairment of long-lived assets
as discussed  in Footnote 4, or the amounts and  classification  of  liabilities
that might be necessary as a consequence of a plan of reorganization.

RESULTS OF OPERATIONS

     The  Company's  results  of  operations  in any  period  are  significantly
affected by the number and mix of vision centers opened and operating during
such period.  As of September 30, 2000, the Company operated 735 vision centers,
versus 933 vision  centers as of  October  2, 1999.  In the third  quarter,  the
Company  terminated its 72 leases  governing all the Company's  units located in
Sam's  Clubs  locations  (See  Note  4  to  Condensed   Consolidated   Financial
Statements).  In addition,  the Company  reached an agreement in principle  with
Meijer,  Inc.,  to terminate ten leases  governing  all of the  Company's  units
located  in Meijer  locations  no later  than  October  31,  2000 (See Note 4 to
Condensed Consolidated  Financial  Statements).  The Company had also previously
this year, rejected,  or otherwise  terminated the leases for,  approximately 91
other vision centers.

THREE MONTHS ENDED  SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED OCTOBER 2,
1999.

CONSOLIDATED RESULTS

     NET SALES.  Net sales during the current period  decreased to $75.2 million
from $83.3 million in the period a year ago. The sales decline was  attributable
to the following reasons:

- -    In the third  quarter of fiscal 2000,  the Company  closed all of its Sam's
     Club  locations  which,  in the third  quarter of 1999,  had  generated  $6
     million in sales.  These vision centers generated $1.2 million in net sales
     in the third quarter 2000.

- -    The Company operated approximately 97 fewer free-standing vision centers in
     the  third  quarter  of 2000  than in the  comparable  period  a year  ago.
     Additionally, the Company's remaining free-standing vision centers recorded
     comparable store sales of negative 12.5% in the third quarter.

                                       16

     Net sales for stores open more than one year for the domestic core business
were flat compared to levels recorded in the comparable period of a year ago.

     GROSS PROFIT. Gross profit decreased to $39.0 million in the current period
from $45.8 million in the comparable period a year ago. This decrease was due to
the following:

- -    A reduction  in sales caused by the closure of all of the  Company's  Sam's
     Club  locations,  as  well  as the  operation  of  approximately  97  fewer
     free-standing locations, and the negative comparable store sales registered
     by the remaining free-standing vision centers acquired by the Company.

- -    A sales shift from  eyeglasses  to contact  lenses  caused by contact  lens
     promotions in the  free-standing  vision centers.  Eyeglasses have a higher
     margin than do contact lenses.

- -    A charge of approximately $1.1 million to adjust inventory at the Company's
     free-standing  stores  to its net  realizable  value ( see  "Reorganization
     Items, Restructuring Expenses and Impairment of Long-lived Assets").

- -    A  reduction  in vendor  promotional  monies  and  independent  optometrist
     revenue from the amounts received a year ago.

     Gross profit as a percentage  of sales  decreased  from 55.0% a year ago to
51.8 % in the current period.  In addition to the reasons  described  above, the
decrease can also be attributed to the following:

- -    A loss of  efficiency in the Fullerton Lab caused by the decrease in volume
     as a result of declining sales levels in the Company's free-standing vision
     centers as well as lower volume resulting from closed stores.

- -    A  decline  in  average  sales  per  store  recorded  by the  free-standing
     operations caused rent as a percentage of net sales to increase and thereby
     reduced margin as a percent of net sales.

     SELLING,   GENERAL,  AND  ADMINISTRATIVE  EXPENSE  ("SG&A  expense").  SG&A
expense,  which includes both store operating expenses and home office overhead,
decreased  from  $45.4  million  in the  comparable  period  a year ago to $41.7
million in the current period.

The principal reasons for the decrease are as follows:

- -    Payroll  savings  of $2.9  million  from  the  closure  of the  Sam's  Club
     locations and approximately 97 free-standing locations.

- -    A $1.0 million  reduction in  advertising  costs in the third  quarter 2000
     versus the same  period a year ago.

- -    Home Office  savings of $0.8  million  primarily  related to a reduction in
     headcount, as well as travel and other expenses.

