<PAGE>   1

                                  UNITED STATES
                       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 MARCH 31, 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: 0-15383


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

             North Carolina                             56-1019741 
         ------------------------           ------------------------------------
         (State of Incorporation)           (I.R.S. Employer Identification No.)

   3100 Smith Farm Road, Matthews, NC                        28105 
----------------------------------------                  ----------
(Address of principal executive offices)                  (Zip Code)


               Post Office Box 200, Matthews, North Carolina 28106
               ---------------------------------------------------
                (Mailing address of principal executive offices)


                                 (704) 821-7015
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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

3,075,744 shares of the issuer's $.05 par value common stock, its only class of
common stock, were outstanding as of April 30, 1999.


                                    1 of 17
<PAGE>   2

PART I. FINANCIAL INFORMATION


ITEM 1.  Financial statements


QUARTERLY REPORT ON FORM 10-Q
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
For the Quarter Ended March 31, 1999 
CEM Corporation 
Matthews, North Carolina


The condensed financial statements included herein have been prepared by the
Company, without audit, 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 the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1998.


                                    2 of 17
<PAGE>   3

                                 CEM Corporation
                      Condensed Consolidated Balance Sheets
                        March 31, 1999 and June 30, 1998

(in thousands)
<TABLE>
<CAPTION>
                                              (unaudited)
                                                March 31        June 30
                                                --------       --------
<S>                                             <C>            <C>     
ASSETS

Current Assets:
   Cash and cash equivalents .............      $  2,814       $  2,963
   Short-term investments ................         3,200          3,200
   Trade receivables, net of allowances ..         5,538          6,616
   Inventories ...........................         5,571          5,675
   Deferred taxes and other ..............           741            488
                                                --------       --------

      Total current assets ...............        17,864         18,942

Long-term Investments ....................         3,470          3,442

Property, Plant and Equipment, Net .......         4,916          4,925

Other Assets .............................           953            989
                                                --------       --------

Total Assets .............................      $ 27,203       $ 28,298
                                                ========       ========


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses .      $  2,287       $  3,488
   Deferred income .......................         1,413          1,280
   Income taxes payable ..................           593            538
                                                --------       --------

      Total current liabilities ..........         4,293          5,306

Long-term Debt, Net of Current Maturities          1,163          1,177

Deferred Taxes ...........................            96             96

Shareholders' Equity:
   Common stock ..........................           153            159
   Retained earnings .....................        21,825         21,800
   Translation adjustments ...............          (327)          (240)
                                                --------       --------
     Total Shareholders' Equity ..........        21,651         21,719
                                                --------       --------

Total Liabilities and Shareholders' Equity      $ 27,203       $ 28,298
                                                ========       ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                    3 of 17
<PAGE>   4

                                 CEM Corporation
                   Condensed Consolidated Statements of Income
               For the three months ended March 31, 1999 and 1998
                                   (unaudited)

(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                    1999          1998
                                                  -------       -------
<S>                                               <C>           <C>    

Net sales ..................................      $ 7,537       $ 8,012
Cost of goods sold .........................        3,526         3,778
                                                  -------       -------
    Gross profit ...........................        4,011         4,234

Selling, general and administrative expenses        2,751         2,745
Research and development expenses ..........          835           737
                                                  -------       -------
    Income from operations .................          425           752

Investment income ..........................          101           124
Other expenses, net ........................          (37)          (26)
                                                  -------       -------
    Income before income taxes .............          489           850

Provision for income taxes .................          162           268
                                                  -------       -------
    Net income .............................          327           582

Foreign currency translation ...............          219           346
                                                  -------       -------
    Comprehensive income ...................      $   546       $   928
                                                  =======       =======

Net income per share:

    Basic ..................................      $   .11       $   .17
                                                  =======       =======

    Diluted ................................      $   .11       $   .17
                                                  =======       =======

Average shares outstanding:

    Basic ..................................        3,075         3,442
                                                  =======       =======

    Diluted ................................        3,075         3,476
                                                  =======       =======
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                    4 of 17
<PAGE>   5

                                 CEM Corporation
                   Condensed Consolidated Statements of Income
                For the nine months ended March 31, 1999 and 1998
                                   (unaudited)

(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                    1999           1998
                                                  --------       --------
<S>                                               <C>            <C>     

Net sales ..................................      $ 23,180       $ 23,320
Cost of goods sold .........................        11,098         10,890
                                                  --------       --------
    Gross profit ...........................        12,082         12,430

