SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

      For the quarterly period ended April 30, 1999

                                       OR

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

      For the transition period from _________________ to _________________


                         Commission file number 0-12927

                         NATIONAL HOME HEALTH CARE CORP.
           ----------------------------------------------------------
             (Exact name of Registrant as Specified in Its Charter)

          Delaware                                     22-2981141
-------------------------------            -------------------------------------
(State or Other Jurisdiction of              (IRS Employer Identification No.)
 Incorporation or Organization)

                700 White Plains Road, Scarsdale, New York 10583
         --------------------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

         Registrant's Telephone Number Including Area Code: 914-722-9000
                                                            ------------

--------------------------------------------------------------------------------
              Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report.

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  Registrant  has filed all  documents  and
reports  required by Section 12, 13 or 15(d) of the  Securities  Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court. Yes [ ]  No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

The  number  of  shares  of common  stock  outstanding  as of June 14,  1999 was
5,106,350


                                       -1-

<PAGE>

                         NATIONAL HOME HEALTH CARE CORP.

                                    FORM 10-Q

                      FOR THE QUARTER ENDED APRIL 30, 1999



                                                                            Page
                                                                            ----

PART I.             FINANCIAL INFORMATION

Item 1.             Financial Statements

                    Consolidated Balance Sheets as of April 30, 1999
                    and July 31, 1998 (unaudited)                            3-4

                    Consolidated Statements of Operations for the three
                    months ended April 30, 1999 and April 30, 1998 and the
                    nine months ended April 30, 1999 and April 30, 1998
                    (unaudited)                                                5

                    Consolidated Statements of Cash Flows for the nine
                    months ended April 30, 1999 and April 30, 1998
                    (unaudited)                                                6

                    Notes to Consolidated Financial Statements               7-8

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

PART II.            OTHER INFORMATION

Item 6.             Exhibits and Reports on Form 8-K                          15

SIGNATURES                                                                    16


                                      -2-
<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED

<TABLE>
<CAPTION>


                                                                       April 30, 1999                July 31, 1998
                                                                       --------------                -------------
ASSETS

Current assets:
<S>                                                                    <C>                          <C>
     Cash and cash equivalents                                            $7,664,000                   $10,992,000
     Investments                                                             313,000                       488,000
     Accounts receivable-less allowance for doubtful
         accounts of $434,000 at April 30, 1999 and
         $295,000 at July 31, 1998                                        10,245,000                     8,269,000
     Income taxes receivable                                                  25,000                       123,000
     Prepaid expenses and other assets                                        70,000                       195,000
     Deferred taxes                                                          417,000                       289,000
                                                                        ------------                  ------------

         Total current assets                                             18,734,000                    20,356,000

Furniture, equipment and leasehold
     improvements, net                                                       513,000                       395,000
Excess of cost over fair value of net assets of
     businesses acquired, net                                              5,404,000                     3,179,000
Other intangible assets, net                                               1,308,000                       745,000
Deposits and other assets                                                    168,000                       154,000
Investment in unconsolidated investee                                          -----                       674,000
                                                                         -----------                   -----------

         TOTAL                                                           $26,127,000                   $25,503,000
                                                                         ===========                   ===========
</TABLE>

  (Continued)


                                       -3-

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED

<TABLE>
<CAPTION>


                                                                           April 30, 1999             July 31, 1998
                                                                           --------------             -------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                                                         <C>                     <C>
     Accounts payable and accrued expenses                                     $1,208,000              $1,013,000
     Estimated third-party payor settlements                                      302,000                 209,000
                                                                              -----------            ------------

         Total current liabilities                                              1,510,000               1,222,000
                                                                               ----------             -----------

         Total liabilities                                                      1,510,000               1,222,000
                                                                               ----------             -----------

Stockholders' equity:
    Common stock, $.001 par value; authorized
         20,000,000 shares, issued 6,228,746 shares                                 6,000                   6,000
     Additional paid-in capital                                                18,525,000              18,525,000
     Retained earnings                                                          7,736,000               7,045,000
                                                                              -----------            ------------
                                                                               26,267,000              25,576,000

Less treasury stock (1,093,736 and 1,028,879 shares)
    at cost                                                                    (1,650,000)             (1,295,000)
                                                                            --------------           -------------

         Total stockholders' equity                                            24,617,000              24,281,000
                                                                              -----------             -----------

                   TOTAL                                                      $26,127,000             $25,503,000
                                                                              ===========             ===========


</TABLE>
See accompanying notes to consolidated financial statements.



