<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15 (d)
                    of the Securities Exchange Act of 1934


For the quarterly period ended June 30, 1998  Commission file number 1-5951


                                CMI CORPORATION
                      -----------------------------------
            (Exact name of registrant as specified in its charter)


               Oklahoma                                  73-0519810
       ------------------------             ------------------------------------
       (State of Incorporation)             (I.R.S. Employer Identification No.)



   I-40 & Morgan Road, P.O. Box 1985
        Oklahoma City, Oklahoma                            73101
----------------------------------------                ----------
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code:  (405) 787-6020



     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
    ---     ---

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

Voting Class A Common Stock Par Value $.10 and              
Voting Common Stock Par Value $.10                          21,512,005
----------------------------------------------  --------------------------------
           (Title of each class)                (Outstanding at August 10, 1998)



                                   -1 of 13-
<PAGE>
 
                                CMI CORPORATION
                                     Index



                                                                            Page
                                                                            ----

PART I.   Financial Information
 
          Condensed Consolidated Balance Sheets -
               June 30, 1998 and December 31, 1997 and
               June 30, 1997                                                   3
 
          Condensed Consolidated Statements of Operations -
               Three Months and Six Months Ended June 30, 1998
               and 1997                                                        4
 
          Condensed Consolidated Statements of Changes in Common
               Stock and Other Capital -
               Six Months Ended June 30, 1998 and the Years Ended
               December 31, 1997 and December 31, 1996                         5
 
          Condensed Consolidated Statements of Cash Flows -
               Six Months Ended June 30, 1998 and 1997                         6
 
          Notes to Condensed Consolidated Financial
               Statements                                                      7
 
          Management's Discussion and Analysis of
               Financial Condition and Results of Operations                  10
 
 
PART II.  Other Information
 
          Item 1.  Legal Proceedings                                          13
 
          Item 2.  Changes in Securities                                      13
 
          Item 3.  Defaults Upon Senior Securities                            13
 
          Item 4.  Submission of Matters to a Vote of                         13
                   Security Holders
 
          Item 5.  Other Information                                          13
 
          Item 6.  Exhibits and Reports on Form 8-K                           13
 
Signatures                                                                    13
 


                                    -2 of 13-
<PAGE>
 
                        PART I - FINANCIAL INFORMATION

                       CMI CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

                            (dollars in thousands)

<TABLE>
<CAPTION>
                                               June 30    December 31   June 30
                                                1998         1997        1997    
                                             (Unaudited)       *      (Unaudited)
                                             -----------  ----------  -----------
<S>                                          <C>          <C>         <C>        
 Current assets:
  Cash & cash equivalents                     $  9,182       7,131       16,465
  Receivables, net                              35,299      26,917       22,631
  Inventories                                                         
   Finished equipment                           23,124      28,618       20,352
   Work-in-process                              20,644      14,910       10,533
   Raw materials & parts                        35,647      25,143       21,495
                                              --------     -------      -------
     Total inventories                          79,415      68,671       52,380
                                                                      
  Other current assets                             928         579          884
  Deferred tax asset                             3,221       5,300        4,565
                                              --------     -------      -------
    Total current assets                       128,045     108,598       96,925
                                                                      
 Property, plant & equipment                    60,334      56,739       49,428
 Less accumulated depreciation                  38,346      37,288       35,905
                                              --------     -------      -------
  Net property, plant & equipment               21,988      19,451       13,523
                                                                      
 Long-term receivables                             380       2,509        2,586
 Other assets, principally goodwill              7,975       6,970        1,303
 Deferred tax assets                             6,900       6,900        9,100
                                              --------     -------      -------
                                              $165,288     144,428      123,437     
                                              ========     =======      =======
                                                                      
 Current liabilities:                                                 
  Current maturities of long-term debt        $    209         259          170
  Accounts payable                              17,809      14,655       10,051
  Accrued liabilities                           12,156       9,647        9,182
                                              --------     -------      -------
    Total current liabilities                   30,174      24,561       19,403
                                                                      
 Long-term debt                                 61,203      49,274       34,000
                                                                      
Common shares & other capital:                                        
  Class A common stock & common                                       
    stock                                        2,151       2,151        2,108
  Other capital                                 71,760      68,442       67,926
                                              --------     -------      -------
    Total common shares & other capital         73,911      70,593       70,034
                                              --------     -------      -------
                                              $165,288     144,428      123,437     
                                              ========     =======      =======
 
</TABLE>


* Condensed from audited financial statements.
See notes to condensed consolidated financial statements.