Selling, general and administrative expenses         8,062          8,342
Research and development expenses ..........         2,341          2,163
                                                  --------       --------
    Income from operations .................         1,679          1,925

Investment income ..........................           313            419
Other expenses, net ........................           (78)           (66)
                                                  --------       --------
    Income before income taxes .............         1,914          2,278

Provision for income taxes .................           603            729
                                                  --------       --------
    Net income .............................         1,311          1,549

Foreign currency translation ...............           389            298
                                                  --------       --------
    Comprehensive income ...................      $  1,700       $  1,847
                                                  ========       ========

Net income per share:

    Basic ..................................      $    .42       $    .45
                                                  ========       ========

    Diluted ................................      $    .42       $    .44
                                                  ========       ========

Average shares outstanding:

    Basic ..................................         3,107          3,466
                                                  ========       ========

    Diluted. ...............................         3,122          3,495
                                                  ========       ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                    5 of 17
<PAGE>   6

                                 CEM Corporation
                 Condensed Consolidated Statements of Cash Flows
                For the nine months ended March 31, 1999 and 1998
                                   (unaudited)

(in thousands)

<TABLE>
<CAPTION>
                                                            1999         1998
                                                          -------       -------
<S>                                                       <C>           <C>    

Net cash provided by operating activities ..........      $ 2,210       $ 3,041
                                                          -------       -------

Cash flows from investing activities:
    Sale of available-for-sale investments .........         --           3,100
    Purchase of available-for-sale investments .....         --          (3,200)
    Purchase of long-term investment ...............         --          (1,152)
    Purchase of investment in affiliate ............          (38)         --
    Acquisition of intangibles .....................         (100)         (208)
    Capital expenditures, net ......................         (841)         (589)
                                                          -------       -------
           Net cash used in investing activities ...         (979)       (2,049)
                                                          -------       -------

Cash flows from financing activities:
    Payment of notes payable .......................          (94)           18
    Proceeds from issuance of common stock .........           21           409
    Repurchase of common stock .....................       (1,312)       (1,097)
                                                          -------       -------
           Net cash used in financing activities ...       (1,385)         (670)
                                                          -------       -------

Effects of exchange rates on cash ..................            5             6
                                                          -------       -------

Net (decrease)/increase in cash and cash equivalents         (149)          328
Cash and cash equivalents at beginning of period ...        2,963         5,833
                                                          -------       -------

Cash and cash equivalents at end of period .........      $ 2,814       $ 6,161
                                                          =======       =======
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                    6 of 17
<PAGE>   7

                                 CEM Corporation
              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)


1.  Basis of Presentation

The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods. The result of operations for
the period ended March 31, 1999 are not necessarily indicative of the results
that may be expected for the year ended June 30, 1999. Effective July 1, 1998,
the Company adopted FAS 130 "Reporting Comprehensive Income". The Shareholders'
Equity section of the Condensed Consolidated Balance Sheets and the Condensed
Consolidated Statements of Income have been modified to comply with the new
requirements.


2.  Inventories

The components of inventories at current cost at March 31, 1999 and June 30,
1998 are as follows:

(in thousands)

<TABLE>
<CAPTION>
                                        March 31     June 30
                                        -------      -------
<S>                                     <C>          <C>    
Parts and raw materials ..........      $ 3,311      $ 3,302
Work-in-process and finished goods        2,260        2,373
                                        -------      -------
                                        $ 5,571      $ 5,675
                                        =======      =======
</TABLE>


3.  Net Income Per Common Share

Basic Earnings Per Share Computation:

The computation of basic earnings per share is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding during the period. Shares issued during the period and shares
repurchased by the Company during the period are weighted for the portion of the
period that they were outstanding. Income and share information for the three
months ended March 31, 1999 follows:

(in thousands, except per share data)

Net income ............................                                $  327
Less: preferred stock dividends .......                                  --
                                                                       ------
Income available to common shareholders                                $  327
                                                                       ======

<TABLE>
<CAPTION>
                 Dates                          Shares     Fraction    Weighted
              Outstanding                    Outstanding  of Period  Average Shares
              -----------                    -----------  ---------  --------------
<S>                                          <C>          <C>        <C>
January 1, 1999 .........................                               3,079
Shares repurchased during the period ....         (16)      23/90          (4)
Stock options exercised during the period        --          --          --
                                                                       ------
Weighted average shares .................                               3,075
                                                                       ======

Basic earnings per common share .........                              $  .11
                                                                       ======
</TABLE>