                                       -4-

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED

<TABLE>
<CAPTION>

                                                      For the three months ended                   For the nine months ended
                                                                April 30,                                  April 30,
                                                        ------------------------                    -----------------------
                                                        1999               1998                     1999               1998
                                                        ----               ----                     ----               ----

<S>                                              <C>                 <C>                     <C>                <C>
Net patient revenue                                 $9,645,000          $8,303,000              $28,872,000        $26,206,000
                                                    ----------          ----------              -----------        -----------

Operating expenses:
     Cost of revenue                                 6,238,000           5,310,000               18,884,000         16,884,000
     General and administrative                      2,741,000           2,212,000                7,667,000          6,724,000
     Amortization of intangibles                       142,000              93,000                  409,000            280,000
                                                  ------------       -------------              -----------      -------------

         Total operating expenses                    9,121,000           7,615,000               26,960,000         23,888,000
                                                   -----------         -----------               ----------         ----------

Income from operations                                 524,000             688,000                1,912,000          2,318,000

Other income (loss):
     Interest income                                    95,000             133,000                  290,000            407,000
     (Loss) from equity investee                         -----            (247,000)                (674,000)        (1,158,000)
                                                 -------------        -------------            -------------       ------------

Income before taxes                                    619,000             574,000                1,528,000          1,567,000

Provision for income taxes                             199,000             311,000                  837,000            755,000
                                                    ----------          ----------               ----------        -----------

NET INCOME                                            $420,000            $263,000                 $691,000           $812,000
                                                     =========            ========                 ========           ========

Net income per share:
     Basic                                               $0.08               $0.05                    $0.13              $0.15
                                                   ===========         ===========              ===========      =============

     Diluted                                             $0.08               $0.05                    $0.13              $0.15
                                                   ===========         ===========              ===========      =============


Weighted average shares outstanding:
     Basic                                           5,148,647           5,221,946                5,178,124          5,239,625

     Diluted                                         5,239,987           5,284,036                5,257,145          5,316,892

</TABLE>

See accompanying notes to consolidated financial statements.


                                       -5-

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                                                              For the nine months ended April 30,
                                                                                          ------------------------------------------
                                                                                                1999                         1998
                                                                                                ----                         ----
<S>                                                                                        <C>                          <C>
Cash flows from operating activities:
     Net income                                                                               $691,000                     $812,000
     Adjustments to reconcile net income to net cash provided by
     operating activities:
         Depreciation and amortization                                                         502,000                      357,000
         Loss from equity investee                                                             674,000                    1,158,000
         Gain on sale of assets                                                                 (3,000)
         Deferred tax                                                                            -----                     (316,000)
         Changes in:
              Accounts receivable                                                           (1,186,000)                    (883,000)
              Income taxes receivable/payable                                                   93,000                     (127,000)
              Prepaid expenses and other assets                                                139,000                       19,000
              Accounts payable, accrued expenses and other liabilities                          67,000                     (255,000)
              Estimated third party payor settlements                                           93,000                      461,000
                                                                                           -----------                 ------------
                  Net cash provided by operating activities                                  1,070,000                    1,226,000
                                                                                           -----------                 ------------

Cash flows from investing activities:
     Proceeds of investments                                                                   175,000                       20,000
     Purchase of property, plant and equipment                                                (127,000)                     (63,000)
     Purchase of assets of business                                                         (1,943,000)                       -----
     Purchase of Accredited Health Services, Inc., net of cash acquired                     (1,733,000)                       -----
                                                                                           ------------                ------------
                  Net cash (used in) investing activities                                   (3,628,000)                     (43,000)
                                                                                           ------------                -------------