                                    -3 of 13-
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
           (dollars and shares in thousands, except per share data)


<TABLE>
<CAPTION>
                                   Three Months Ended          Six Months Ended
                                         June 30                    June 30
                                  --------------------       --------------------
                                    1998       1997            1998       1997
                                  ---------  ---------       ---------  ---------  
<S>                               <C>        <C>             <C>        <C>
 
Net revenues                       $65,892     46,105         109,914     87,818
                                   -------     ------         -------     ------
                                                                         
Costs and expenses:                                                      
  Cost of goods sold                48,121     34,365          82,404     65,679
  Marketing and                                                          
    administrative                   7,686      6,080          14,810     12,232
  Engineering and                                                        
    product development              1,910      1,709           3,706      3,143
  Product line relocation                                                
    costs                              411          -           1,351          -
                                   -------     ------         -------     ------
                                    58,128     42,154         102,271     81,054
                                                                         
Operating earnings                   7,764      3,951           7,643      6,764
                                                                         
Other expense (income):                                                  
  Interest expense                   1,196        718           2,286      1,431
  Interest income                     (285)      (323)           (487)      (486)
  Other, net                           (61)        (3)            (77)         -
                                   -------     ------         -------     ------
                                                                         
Earnings before income taxes         6,914      3,559           5,921      5,819
                                                                         
Income tax expense                   2,546      1,329           2,220      2,165
                                   -------     ------         -------     ------
                                                                         
Net earnings                       $ 4,368      2,230           3,701      3,654
                                   =======     ======         =======     ======
                                                                         
Share data:                                                              
  Net earnings applicable                                                
    to common shares               $ 4,368      2,230           3,701      3,654
                                                                         
  Weighted average outstanding                                           
    common shares:                                                    
           Basic                    21,505     21,078          21,503     21,045
                                                                         
           Diluted                  21,680     21,172          21,626     21,163
                                                                         
  Net earnings per average                                              
    outstanding share:                                                
           Basic                   $   .20        .11             .17        .17
                                   =======     ======         =======     ======
                                                                         
           Diluted                 $   .20        .11             .17        .17
                                   =======     ======         =======     ======
                                                                         
  Dividends per common share       $   .01        .01             .02        .02
                                   =======     ======         =======     ======
</TABLE>
See notes to condensed consolidated financial statements.

                                     -4 of 13-
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK
                               AND OTHER CAPITAL
                            (dollars in thousands)

<TABLE>
<CAPTION>
===================================================================================================
                           COMMON STOCK    CLASS A COMMON STOCK   ADDITIONAL                      
                          ---------------  ---------------------    PAID-IN    TREASURY   RETAINED 
                          SHARES   AMOUNT     SHARES     AMOUNT     CAPITAL      STOCK    EARNINGS
                          -------------------------------------------------------------------------
<S>                       <C>      <C>     <C>           <C>      <C>          <C>        <C>
 
Balance December 31,
 1995                        621   $    -   20,381,383    $2,038     $46,001       $  -    $11,360
 
Net earnings                   -        -            -         -           -          -      5,461
 
Dividends declared
 and accretion on
 preferred stock               -        -            -         -           -          -       (272)
Dividends paid,
 common stock                  -        -            -         -           -          -       (205)
 
Exercise of stock
 options                       -        -       86,000         9         111          -          -
                          ------   ------  -----------   -------  ----------   --------   --------
 