                                    7 of 17
<PAGE>   8

3.  Net Income Per Common Share (continued)

Income and share information for the three months ended March 31, 1998 follows:

(in thousands, except per share data)

Net income..............................                               $  582
Less: preferred stock dividends.........                                    -
                                                                       ------
Income available to common shareholders.                               $  582
                                                                       ======

<TABLE>
<CAPTION>
                   Dates                      Shares     Fraction       Weighted
                Outstanding                Outstanding   of Period   Average Shares
                -----------                -----------   ---------   --------------
<S>                                        <C>           <C>         <C>
January 1, 1998..........................                               3,436
Shares repurchased during the period.....      (21)       43/90           (10)
Stock options exercised during the period       22        66/90            16
                                                                       ------
Weighted average shares..................                               3,442
                                                                       ======

Basic earnings per common share..........                              $  .17
                                                                       ======
</TABLE>


Income and share information for the nine months ended March 31, 1999 follows:

(in thousands, except per share data)

Net income..............................                               $1,311
Less: preferred stock dividends.........                                    -
                                                                       ------
Income available to common shareholders.                               $1,311
                                                                       ======

<TABLE>
<CAPTION>
                   Dates                      Shares     Fraction       Weighted
                Outstanding                Outstanding   of Period   Average Shares
                -----------                -----------   ---------   --------------
<S>                                        <C>           <C>         <C>
July 1, 1998.............................                               3,180
Shares repurchased during the period.....     (121)       170/274         (75)
Stock options exercised during the period        3        183/274           2
                                                                       ------
Weighted average shares..................                               3,107
                                                                       ======

Basic earnings per common share..........                              $  .42
                                                                       ======
</TABLE>

Income and share information for the nine months ended March 31, 1998 follows:

(in thousands, except per share data)

Net income.............................                                $1,549
Less: preferred stock dividends........                                     -
                                                                       ------
Income available to common shareholders                                $1,549
                                                                       ======

<TABLE>
<CAPTION>
                   Dates                      Shares     Fraction       Weighted
                Outstanding                Outstanding   of Period   Average Shares
                -----------                -----------   ---------   --------------
<S>                                        <C>           <C>         <C>
July 1, 1997..............................                              3,487
Shares repurchased during the period......    (101)       115/274         (42)
Stock options exercised during the period.      51        112/274          21
                                                                       ------
Weighted average shares...................                              3,466
                                                                       ======

Basic earnings per common share...........                             $  .45
                                                                       ======
</TABLE>



                                    8 of 17
<PAGE>   9

3. Net Income Per Common Share (continued)

Diluted Earnings Per Share Computation:

The computation of diluted earnings per common share is similar to the
computation of basic earnings per common share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the dilutive potential common shares had been issued. Potential
common shares consist of dilutive stock options using the treasury stock method.

(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                For the three months ended    For the nine months ended
                                                      March 31, 1999                March 31, 1999
                                                --------------------------    --------------------------
<S>                                                            <C>                   <C>    
Income available to common shareholders ........               $   327               $ 1,311
Plus: Preferred stock dividends ................                  --                    --
                                                               -------               -------
Income available to common shareholders ........               $   327               $ 1,311
                                                               =======               =======

Weighted average shares ........................                 3,075                 3,107
Dilutive potential common shares (stock options)                  --                      15
                                                               -------               -------
Adjusted weighted average shares ...............                 3,075                 3,122
                                                               =======               =======

Diluted earnings per share .....................               $   .11               $   .42
                                                               =======               =======
</TABLE>

Options to purchase 425,503 and 249,448 shares of common stock at a weighted
average price of $8.78 and $10.11 per share were outstanding during the three
and nine months ended March 31, 1999, respectively, which were not included in
the computation of diluted earnings per share because the option exercise prices
were greater than the average market price of the common shares during the
periods.


(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                  For the three months ended  For the nine months ended
                                                        March 31, 1998              March 31, 1998
                                                  --------------------------  -------------------------
<S>                                                            <C>                   <C>    
Income available to common shareholders ........               $   582               $ 1,549
Plus: Preferred stock dividends ................                  --                    --
                                                               -------               -------
Income available to common shareholders ........               $   582               $ 1,549
                                                               =======               =======

Weighted average shares ........................                 3,442                 3,466
Dilutive potential common shares (stock options)                    34                    29
                                                               -------               -------
Adjusted weighted average shares ...............                 3,476                 3,495
                                                               =======               =======

Diluted earnings per share .....................               $   .17               $   .44
                                                               =======               =======
</TABLE>


Options to purchase 130,000 and 196,000 shares of common stock at a weighted
average price of $10.55 and $10.14 per share were outstanding during the three
and nine months ended March 31, 1998, respectively, which were not included in
the computation of diluted earnings per share because the option exercise prices
were greater than the average market price of the common shares during the
periods.