Cash flows from financing activities:
     Proceeds from exercise of stock options                                                     -----                       49,000
     Purchase of treasury shares                                                              (355,000)                    (263,000)
     Repayment of notes payable                                                               (421,000)                       -----
     Proceeds from sale of assets                                                                6,000                        -----
                                                                                           -----------                 ------------
                  Net cash (used in) financing activities                                     (770,000)                    (214,000)
                                                                                           ------------                -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                        (3,328,000)                     969,000

Cash and cash equivalents-beginning of period                                               10,992,000                    9,324,000
                                                                                           -----------                 ------------

CASH AND CASH EQUIVALENTS-END OF PERIOD                                                     $7,664,000                  $10,293,000
                                                                                           ===========                 ============

Supplemental  disclosures of cash flow information:  Cash paid during the period
     for:
         Taxes                                                                                $605,000                   $1,218,000
         Interest                                                                                -----                        2,000

</TABLE>


See accompanying notes to consolidated financial statements.


                                       -6-

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the three and nine month  periods  ended
April  30,  1999  are not  necessarily  indicative  of the  results  that may be
expected for the year ending July 31, 1999.  For further  information,  refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Company's annual report on Form 10-K for the year ended July 31, 1998.

NOTE 2 - INITIAL PUBLIC OFFERING OF SUNSTAR HEALTHCARE, INC.

         On May 21, 1996, the initial public offering of common stock by SunStar
Healthcare, Inc. ("SunStar") was consummated. Prior to the offering, SunStar had
been a  wholly  owned  subsidiary  of the  Company,  consisting  of its  Florida
outpatient medical center operations.  As a result of the offering,  the Company
currently  owns 890,000  shares of common  stock,  or  approximately  30.5%,  of
SunStar. The Company utilizes the equity method of accounting for its investment
in SunStar. As of April 30, 1999, the Company's carrying value of its investment
in SunStar is $0.

NOTE 3 - ACQUISITIONS

         On August 10, 1998,  the Company,  through its wholly owned  subsidiary
Health Acquisition Corp.  ("Health  Acquisition"),  acquired,  for $1,943,000 in
cash, including acquisition costs of $8,000,  certain assets of Bryan Employment
Agency,  Inc.,  d/b/a Bryan Home Care Services  ("Bryan Home Care"),  a New York
licensed  home  health  care  company  which  provides  home  care  services  in
Westchester  County,  New York. The  acquisition was accounted for as a purchase
and the cost was allocated as follows:  $285,000 to personnel files, $285,000 to
patient files,  $30,000 to furniture and equipment,  $200,000 to covenant not to
compete  and  $1,143,000  to excess of cost  over  fair  value of net  assets of
businesses  acquired.  The purchase price was generated from internal funds. The
acquisition  expanded the geographic  presence of the Company and enabled Health
Acquisition  to  become  a  participating  provider  in the  Westchester  County
Department of Social Services Medicaid  Program.  Annual revenues for Bryan Home
Care approximated $5,700,000 in calendar 1997.

         On October 30, 1998, the Company acquired all of the outstanding common
shares of  Accredited  Health  Services,  Inc.  ("Accredited").  Accredited is a
licensed  home health care company that  provides  home health aide  services in
Bergen, Hudson,  Passaic, Essex, Morris, Union, Somerset and Middlesex Counties,
New Jersey. The purchase price of approximately $1,946,000 in cash,


                                       -7-

<PAGE>

including  acquisition costs of $82,000,  was generated from internal funds. The
acquisition  was accounted for as a purchase.  The  allocation of purchase price
was as follows:  $1,119,000  to total current  assets,  $59,000 to furniture and
equipment,  $40,000 to other  assets,  $550,000  to total  current  liabilities,
$4,000 to other  liabilities and $1,282,000 to the excess of purchase price over
the  fair  value of  assets  acquired.  Revenues  from  Accredited  approximated
$5,300,000 for the fiscal year ended March 31, 1998.

NOTE 4 - PER SHARE DATA

         The Company adopted Statement of Financial  Accounting Standard No. 128
("SFAS 128"),  "Earnings Per Share," during the fiscal quarter ended January 31,
1998.


                                       -8-

<PAGE>


ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

         The following  discussion and analysis  provides  information which the
Company's  management believes is relevant to an assessment and understanding of
the Company's  results of operations and financial  condition.  This  discussion
should  be  read  in  conjunction  with  the  attached  consolidated   financial
statements  and  notes  thereto,   and  with  the  Company's  audited  financial
statements and notes thereto for the fiscal year ended July 31, 1998.