These savings were partially offset by:

- -    An increase in SG&A expense at host locations due to new store openings.

- -    A charge of approximately $0.5 million to adjust accounts receivable at the
     Company's free-standing stores to its net realizable value.

- -    An increase in payroll for optometrists due to an increase in the number of
     optometrists employed by the Company.

                                       17

     As a  percentage  of net sales,  SG&A expense  increased  from 54.5% in the
comparable  period a year ago to 55.4% in the current period.  This increase was
due primarily to the sales shortfall from the Acquired  Entities and the closure
of the Sam's Club and approximately 97 free-standing locations.

     OPERATING LOSS.    Operating  results  for  the current  period,  prior  to
reorganization  items and the impairment of long-lived  assets,  decreased to an
operating  loss of $2.7  million  from  operating  income of $0.4 million in the
comparable period a year ago.

     INTEREST  EXPENSE.  Interest  expense  decreased from $ 4.8 million to $0.7
million in the current period. Because of the filing of the Chapter 11 Cases, we
have stopped  accruing for interest on unsecured debt until the Company  emerges
from Chapter 11 of the Bankruptcy  Code, or it becomes probable that the Company
will pay these  amounts  as part of a plan of  reorganization.  See  "Accounting
During Reorganization  Proceedings."  Contractual interest for the third quarter
of 2000 was $5.1 million.  In addition,  interest  expense  excludes  $43,000 of
interest income which has been reflected as a reorganization item.

REORGANIZATION ITEMS,  RESTRUCTURING  EXPENSES AND IMPAIRMENT OF LONG-LIVED
ASSETS.

General

     In the last quarter of 1999 and the first three  quarters of 2000,  we have
recorded charges relating to store closings,  to impairment of long-lived assets
and to expenses incurred in the Chapter 11 Cases.  Generally accepted accounting
principles require different  presentations depending on whether we incurred the
cost before or after the filing of the Chapter 11 Cases.

Impairment of Fixed Assets and Restructuring Expenses

     We have recorded  charges for impairment of fixed assets and  restructuring
expenses in  connection  with stores  closed before the filing of the Chapter 11
Cases.  Emerging  Issues  Task Force Issue  94-03,  "Liability  Recognition  for
Certain Employee  Termination  Benefits to Exit an Activity  (Including  Certain
Costs Incurred in a  Restructuring)",  requires that we present these charges as
components of operating income.

     In connection  with stores closed after the filing of the Chapter 11 Cases,
we have recorded  charges for  impairment of fixed assets and for  restructuring
expenses.  All expenses of this nature incurred in the second and third quarters
of 2000 have been presented as reorganization items, below operating income.

Summary of Restructuring Charges

         The table below  summarizes  charges for impairment of fixed assets and
restructuring expenses incurred in the fourth quarter 1999 and the first quarter
2000.  These charges were incurred before the Company began the Chapter 11 Cases
(amounts in thousands):

                                                  Fourth Quarter 1999    First Quarter 2000
                                                  -------------------    ------------------
                                                                         
               Impairment of fixed assets               $1,952                 $2,684

               Restructuring expense
                 Provision for rejected leases          $ --                   $1,362
                 Other store closing costs                --                      239
                                                        ------                 ------
                                                        $ --                   $1,601
                                                        ======                 ======

                                       18

         Impairment and  restructuring  charges incurred in the second and third
quarters of 2000 are  considered  reorganization  items and are presented  below
operating income.

Summary of Reorganization Items

     Results  for the  second  and third  quarters  include  charges  which were
incurred after the Company filed the Chapter 11 Cases.  Expenses  related to the
reorganization  process and the Chapter 11 Cases are  considered  reorganization
items. The table below summarizes these charges (amounts in thousands):

                                                         Second Quarter       Third Quarter
                                                              2000                 2000
                                                         ----------------     --------------

                Impairment of goodwill                       $    --             $ 100,805
                Impairment of fixed assets                         333              11,633
                Provision for rejected leases                    1,834                  85
                Other store closing costs                          419                 244
                Professional fees                                1,156               1,155
                Retention bonus                                    549                 564
                Interest income on accumulated cash                (48)                (43)
                Other reorganization costs                         136                  77
                                                             ---------           ---------
                                                             $   4,379           $ 114,520
                                                             =========           =========