Balance December 31,
 1996                        621        -   20,467,383     2,047      46,112          -     16,344
 
Net earnings                   -        -            -         -           -          -      3,165
 
Purchase of treasury
 stock                         -        -            -         -           -        (32)         -
 
Dividends paid,
 common stock                  -        -            -         -           -          -       (851)
 
Common stock issued            -        -       75,000         8         367          -          -
 
Exercise of stock
 warrants                      -        -      600,000        60       2,190          -          -
 
Exercise of stock
 options                       -        -      364,000        36       1,147          -          -
                          ------   ------  -----------   -------  ----------   --------   --------
 
Balance December 31,
 1997                        621        -   21,506,383     2,151      49,816        (32)    18,658
 
(The information which
 follows is unaudited)
 
Net earnings                   -        -            -         -           -          -      3,701
 
Retired voting common
 stock                       (19)       -            -         -           -          -          -
 
Retired treasury stock         -        -       (6,340)        -         (32)        32          -
 
Exercise of stock
 options                       -        -       11,360         -          47          -          -
 
Dividends paid,
 common stock                  -        -            -         -           -          -       (430)
                          ------   ------  -----------   -------  ----------   --------   --------
Balance June 30, 1998
 (Unaudited)                 602   $    -   21,511,403    $2,151     $49,831       $  -    $21,929
                          ======   ======  ===========   =======  ==========   ========   ========
</TABLE>
See notes to condensed consolidated financial statements.

                                   -5 of 13-
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                            (dollars in thousands)
 


                                                         Six Months Ended
                                                              June 30
                                                         -----------------
                                                           1998     1997
                                                           ----     ----
OPERATING ACTIVITIES
 Net earnings                                           $  3,701    3,654
 Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
  Depreciation                                             1,194    1,230
  Amortization                                               149       23
  Loss (gain) on sale of assets                              (77)       -
  Change in assets and liabilities:
   Receivables                                            (8,382)  (4,774)
   Inventories                                           (10,744)   6,317
   Other, current assets                                    (349)    (697)  
   Accounts payable                                        3,154    3,642
   Accrued liabilities                                     2,509      999
   Deferred tax asset                                      2,079    2,135
   Long-term receivables                                   2,129   (2,234)
   Other non-current assets, net of amortization
   of goodwill                                            (1,156)    (271)
                                                        --------   ------
 Net cash and cash equivalents provided by (used in)
  operating activities                                    (5,793)  10,024
                                                        --------   ------
 
 
INVESTING ACTIVITIES
  Proceeds from sale of assets                               288      104
  Capital expenditures                                    (3,940)  (2,512)
                                                        --------   ------
 Net cash and cash equivalents used in investing
  activities                                              (3,652)  (2,408)
                                                        --------   ------
 
FINANCING ACTIVITIES
  Payments on long-term debt                                (121)    (189)
  Net borrowings on revolving credit note                 12,000        -
  Proceeds from stock options exercised                       47       49
  Proceeds from stock warrants exercised                       -    2,250
  Payment of common stock dividends                         (430)    (421)
                                                        --------   ------
 Net cash and cash equivalents provided by
  financing activities                                    11,496    1,689
                                                        --------   ------
 
Increase in cash and cash equivalents                      2,051    9,305
 
Cash and cash equivalents at beginning of period           7,131    7,160
                                                        --------   ------
 
Cash and cash equivalents at end of period              $  9,182   16,465
                                                        ========   ======
 

See notes to condensed consolidated financial statements.


                                     -6 of 13-
<PAGE>
 
                       CMI CORPORATION AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

(1) The interim condensed consolidated financial information has been prepared
    in conformity with generally accepted accounting principles applied, in all
    material respects, on a basis consistent with the consolidated financial
    statements included in the annual report filed with the Securities and
    Exchange Commission for the preceding fiscal year.  The financial
    information as of June 30, 1998 and 1997 and for the interim periods ended
    June 30, 1998 and 1997 included herein is unaudited; however, such
    information reflects all adjustments consisting of only normal recurring
    adjustments, which are, in the opinion of management, necessary to a fair
    presentation of the results for the interim periods.