         This discussion contains forward-looking statements that are subject to
a number of known and  unknown  risks that,  in  addition  to general  economic,
competitive  and  other  business   conditions,   could  cause  actual  results,
performance  and  achievements  to differ  materially  from those  described  or
implied in the forward-looking statements.

         The  Company is  subject to  significant  external  factors  that could
significantly  impact its business,  including  changes in Medicare and Medicaid
reimbursement,  government  fraud and abuse  initiatives  and other such factors
that are beyond the control of the  Company.  These  factors,  as well as future
changes in  reimbursement,  could cause future results to differ materially from
historical results.

         The Balanced  Budget Act of 1997,  as amended  (the "Act"),  was signed
into law on August 5, 1997.  Under the Act,  for cost  reports  beginning  on or
after  October  1,  1997,  Medicare-reimbursed  home  health  agencies  will  be
reimbursed  under an interim  payment system ("IPS") for a two-year period prior
to the  implementation of a prospective  payment system.  Under IPS, home health
care  providers are  reimbursed  the lower of (i) their actual costs,  (ii) cost
limits based on 105% of median costs of freestanding  home health  agencies,  or
(iii) an  agency-specific  per patient  cost  limit,  based on 98% of 1994 costs
adjusted for inflation.  Prior to the implementation of IPS, Medicare reimbursed
providers on a reasonable cost basis subject to  program-imposed  cost per visit
limitations. The Act calls for payments to Medicare providers for cost reporting
periods  beginning on or after October 1, 2000 to be made in  accordance  with a
prospective  payment system to be established by the Secretary of the Department
of Health and Human Services.

         The  new IPS  cost  limits  apply  to the  Company's  Connecticut-based
Medicare  certified  nursing agency for the cost reporting period beginning July
1, 1998.  The Company has  determined  that these new limits will reduce current
reimbursement  for the Medicare services it provides.  Accordingly,  in May 1998
the Company  combined  its  operations  in  Connecticut  by merging its Medicare
certified subsidiary with its licensed agency subsidiary to increase operational
efficiencies.  In addition,  the Company has been closely monitoring utilization
of Medicare services in an effort not to exceed per patient cost limits.

         The  implementation  of IPS has resulted in a decrease in revenues from
the  Company's  Medicare  certified  agency from the previous  fiscal  year.  In
addition, the Company's operations in New York and New Jersey are dependent upon
referrals,  primarily from Medicare  certified home health care agencies,  whose
future reimbursement may be adversely affected. Accordingly, there can


                                       -9-

<PAGE>

be no assurance that the Company's  future  referrals will not result in reduced
reimbursement rates or reduced volume of business.

Results of Operations and Effects of Inflation
----------------------------------------------

Three Months Ended April 30, 1999 Compared to Three Months Ended April 30, 1998

         For the  three  months  ended  April  30,  1999,  net  patient  revenue
increased  $1,342,000,  or 16.2%,  to $9,645,000  from  $8,303,000 for the three
months ended April 30, 1998. Net patient  revenue from Health  Acquisition,  the
subsidiary  providing  home  health  care  services  in the  state of New  York,
increased  $526,000,  or 9.6%, to $6,022,000 from  $5,496,000.  This increase is
attributable  to the revenues  generated  from the  expansion  of business  into
Westchester  County, New York,  resulting from the purchase of certain assets of
Bryan Home Care of $1,375,000,  offset by the decline in same source revenues of
($849,000). The decline in same source revenues is attributable to the continued
decline in hours from the  Medicare  certified  home health care  agencies  that
Health Acquisition  contracts with, as a result of the implementation of IPS. In
addition, certain of these payor sources have reduced their reimbursement rates.
Net patient  revenue from New England Home Care, Inc. ("New England Home Care"),
the  subsidiary  that  is  Medicare  certified  and  licensed  in the  state  of
Connecticut,  decreased  ($492,000),  or (17.5%), to $2,315,000 from $2,807,000.
This decrease is attributable  to the decline in Medicare  revenue of ($477,000)
and a decline  in  non-Medicare  revenue  of  ($15,000).  The  decrease  in both
Medicare  and  non-Medicare  revenue  is the  result of the  change in  Medicare
reimbursement from cost reimbursement to the interim payment system. Net patient
revenue from Accredited,  the subsidiary  providing home health aide services in
the state of New Jersey,  was  $1,308,000  for the three  months ended April 30,
1999.