Impairment of Long-Lived Assets

     As a result of our Chapter 11 filing,  we are evaluating  various strategic
alternatives,  including  the  possible  sale or  disposition  of certain of the
Company's assets. Due to continuing  negative cash flows in the third quarter of
2000,  coupled with the possible sale or disposition of certain  Company assets,
we have  recorded  a noncash  charge of $100.8  million  for the  impairment  of
goodwill associated with the acquisition of Frame-n-Lens Optical, Inc., New West
Eyeworks Inc. and Midwest Vision, Inc. In addition, we recorded a noncash charge
of $10.6 million to reflect the impairment of fixed assets  associated  with the
Acquired Entities.

     The  Company  reached an  agreement  in  principle  with  Meijer,  Inc.  to
terminate  ten leases  governing  all of the  Company's  units located in Meijer
Thrifty Acre locations.  Pursuant to this agreement,  the Company will turn over
all of its Meijer  locations to Meijer,  Inc. by October 31, 2000,  but will pay
rent totaling $85,000 through January 2001.  Neither the Company nor Meijer will
receive any proceeds from the other party for the early termination. The Company
has recorded a noncash  pre-tax charge of  approximately  1.0 million related to
the  impairment  of leasehold  improvements  and  furniture  and fixtures in the
Meijer locations.

     In the second  quarter of 2000,  the  Company  reached  an  agreement  with
Wal-Mart Stores,  Inc. to terminate its 72 leases governing all of the Company's
units located in Sam's Club locations.  Pursuant to this agreement,  the Company
turned over all such  locations to Wal-Mart  Stores by  September  1, 2000.  The
Company  received no  proceeds  from  Wal-Mart  for the early  termination,  and
Wal-Mart  will waive all claims for rent under the leases for the balance of the
original  lease term.  In the second  quarter of 2000,  the  Company  recorded a
noncash pre-tax charge of  approximately  $330,000  related to the impairment of
leasehold  improvements  and furniture and fixtures in the Sam's Club locations.
(See Note 4 to Condensed Consolidated Financial Statements.)

                                       19

     A summary of the  impairment  charges  recorded in the third  quarter  2000
follows (amounts in thousands):

                 Impairment of goodwill:
                        Frame-n-Lens                 $ 38,318
                        New West Eyeworks              60,610
                        Midwest Vision                  1,877
                                                     --------
               Total goodwill impairment             $100,805
                                                     ========

               Impairment of fixed assets:
                        Frame-n-Lens                 $  4,792
                        New West Eyeworks               5,186
                        Midwest Vision                    668
                        Meijer Thrifty Acre               987
                                                     --------
               Total fixed asset impairment          $ 11,633
                                                     ========

     We periodically  evaluate the carrying value of long-lived  assets based on
the expected future  undiscounted  operating cash flows of the related  business
unit. As part of the reorganization  process, we may decide to sell or otherwise
dispose  of assets for  amounts  other than  those  reflected  in the  Condensed
Consolidated  Financial  Statements,  which may result in further  impairment of
long-lived assets.

     In addition to the  impairment  of goodwill and fixed  assets,  the Company
recorded  adjustments to inventory of $1.1 million and to accounts receivable of
$0.5 million to adjust the carrying value to net realizable value. These charges
were included in cost of goods sold and SG&A expense, as appropriate.

     BENEFIT FOR INCOME TAXES.  We recorded a pre-tax  operating  loss of $117.9
million versus a loss of $4.4 million in the prior period.  The resulting income
tax benefit was  approximately  $6.5  million.  We have  established a valuation
allowance equal to the amount of the tax benefit.

     NET LOSS.  The Company  posted a net loss of $117.9  million or $(5.60) per
share,  versus a net loss of $3.0 million or $(0.14) per share in the comparable
period a year ago.

NINE MONTHS ENDED  September  30, 2000  COMPARED TO NINE MONTHS ENDED OCTOBER 2,
1999.