(2) The results of operations for the six months ended June 30, 1998 are not
    necessarily indicative of the results to be expected for the full year. The
    Company is in a seasonal business, whereas normally at least 60 percent of
    the Company's revenues occur in the first six months of each calendar year.

(3) Certain reclassifications have been made to the prior interim periods to
    conform to the 1998 presentations.

(4) There have been no material changes in related party transactions since the
    annual report filed for the preceding fiscal year.

(5) Commitments and Contingencies
    -----------------------------

    The Company and its subsidiaries are parties to various leases relating to
    plants, warehouses, office facilities, transportation vehicles, and certain
    other equipment. Real estate taxes, insurance, and maintenance expenses are
    normally obligations of the Company. It is expected that in the normal
    course of business, the majority of the leases will be renewed or replaced
    by other leases. Leases do not provide for dividend restrictions, debt, or
    future leasing arrangements. All leasing arrangements contain normal leasing
    terms without unusual purchase options or escalation clauses.

    At June 30, 1998, the Company was contingently liable as guarantor for
    certain accounts receivable sold with recourse of approximately $2,650,000
    through September 2006.

    The accompanying June 30, 1998 and December 31, 1997 condensed consolidated
    balance sheet reflect the preliminary allocation of the purchase price for
    substantially all of the assets of Rexworks', Inc. TRASHMASTER Landfill
    Compactor product line and three hard material grinding machine product
    lines as consummated by the Company on December 17, 1997. The purchase price
    allocation has not been finalized due to certain pre-acquisition
    contingencies identified by the Company relating to impairment of assets and
    contingent liabilities. Accordingly, goodwill associated with the
    acquisition may increase during the remainder of 1998.



                                   -7 of 13-
<PAGE>
 
(6) In February 1997, the Financial Accounting Standards Board issued SFAS No.
    128, "Earnings Per Share."  SFAS No. 128 revised the previous calculation
    methods and presentations of earnings per share.  The statement requires
    that all prior-period earnings per share data be restated.  The Company
    adopted SFAS No. 128 in the fourth quarter of 1997 as required by the
    statement.  The effect of adopting SFAS No. 128 did not result in a change
    to the Company's 1997 second quarter or year-to-date earnings per share
    data, as previously reported, except the previously reported amounts for
    earnings per share were presented using basic earnings per share and diluted
    earnings per share.

    Under the provisions of SFAS No. 128, basic earnings per share is computed
    by dividing net earnings (loss) applicable to common stock by the weighted
    average number of common shares outstanding for the period. Diluted earnings
    per share reflects the potential dilution that could occur if the Company's
    outstanding stock options were exercised (calculated using the treasury
    stock method).

    The following table reconciles the net earnings applicable to common shares
    and weighted average common shares outstanding used in the calculation of
    basic and diluted earnings per common share (dollars and shares in
    thousands, except per share data):

<TABLE>
<CAPTION>
                                            Three Months Ended    Six Months Ended
                                                 June 30             June 30
                                            ------------------   ------------------
                                               1998      1997       1998     1997
                                               ----      ----       ----     ----
<S>                                         <C>       <C>        <C>      <C>
  Net earnings applicable to                                    
    common shares, basic and diluted         $ 4,368     2,230      3,701     3,654
                                             =======    ======     ======    ======
                                                                          
  Weighted average number of outstanding                                  
    common shares - basic                     21,505    21,078     21,503    21,045
                                                                          
  Dilutive effect of potential common                                     
    shares issuable upon exercise of                                      
    employee stock options and stock                                      
    purchase warrants                            175        94        123       118
                                             -------    ------     ------    ------
                                                                          
  Weighted average number of outstanding                                  
    common shares - diluted                   21,680    21,172     21,626    21,163
                                             =======    ======     ======    ======
                                                                          