         Cost of revenue as a  percentage  of net patient  revenue  increased to
64.7% for the three  months ended April 30, 1999 from 63.9% for the three months
ended April 30, 1998.  This increase is attributable to the decreases in certain
reimbursement  rates from other  existing  Medicare  certified  home health care
agencies  that the  Company  contracts  with,  as a result of the  change in the
Medicare reimbursement system.

         General and administrative  expenses increased  $529,000,  or 23.9%, to
$2,741,000  for the three  months ended April 30, 1999 from  $2,212,000  for the
three  months  ended  April 30,  1998.  This  increase  is  attributable  to the
additional general and administrative expenses of three branch offices which the
Company  acquired in the  acquisitions  of both Bryan Home Care and  Accredited,
offset by the decline in general and administrative expenses of New England Home
Care as a result of the combining of the operations in Connecticut to offset the
impact of the  implementation  of IPS. As a percentage  of net patient  revenue,
general and  administrative  expenses  increased  to 28.4% for the three  months
ended April 30, 1999 from 26.6% for the three months ended April 30, 1998.

         Amortization of intangibles  increased to $142,000 for the three months
ended April 30, 1999 from  $93,000 for the three  months  ended April 30,  1998.
This increase is attributable to the


                                      -10-

<PAGE>

amortization  of goodwill and intangibles  associated  with the  acquisitions of
Bryan Home Care and Accredited.

         As  a  result  of  the  foregoing,  income  from  operations  decreased
($164,000),  or (23.8%),  to $524,000  for the three months ended April 30, 1999
from $688,000 for the three months ended April 30, 1998.

         Interest income decreased (28.5%) to $95,000 for the three months ended
April 30, 1999 from  $133,000 for the three  months  ended April 30, 1998.  This
decrease is attributable to lower average  outstanding  cash balances  resulting
from cash used to  acquire  certain  assets of Bryan  Home Care and the stock of
Accredited.

         The Company  recorded no loss from equity  investee in the three months
ended April 30, 1999,  as the  Company's  carrying  value of its  investment  in
SunStar was reduced to $0 in the quarter  ended  January 31,  1999.  The Company
recorded a loss from equity  investee of  ($324,000)  in the three  months ended
April 30, 1998,  representing  the  Company's  share of the net loss reported by
SunStar for the period.

         The  Company's  effective  tax rate  decreased  to 32.1%  for the three
months  ended  April 30,  1999 from 54.2% for the three  months  ended April 30,
1998.  This decrease is  attributable  to the  Company's  share of SunStar's net
loss,  in which no income tax benefit was  recorded  for the three  months ended
April 30,  1998.  Excluding  the tax effect of loss from  equity  investee,  the
effective  tax rate  decreased  to 32.1% from 38.6% for the three  months  ended
April 30, 1998, as a result of an overaccrual of taxes recorded in 1998.

Nine Months Ended April 30, 1999 Compared to Nine Months Ended April 30, 1998.

         For the nine months ended April 30, 1999, net patient revenue increased
$2,266,000,  or 10.2%, to $28,872,000 from $26,206,000 for the nine months ended
April  30,  1998.  Net  patient  revenue  from  Health   Acquisition   increased
$1,673,000,  or  9.7%,  to  $18,899,000  from  $17,226,000.   This  increase  is
attributable  to the revenues  generated  from the  expansion  of business  into
Westchester County, New York,  resulting from the purchase of Bryan Home Care of
$4,335,000, offset by the decline in same source revenues of ($2,682,000).  This
decrease is explained in the above three-month  discussion.  Net patient revenue
from New England Home Care  decreased  ($1,647,000),  or (18.3%),  to $7,333,000
from $8,980,000. This decrease is explained in the above three-month discussion.
Net patient  revenue from  Accredited  was  $2,640,000 for the nine months ended
April 30, 1999.