     NET SALES.  Net sales  during the current  nine month  period  decreased to
$238.8  million from $252.4 million for the same period a year ago. The decrease
in net sales was the result of the following factors:

- -    In the third  quarter of fiscal 2000,  the Company  closed all of its Sam's
     Club locations which, in the first nine months of 1999, had generated $18.8
     million in sales. These vision centers generated $10.4 million in net sales
     in the first nine months of 2000.

- -    The  Company  rejected,   or  otherwise   terminated  the  leases  for,  97
     free-standing   vision   centers  in  the  first   nine   months  of  2000.
     Additionally,   the  Company's   free-standing   vision  centers   recorded
     comparable store sales of negative 15.9% in the first nine months of 2000.

- -    This  decrease  in net sales  was  partially  offset  by sales  from 10 new
     Wal-Mart stores which have opened since the third quarter of 1999.

     GROSS PROFIT. For the current nine month period,  gross profit decreased to
$129.1 million from $141.1  million in the prior nine months.  This decrease was
due to the following:

                                       20

- -    A reduction  in sales caused by the closure of all of the  Company's  Sam's
     Club  locations,  as  well  as the  operation  of  approximately  97  fewer
     free-standing locations, and the negative comparable store sales registered
     by the vision centers acquired by the Company.

- -    A sales shift from  eyeglasses  to contact  lenses  caused by contact  lens
     promotions in the  free-standing  vision centers.  Eyeglasses have a higher
     margin than do contact lenses.

- -    A charge of approximately $1.1 million to adjust inventory at the Company's
     free-standing stores to its net realizable value.

- -    A  reduction  in vendor  promotional  monies  and  independent  optometrist
     revenue from the amounts received a year ago.

     Gross profit as a  percentage  of sales  decreased  from 55.9% in the prior
nine  months  to  54.1%  in  the  current  nine  months.   In  addition  to  the
afore-mentioned reasons, this decrease can also be attributed to the following:

- -    A loss of  efficiency in the Fullerton Lab caused by the decrease in volume
     as a result of declining sales levels in the Company's free-standing vision
     centers.

- -    Declining sales recorded by the  free-standing  operations caused rent as a
     percentage of net sales to increase and thereby reduced margin as a percent
     of net sales.

     SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE ("SG&A expense"). SG&A expense
(which  includes  both  store  operating  expenses  and  home  office  overhead)
decreased  from $130.7  million for the nine  months  ending  October 2, 1999 to
$129.8 million for the current nine months period.

In the current nine months, we experienced improvements in SG&A expense as noted
below:

- -    Payroll   savings  from  the  closure  of  the  Sam's  Club  locations  and
     approximately  97  free-standing   locations  totaling  approximately  $5.3
     million.

- -    A $1.1 million  reduction in  advertising  spending in the third quarter of
     2000 versus the third quarter of 1999.

These improvements were partially offset by:

- -    Increased  payroll  costs of  approximately  $3.0  million to the  Wal-Mart
     locations  primarily as the result of 10 new store openings since the third
     quarter of 1999.

- -    An increase in payroll for optometrists due to an increase in the number of
     optometrists employed by the Company.

- -    A charge of approximately $0.5 million to adjust accounts receivable at the
     Company's  free-standing  stores to its net realizable value.

- -    An increase in reserves for managed  care  processing  fees and  collection
     costs versus the same period a year ago.

     As a  percentage  of net  sales,   SG&A  expense  increased to 54.4% in the
current  nine months,  from 51.8% for the prior nine months.  In addition to the
reasons  described  above,  the percentage  increase was due to low sales levels
recorded at the vision centers acquired from Frame-n-Lens and New West.

                                       21

     RESTRUCTING  EXPENSE  AND  IMPAIRMENT  OF FIXED  ASSETS.  The  table  below
summarizes  charges for  impairment of fixed assets and  restructuring  expenses
incurred in the fourth  quarter 1999 and the first quarter  2000.  These charges
were  incurred  before  the  Company  began the  Chapter  11 Cases  (amounts  in
thousands):

                                            Fourth Quarter 1999    First Quarter 2000
                                            -------------------    ------------------
                                                                   
          Impairment of fixed assets               $1,952                $2,684

          Restructuring expense
            Provision for rejected leases          $ --                  $1,362
            Other store closing costs                --                     239
                                                   ------                -------
                 Restructuring expense             $ --                  $1,601
                                                   ======                ======

     OPERATING LOSS.  Operating  results  for the  current nine months decreased
to a loss  of $5.0  million  from  operating  income  of  $10.4  million  in the
comparable period a year ago.