  Earnings per share:                                                     
                                                                          
    Basic                                    $   .20       .11        .17       .17
                                             =======    ======     ======    ======
                                                                          
    Diluted                                  $   .20       .11        .17       .17
                                             =======    ======     ======    ======
</TABLE>

(7) Litigation
    ----------

    As previously disclosed, on November 22, 1995, certain attorneys, previously
    engaged by the Company in connection with prior patent litigation, filed
    suit against the Company in the Circuit Court of Cook County, Illinois. On
    December 20, 1995, the case was removed to the United States District Court
    for the Northern District of Illinois, Eastern Division. The attorneys are
    seeking to recover approximately $1.4 million of legal fees and costs
    alleged to be owing by the Company, together with prejudgment and post
    judgment interest and other costs.


                                   -8 of 13-
<PAGE>
 
    There are numerous other claims and pending legal proceedings that generally
    involve product liability and employment issues. These cases are, in the
    opinion of management, ordinary routine matters incidental to the normal
    business conducted by the Company. In the opinion of the Company's
    management after consultation with outside legal counsel, the ultimate
    disposition of such proceedings, including the case above, will not have a
    materially adverse effect on the Company's consolidated financial position,
    liquidity or future results of operations.

(8) Comprehensive Income
    --------------------

    The Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive
    Income," on January 1, 1998. SFAS No. 130 establishes standards for
    reporting and display of "Comprehensive Income" and its components in a set
    of financial statements. It requires that all items that are required to be
    recognized under accounting standards as components of comprehensive income
    be reported in a financial statement that is displayed with the same
    prominence as other financial statements. Through June 30, 1998, the Company
    does not have any items included in comprehensive income that are not
    already included in the Company's statements of operations.



                                   -9 of 13-
<PAGE>
 
                                CMI CORPORATION
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

Results of Operations
---------------------

During the fourth quarter of 1997 the Company acquired all the outstanding stock
of Brownwood Ross Company, a concrete plant manufacturing company; certain
assets of CS Johnson Corporation, a concrete plant manufacturing company; and
certain assets related to the landfill and embankment compactor and material
reduction grinder product lines from Rexworks, Inc. The results of operation for
the three months and six months ended June 30, 1998 include these operations.

Revenues increased 43 percent to $65,892,000 for the three months ended June 30,
1998, compared to $46,105,000 for the three months ended June 30, 1997.
Approximately 70 percent of the increased revenues were from the newly acquired
operations. Net earnings increased to $4,368,000, or 20 cents per share, for the
three months ended June 30, 1998, compared to $2,230,000, or 11 cents per share,
for the comparable three months ended June 30, 1997.

Revenues increased 25 percent to $109,914,000 for the six months ended June 30,
1998, compared to $87,818,000 for the six months ended June 30, 1997.  Net
earnings were $3,701,000, or 17 cents per share, for the six months ended June
30, 1998, compared to $3,654,000, or 17 cents per share, for the six months
ended June 30, 1997.

Gross margin, as a percentage of net revenues, was 27.0 percent for the three
months ended June 30, 1998, compared to 25.5 percent for the three months ended
June 30, 1997.  Gross margin, as a percentage of net revenues, was 25.0 percent
for the six months ended June 30, 1998, compared to 25.2 percent for the six
months ended June 30, 1997.

The Company's gross margins for the six months ended June 30, 1998 were impacted
by the shortfall of automated road machines shipped during the first three
months of 1998, which have higher margins than the Company's other core
products.  Additionally, manufacturing disruptions and reduced efficiencies
caused by the accelerated move of the acquired embankment compactor and material
reduction grinder product lines from Milwaukee to Oklahoma City impacted
shipments during the first six months of 1998.

The Company's factory modernization plan at Oklahoma City that has been
discussed in previous quarters continues to progress. Several of the long lead-
time capital improvements are now beginning to be placed in service, which
should help continue to lower manufacturing costs during the last half of 1998.