         Cost of revenue as a  percentage  of net patient  revenue  increased to
65.4% for the nine  months  ended  April 30, 1999 from 64.4% for the nine months
ended April 30,  1998.  This  increase  is  explained  in the above  three-month
discussion.



                                      -11-

<PAGE>

         General and administrative  expenses increased  $943,000,  or 14.0%, to
$7,667,000 for the nine months ended April 30, 1999 from $6,724,000 for the nine
months ended April 30, 1998.  This increase is  attributable  to the  additional
general and  administrative  expenses of three branch  offices which the Company
acquired in the  acquisitions of both Bryan Home Care and Accredited,  offset by
the decline in general and administrative expenses of New England Home Care as a
result of the combining of the operations in Connecticut to offset the impact of
the  implementation of IPS. As a percentage of net patient revenue,  general and
administrative  expenses  increased to 26.6% for the nine months ended April 30,
1999 from 25.7% for the nine months ended April 30, 1998.

         Amortization  of intangibles  increased to $409,000 for the nine months
ended April 30, 1999 from  $280,000  for the nine months  ended April 30,  1998.
This increase is  attributable  to the  amortization of goodwill and intangibles
associated with the acquisitions of Bryan Home Care and Accredited.

         As  a  result  of  the  foregoing,  income  from  operations  decreased
($406,000),  or (17.5%),  to $1,912,000 for the nine months ended April 30, 1999
from $2,318,000 for the nine months ended April 30, 1998.

         Interest income decreased (28.7%) to $290,000 for the nine months ended
April 30, 1999 from  $407,000  for the nine months  ended April 30,  1998.  This
decrease is attributable to lower average  outstanding  cash balances  resulting
from cash used to  acquire  certain  assets of Bryan  Home Care and the stock of
Accredited.

         The Company  recorded a loss from equity  investee of ($674,000) in the
nine months ended April 30, 1999 as compared to a loss of  ($1,158,000)  for the
comparable  period of 1998,  representing  the  Company's  share of the net loss
reported by SunStar for the same  periods.  As of April 30, 1999,  the Company's
carrying value of its investment in SunStar is $0.

         The Company's effective tax rate increased to 54.8% for the nine months
ended April 30, 1999 from 48.2% for the nine months ended April 30,  1998.  This
increase is attributable  to no income tax benefit  recorded for the nine months
ended April 30,  1999,  as compared to  ($316,000)  recorded for the nine months
ended April 30,  1998  related to the  Company's  share of  SunStar's  net loss.
Excluding  the tax effect of loss from equity  investee,  the effective tax rate
decreased slightly to 38.0% for the nine months ended April 30, 1999 as compared
to 39.3% for the comparable period of 1998.

         The rate of inflation had no material effect on operations for the nine
months ended April 30, 1999.

Financial Condition and Capital Resources
-----------------------------------------

         Current  assets  decreased  to  $18,734,000  and  current   liabilities
increased to  $1,510,000,  respectively,  at April 30, 1999.  This resulted in a
decrease in working capital by ($1,910,000) from


                                      -12-

<PAGE>

$19,134,000  at July 31, 1998 to  $17,224,000  at April 30, 1999.  Cash and cash
equivalents  decreased  ($3,328,000)  to  $7,664,000  at  April  30,  1999  from
$10,992,000  at July 31, 1998 and accounts  receivable  increased  $1,976,000 to
$10,245,000 at April 30, 1999 from  $8,269,000 at July 31, 1998. The decrease in
both working  capital and cash and the increase in accounts  receivable  reflect
the acquisitions of Bryan Home Care and Accredited  during the nine months ended
April 30, 1999. The combined acquisition costs were $3,889,000.

         Net cash  provided by  operating  activities  for the nine months ended
April 30, 1999 was  $1,070,000  as compared  to net cash  provided by  operating
activities of $1,226,000  for the nine months ended April 30, 1998. The decrease
in operating cash flow of ($156,000) is primarily attributable to the decline in
net  income  over the  comparable  period of 1998.  Net cash  used in  investing
activities  for the nine months  ended April 30, 1999  reflects  the proceeds of
investments, acquisitions made by the Company and the purchase of equipment. Net
cash used in  investing  activities  for the nine  months  ended  April 30, 1998
reflects the proceeds of  investments  and the purchase of  equipment.  Net cash
used in financing  activities  for the nine months ended April 30, 1999 reflects
the purchase of treasury shares and the repayment of notes payable to the former
officers of Accredited, offset by the proceeds from the sale of assets. Net cash
used in financing  activities  for the nine months ended April 30, 1998 reflects
the  purchase of treasury  shares  offset by the  proceeds  from the exercise of
stock options.