     INTEREST EXPENSE. Our interest expense decreased from $14.2 million to $7.0
million because we stopped  accruing  interest for unsecured debt at the time we
filed the Chapter 11 Cases. See "Accounting During Reorganization  Proceedings."
Contractual  interest  for the nine months  ended  September  30, 2000 was $15.6
million. In addition, interest expense excludes $91,000 of interest income which
has been reflected as a reorganization item.

         REORGANIZATION  ITEMS. Results for the nine months ending September 30,
2000 include  charges which were incurred after the Company filed the Chapter 11
Cases.  Expenses related to the reorganization  process and the Chapter 11 Cases
are considered  reorganization  items.  The table below summarizes these charges
(amounts in thousands):
                                                   Nine Months Ending
                                                   September 30, 2000
                                                   ------------------

          Impairment of goodwill                        $ 100,805
          Impairment of fixed assets                       11,966
          Provision for rejected leases                     1,920
          Other store closing costs                           662
          Professional fees                                 2,311
          Retention bonus                                   1,113
          Interest income on accumulated cash                 (91)
          Other reorganization costs                          214
                                                        ---------
                                                        $ 118,900
                                                        =========

     INCOME TAXES. We recorded a pre-tax operating loss of $130.8 million in the
current  period  versus a pre-tax loss of $3.8 million in the  comparable  prior
period.  The  resulting  income  tax  benefit  in 2000 was  approximately  $11.5
million.  We have  established a valuation  allowance equal to the amount of the
tax benefit.

     NET LOSS. We generated a net loss of $131.7 million,  or $(6.25) per share,
as  compared  to a net  loss  of $2.8  million  or  ($0.13)  per  share,  in the
comparable period a year ago.

                                       22

ACCOUNTING DURING REORGANIZATION PROCEEDINGS

     Entering  the  reorganization  proceeding  does not  affect or  change  the
application of generally accepted accounting  principles followed by the Company
in the preparation of its consolidated financial statements. During the pendency
of the Chapter 11 Cases, our consolidated  financial statements will distinguish
transactions  and events that are directly  associated  with the  reorganization
from the ongoing  operations  of the  business in  accordance  with the American
Institute  of  Certified  Public  Accountants'  Statement  of  Position  90-7  -
"Financial  Reporting by Entities in  Reorganization  under the Bankruptcy Code"
("SOP  90-7").  The  Company's   consolidated   balance  sheets  will  segregate
liabilities subject to compromise from liabilities not subject to compromise. In
addition,  we have stopped  accruing  for  interest on unsecured  debt until the
Company emerges from protection  under Chapter 11 of the Bankruptcy  Code, or it
becomes  probable  that  we  will  pay  these  amounts  as  part  of a  plan  of
reorganization.

Liabilities Subject to Compromise

     "Liabilities subject to compromise" refers to liabilities incurred prior to
the  commencement  of the Chapter 11 Cases,  including  those  considered by the
Bankruptcy  Court to be  pre-petition  claims,  such as claims  arising out of a
rejection of a lease for real property.  These liabilities  consist primarily of
amounts  outstanding  under  long-term debt and also include  accounts  payable,
accrued interest, accrued restructuring costs, and other accrued expenses. These
amounts  represent  the  Company's  estimate of known or potential  claims to be
resolved  in the  Chapter  11  Cases.  Such  claims  remain  subject  to  future
adjustments.  Adjustments may result from (1)  negotiations;  (2) actions of the
Bankruptcy Court; (3) further  development with respect to disputed claims;  (4)
future rejection of additional  executory contracts or unexpired leases;  (5)the
determination as to the value of any collateral  securing claims;  (6) proofs of
claim;  or (7)  other  events.  Payment  terms  for  these  amounts,  which  are
considered long-term liabilities at this time, will be established in connection
with the Chapter 11 Cases.