Marketing and administrative expenses increased $1,606,000 for the comparable
three months ended June 30, 1998, and  increased $2,578,000 for the comparable
six months ended June 30, 1998.  As a percentage of net revenues marketing and
administrative expenses were 11.7 percent for the three months ended June 30,
1998, compared to 13.2 percent for the three months ended June 30, 1997, and
were 13.5 percent for the six months ended June 30, 1998, compared to 13.9
percent for the six months ended June 30, 1997.

Engineering and product development expenses increased $201,000 for the
comparable three months ended June 30, 1998, and  increased $563,000 for the
comparable six months  ended  June 30, 1998.  As a percentage  of  net  revenues
engineering  and product development expenses were 2.9 percent for the three
months ended June 30, 1998, compared to 3.7 percent for the three months ended
June 30, 1997, and  were 3.4 percent for the six months ended June 30, 1998,
compared to 3.6 percent for the six months ended June 30, 1997.


                                   -10 of 13-
<PAGE>
 
Product line relocation costs for the three months and six months ended June 30,
1998 were $411,000 and $1,351,000, respectively.  These costs were incurred by
the Company to move the embankment compactor and material reduction grinder
product lines from Milwaukee to Oklahoma City. The Company does not anticipate
future quarters being impacted by these relocation costs.

Interest expense increased to $1,196,000 for the three months ended June 30,
1998, compared to $718,000 for the three months ended June 30, 1997 and
increased to $2,286,000 for the six months ended June 30, 1998, compared to
$1,431,000 for the six months ended June 30, 1997.  The increase in interest
expense is due to additional borrowings on the Company's revolving line of
credit primarily for the acquisitions completed during the fourth quarter of
1997 and increased working capital requirements for the six months ended June
30, 1998.

Interest income was $285,000 for the three months ended June 30, 1998, compared
to $323,000 for the three months ended June 30, 1997 and was $487,000 for the
six months ended June 30, 1998, compared to $486,000 for the six months ended
June 30, 1997.

The Company's effective tax rate for the three months and six months ended June
30, 1998 and 1997 was approximately 37 percent.  The Company's quarterly tax
rates are estimates of its expected annual effective federal and state income
tax rates.  The combined effective income tax rate for 1997 was approximately 37
percent and the Company expects a comparable annual effective rate in 1998.

Liquidity and Capital Resources
-------------------------------

Working capital at June 30, 1998 was $97,871,000 compared to $77,522,000 at June
30, 1997, an increase of $20,349,000. The increase in working capital is due to
an increase in inventories of $27,035,000 and an increase in receivables of
$12,668,000; offset by, a decrease in cash of $7,283,000, an increase in
accounts payable of $7,758,000 and an increase in accrued liabilities of
$2,974,000.  The increase in inventories, primarily work-in-process and raw
materials and purchased parts, from December 31, 1997 is largely the result of
increased production, sales backlog, and 1997 fourth quarter acquisitions.  The
current ratio at June 30, 1998 was 4.2-to-1 compared to 5.0-1 at June 30, 1997.

Cash used in operating activities for the six months ended June 30, 1998 was
$5,793,000 compared to cash provided by operating activities of $10,024,000 for
the six months ended June 30, 1997.  The significant change in cash from
operating activities is primarily due to increased inventories and receivables.
Financing activities for the six months ended June 30, 1998 provided an
additional $11,496,000, which included $12,000,000 of borrowings from the
Company's revolving line of credit which was primarily the result of an increase
in inventories.

Capital expenditures are budgeted at $11,000,000 for 1998 and are being
financed using internally generated funds and leasing programs. These capital
expenditures are being used to improve the Company's manufacturing and product
support efficiencies.  Capital expenditures for the six months ended June 30,
1998 were $3,940,000 compared to $2,512,000 for the comparable six months ended
June 30, 1997.  Additionally, the Company anticipates approximately $4,000,000
of capital expenditures to be placed in service during the third quarter of
1998.