         The Company has available a $2,000,000  secured line of credit with its
bank. In addition, a subsidiary of the Company has a secured line of credit. The
maximum  amount  that can be borrowed  under the secured  line of credit may not
exceed the lesser of eligible  accounts  receivable or  $2,000,000.  Both credit
facilities  bear interest at the alternate base  commercial  lending rate of the
bank and expire  January 31, 2000. At April 30, 1999,  there was no  outstanding
balance under either line of credit.

         The  Company  intends to meet its short and long term  liquidity  needs
with its current cash  balances and its available  lines of credit.  The Company
believes  that  its  cash  balances  also  will  allow  it to  continue  to make
acquisitions  in the home  health care field  without  affecting  its  liquidity
needs.

         In  August  1998,  the  Board of  Directors  extended  for one year its
program to repurchase its Common Stock.  Purchases in the aggregate amount of up
to $1,000,000 in purchase price during the one-year extension would be made from
time to time in the open market and through privately  negotiated  transactions,
subject to general  market and other  conditions.  The buyback  program  will be
financed out of existing cash or cash equivalents.

Year 2000 Compliance
--------------------

         The Year 2000  issue is the  result of  computer  programs  which  were
written using two digits rather than four to define the applicable year. Certain
purchased  systems  used by the  Company,  and for  which the  Company  does not
control the  programming  code, use two digits for the year. The current systems
used by Health  Acquisition  and  Accredited  are  relatively  old and have been
slated for

                                      -13-

<PAGE>

replacement  with new systems  that better  meet the  information  needs as they
expand and deal with the current operating environment. Health Acquisition's new
computer  system is expected to be operational by October 1999, with an expected
cost of  approximately  $100,000.  The Company  has spent to date  approximately
$80,000 with respect to  Accredited's  new  computer  system,  which the Company
expects will be operational by August 1999. The Company  anticipates  that these
conversions will comply with the requirements to handle the year 2000 issue with
no significant  operational concerns. The current system utilized by New England
Home Care is a relatively new operating  system,  which the Company  implemented
with minimal  cost.  The Company has been advised by the system  vendor that all
required  changes  necessary to be year 2000 compliant  have been  substantially
completed and will be implemented prior to the year 2000.  Management  currently
believes that the financial resources necessary to accomplish  Company-wide year
2000  compliance  will not be material  to the  Company's  financial  condition,
liquidity or results of  operations.  However,  there is no  guarantee  that the
Company's expected results will be achieved.  In addition,  actual results could
differ materially from those expected results.

         The Company  depends on receipt of payment for services  from its payor
sources, most of which utilize computer software to process those payments.  The
Company's  primary  payors  include  Medicare and Medicaid  programs,  insurance
companies,  other Medicare  certified home health agencies and long-term  health
care provider  programs.  The Company has begun formal  communications  with its
significant  payors  to  determine  the  extent  to  which  the  Company  may be
vulnerable  to those payors'  failures to remediate  their own year 2000 issues.
The Company  currently is unable to predict  what effect,  if any, the year 2000
issue may have on the  computer  systems of those  payors,  or, in turn,  on the
Company.


                                      -14-

<PAGE>

PART II.   OTHER INFORMATION

Item 6. Exhibits and reports on Form 8-K

         (a)  Exhibits:

              27.1 Financial Data Schedule

         (b)  Reports on Form 8-K

              None

                                      -15-

<PAGE>
                                   SIGNATURES
                                   ----------

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

                                       National Home Health Care Corp.



Date:  June 14, 1999                   /s/ Robert P. Heller
                                       ---------------------
                                       Robert P. Heller
                                       Vice President of Finance and
                                       Chief Financial Officer
                                       (chief financial and accounting officer)