     The principal  categories of claims  classified as  liabilities  subject to
compromise in the Chapter 11 Cases are identified below: (Amounts in thousands.)

                                                                                September 30, 2000
                                                                                ------------------
                                                                                   
             Accounts payable                                                         $ 25,486
             Accrued expenses                                                              527
             Provision for rejected contracts                                            3,189
             Senior notes, net of discount including $7,480 accrued interest           131,266
             Other long-term debt and capital lease obligations                          7,024
             Redeemable common stock                                                       900
                                                                                      --------
                                                                                      $168,392
                                                                                      ========

     The  Company  has  received  approval  from  the  Bankruptcy  Court  to pay
pre-petition  and  post-petition  employee wages,  salaries,  benefits and other
employee obligations,  to pay vendors and other providers in the ordinary course
for goods and services received from April 5, 2000 and to honor customer service
programs,  including warranties and returns. These items are recorded as accrued
expenses not subject to compromise.

                                       23

LIQUIDITY AND CAPITAL RESOURCES

     Our capital needs have been for operating expenses,  capital  expenditures,
acquisitions  and interest  expense.  Our sources of capital have been cash flow
from operations and borrowings under our credit facilities.

     In October 1998, we issued our $125 million notes due 2005 to help fund the
acquisition of  Frame-n-Lens  Optical,  Inc. and New West  Eyeworks,  Inc. These
notes bear  interest of 12.75% and were issued  pursuant to an  indenture  which
contains a variety of customary  provisions and restrictions.  Interest payments
are due on April 15 and  October 15 of each year.  The  Company did not make the
interest  payment due on April 15,  2000.  Amounts due under the  indenture  are
unsecured  claims in the Chapter 11 Cases,  and are  classified  as  liabilities
subject  to  compromise.   (See  Note  3  to  Condensed  Consolidated  Financial
Statements.)

     On April 5, 2000,  the Debtors filed the Chapter 11 Cases.  On May 9, 2000,
the Bankruptcy  Court  approved an order  permitting the Company to enter into a
$25  million   debtor-in-possession   credit  facility  with  Foothill   Capital
Corporation (the "DIP Facility"). The DIP Facility (which replaced the Company's
prior secured credit facility) consists of a $12.5 term loan and $12.5 revolving
credit  facility.  As of September 30, 2000, the Company had borrowed a total of
$13.2 million  (inclusive of the $12.5 million term loan portion)  under the DIP
Facility.

     The DIP Facility contains customary terms and conditions. It expires on May
31, 2001. The DIP Facility further provides that:

- -    The Company must maintain a rolling twelve month EBITDA of no less than $15
     million,  calculated prior to restructuring charges,  reorganization items,
     extraordinary losses and store impairment reserves.

- -    The $12.5 million term loan portion of the DIP Facility  bears  interest at
     15% per annum.

- -    Interest  rates on the  revolver  portion of the DIP  Facility are based on
     either  the Wells  Fargo  Bank,  N.A.  Base  Rate  plus 2% or the  Adjusted
     Eurodollar Rate plus 3.25%.

     The Company  believes  the DIP  Facility  should  provide it with  adequate
liquidity to conduct its  operations  while it prepares a  reorganization  plan.
However, the Company's liquidity,  capital resources,  results of operations and
ability to continue as a going  concern are subject to risks and  uncertainties.
Although the Company currently in compliance with the terms of the DIP Facility,
a continuation of negative sales and cash flow trends could cause the Company to
breach the EBITDA covenant.

     We expect  to  complete  a plan of  reorganization  in 2001.  The plan will
likely  provide for the  conversion of debt into equity.  We do not know whether
the plan will be approved or, if it is approved, whether it will succeed.
If the Company is  successful  in  restructuring  its debt  obligations  and its
equity, the Company may utilize and / or trigger  limitations on certain tax net
operating loss carryforwards.

     We do not  plan to open  additional  Wal-Mart  vision  centers  during  the
remainder  of 2000.  Currently,  one  vision  center is under  construction  and
scheduled to open in 2001, and we may open up to three additional vision centers
in 2001 dependent upon liquidity,  construction schedules and other constraints.
For each of our new vision  centers,  we typically  spend  between  $100,000 and
$160,000 for fixed assets and approximately  $25,000 for inventory.  In general,
free-standing  locations  are more costly than leased  locations.  We also spend
approximately $20,000 for pre-opening costs.