                                   -11 of 13-
<PAGE>
 
The Company's $30,000,000 unsecured senior notes mature from September 2000 to
September 2006. The Company's $40,000,000 unsecured revolving line of credit
matures September 2000.  As of June 30, 1998,  the Company  had utilized
$27,000,000 of the unsecured revolving  line  of credit.  Other long-term debts
have maturity dates through September 2010 and are expected to be paid or
refinanced when due.  As of June 30, 1998 the Company was in compliance with all
debt covenants.

During the second quarter of 1998 the Company continued to pay a quarterly cash
dividend of one cent per share on June 1, 1998, to holders of record at the
close of business on May 21, 1998. It is the Board of Directors intention to
continue paying quarterly cash dividends.

Income Taxes
------------

The benefits of future tax deductions and credits not utilized by the Company in
the past are reflected as an asset to the extent the Company assesses that
future operations will "more likely than not" be sufficient to realize such
benefits.  For the period ending June 30, 1998, the Company has assessed its
past earnings history and trends, sales backlog, budgeted sales, and expiration
dates of future tax deductions and credits. As a result, the Company has
determined it is "more likely than not" that $10,121,000 of the benefits of
future tax deductions and credits will be utilized.  The ultimate realization of
the deferred tax assets will require aggregate taxable income of approximately
$29 million to $34 million in future years.

Impact of Year 2000 Issue
-------------------------

An issue exists for all companies that rely on computers as the Year 2000
approaches.  The "Year 2000" problem is the result of past practices in the
computer industry of using two digits rather than four to identify the
applicable year.  This practice will result in incorrect results when computers
perform arithmetic operations, comparisons or data field sorting involving years
later than 1999.  In connection with the plant re-engineering program the
Company is currently implementing a new manufacturing and financial reporting
system which is Year 2000 compliant.

The Company anticipates that it will be able to test its entire system using its
internal programming staff and outside computer consultants and intends to make
any necessary modifications to prevent disruption to its operations.  Future
costs in connection with any such modifications and completion of implementation
are not expected to be material.

Forward Looking Statements
--------------------------

Statements of the Company or management's intentions, beliefs, anticipations,
expectations and similar expressions concerning future events contained in this
report constitute "forward looking statements" as defined in the Private
Securities Litigation Reform Act of 1995.  As with any future event, there can
be no assurance that the events described in forward looking statements made in
this report will occur or that the results of future events will not vary
materially from those described in the forward looking statements made in this
report. Important factors that could cause the Company's actual performance and
operating results to differ materially from the forward looking statements
include, but are not limited to, highway funding, adverse weather conditions,
general economic conditions and political changes both domestically and
overseas.


                                   -12 of 13-
<PAGE>
 
                          PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. CHANGES IN SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On May 14, 1998, the annual meeting of shareholders of the Company was held at
the Company's corporate offices in Oklahoma City, Oklahoma.  The items of
business considered at the annual meeting were as follows:

1.  The election of Larry D. Hartzog, Ronald  A. Kahn, and Thomas P. Stafford to
    serve as directors of the Company for a term of three years.

At the annual meeting, 19,514,393 votes were cast by the shareholders FOR the
election of Mr. Hartzog and 96,757 votes were WITHHELD; 19,436,547 votes were
cast by the shareholders FOR the election of Mr. Kahn and 174,603 votes were
WITHHELD; 19,512,848 votes were  cast by the shareholders FOR the election of
Mr. Stafford and 98,302 votes were WITHHELD.

ITEM 5. OTHER INFORMATION.

None.

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

(a) Exhibits required by Item 601 of Regulation S-K are as follows:

    Exhibit No.
    -----------

    27  Financial Data Schedule

(b) The Company did not file any report on a Form 8-K during the fiscal quarter
    ended June 30, 1998.

                                  SIGNATURES

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


Date:    August 10, 1998              /s/Jim D. Holland
      ---------------------           -----------------------------------
                                      Jim D. Holland
                                      Sr. Vice President, Treasurer and
                                      Chief Financial Officer


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