                                       24

RISK FACTORS

     Any expectations, beliefs, and other non-historical statements contained in
this Form 10-Q are forward-looking  statements within the meaning of the Private
Securities Litigation Reform Act of 1995.  Forward-looking  statements represent
the Company's  expectations or belief  concerning  future events,  including the
following:   any  statements  regarding  future  sales  levels,  any  statements
regarding the continuation of historical  trends,  and any statements  regarding
the Company's liquidity.  Without limiting the foregoing,  the words "believes,"
"anticipates,"  "plans,"  "expects,"  and similar  expressions  are  intended to
identify  forward-looking  statements.  With  respect  to  such  forward-looking
statements  and others which may be made by, or on behalf of, the  Company,  the
factors  described as "Risk  Factors" in the  Company's  Report on Form 10-K for
1999 could materially affect the Company's actual results.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market Risk

     Market risk is the potential change in an instrument's value caused by, for
example,  fluctuations in interest and currency  exchange  rates.  The Company's
primary market risk exposures are interest rate risk and the risk of unfavorable
movements  in  exchange  rates  between the U.S.  dollar and the  Mexican  peso.
Monitoring and managing these risks is a continual process carried out by senior
management,  which reviews and approves the Company's risk management  policies.
We  manage  market  risk on the  basis of an  ongoing  assessment  of  trends in
interest  rates,  foreign  exchange  rates,  and economic  developments,  giving
consideration  to possible  effects on both total return and reported  earnings.
The Company's  financial advisors,  both internal and external,  provide ongoing
advice regarding trends that affect management's assessment.

Interest Rate Risk

     The Company  borrows money under our credit  facility at variable  interest
rates. We therefore incur the risk of increased interest costs if interest rates
rise.

     In 1998, in  anticipation  of the issuance of our senior notes,  we entered
into three  anticipatory  hedging  transactions  with a notional  amount of $100
million.  The interest  rates on these  instruments  were tied to U.S.  Treasury
securities  and ranged from 5.43% to 5.62%.  We settled these  transactions  for
approximately  $4.6  million  in  September  1998  with  $0.6  million  cash and
additional  borrowings  of $4.0  million.  The  settlement  costs are treated as
deferred financing costs and are amortized over the life of the notes.

Foreign Exchange Rate Risk

     Historically,  Mexico qualified as a highly inflationary  economy under the
provisions  of SFAS No. 52 -- Foreign  currency  Translation.  Consequently,  in
1997, the financial  statements of the Mexico  operation were reassured with the
U.S. dollar as the functional currency.  Since 1997, we have recorded immaterial
losses  because of changes in foreign  currency  rates  between the peso and the
U.S. dollar.

                                       25

                                     PART II
                                OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits.

               The  following  exhibits are filed  herewith or  incorporated  by
          reference:

                                                                                 Exhibit Number
                                                                                 --------------
                                                                                   
                     Amended and Restated Articles of Incorporation                   3.1*

                     Amended and Restated Bylaws                                      3.2**

                     Form of Common Stock Certificate                                 4.1***

                     Financial Data Schedule                                          27****

                  *Incorporated  by  reference to the  Company's  Form 8-K filed
                  with Commission on January 6, 1999.

                  **Incorporated  by  reference  to the  Company's  Registration
                  Statement on Form S-1,  registration  number  33-46645,  filed
                  with the Commission on March 25, 1992, and amendments thereto.

                  ***Incorporated  by  reference to the  Company's  Registration
                  Statement on Form 8-A filed with the Commission on January 17,
                  1997.

                  ****Filed with this Form 10-Q.

(b)      Reports on Form 8-K.

                  None

                                   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.

                                          VISTA EYECARE, INC.

                                          By:     /s/ Angus C. Morrison
                                                  ------------------------
                                                  Senior Vice President
                                                  Chief Financial Office

                                          By:     /s/ Timothy W. Ranney
                                                  -------------------------
                                                  Chief Accounting Officer

                                                  November 20, 2000