5.  New Pronouncements

There have been no new pronouncements issued which have not already been
implemented by the Company which management believes would have a material
impact on the financial statements.



                                    9 of 17
<PAGE>   10

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

The following table sets forth, for the three-month periods indicated, the
percentages which certain components of the condensed consolidated statements of
income bear to net sales and the percentage of change of such components from
the same period of the prior year.

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                       ---------------------------------------
                                                       3/31/99         3/31/98        % Change
                                                       -------         -------        --------
<S>                                                     <C>             <C>             <C>  

Net sales ..................................            100.0           100.0           (5.9)
Cost of goods sold .........................             46.8            47.2           (6.7)
                                                        -----           -----
       Gross profit ........................             53.2            52.8           (5.3)

Selling, general and administrative expenses             36.5            34.3             .2
Research and development expenses ..........             11.1             9.2           13.3
                                                        -----           -----
       Income from operations ..............              5.6             9.3          (43.5)

Investment income ..........................              1.3             1.6          (18.5)
Other expenses, net ........................             (0.5)           (0.3)          42.3
                                                        -----           -----
       Income before income taxes ..........              6.5            10.6          (42.5)

Provision for income taxes .................              2.1             3.3          (39.6)
                                                        -----           -----
       Net income ..........................              4.3             7.3          (43.8)
                                                        =====           =====
</TABLE>

Results of Operations - Three Months Ended March 31, 1999

Net sales for the third quarter of fiscal 1999 decreased 5.9% due to softness in
both the U.S. and international markets. U.S. sales were down 7.1% and
international sales were down 4.3%. Foreign sales as a percent of total sales
increased from 42% to 43%.

Gross profit margins increased from 52.8% to 53.2%, primarily due to cost
reductions across product lines and minimal discounting in the U.S. market;
these factors more than offset the continued competitive pricing pressures in
Europe.

Selling, general and administrative expenses remained relatively flat compared
to the third quarter of fiscal 1998, primarily due to a decrease in incentive
compensation and distributor commissions resulting from decreased sales. The
13.3% increase in research and development expense reflects the Company's
continued commitment to new product development and enhancements. Management
expects research and development expenses to be between 8% and 10% of net sales
for the foreseeable future.

Investment income decreased 18.5% due to a decrease in average cash and
investment balances during the period. These balances decreased as a result of
purchases of Company shares pursuant to the ongoing stock repurchase program.

The Company's effective tax rate increased from 31.5% to 33.1% resulting from a
decrease in tax-exempt foreign sales income and lower non-taxable investment
income as a percentage of income before income taxes.



                                    10 of 17
<PAGE>   11

Management's Discussion and Analysis of
Results of Operations and Financial Condition (continued)

The following table sets forth, for the nine-month periods indicated, the
percentages which certain components of the condensed consolidated statements of
income bear to net sales and the percentage of change of such components from
the same period of the prior year.

<TABLE>
<CAPTION>
                                                                   Nine Months Ended
                                                       ---------------------------------------
                                                       3/31/99         3/31/98        % Change
                                                       -------         -------        --------
<S>                                                     <C>             <C>              <C> 

Net sales ..................................            100.0           100.0            (.6)
Cost of goods sold .........................             47.9            46.7            1.9
                                                        -----           -----
       Gross profit ........................             52.1            53.3           (2.8)

Selling, general and administrative expenses             34.8            35.8           (3.4)
Research and development expenses ..........             10.1             9.3            8.2
                                                        -----           -----
       Income from operations ..............              7.2             8.2          (12.8)

Investment income ..........................              1.4             1.8          (25.3)
Other expenses, net ........................             (0.3)           (0.3)          18.2
                                                        -----           -----
       Income before income taxes ..........              8.3             9.7          (16.0)

Provision for income taxes .................              2.6             3.1          (17.3)
                                                        -----           -----
       Net income ..........................              5.7             6.6          (15.4)
                                                        =====           =====
</TABLE>

Results of Operations - Nine Months Ended March 31, 1999

The slight decrease in total net sales was primarily attributed to continued
softness in international orders. Foreign sales decreased 3% for the period,
primarily due to a decline in sales to Europe and Asia; however, this decline
was partially offset by a 2% increase in U.S. sales resulting from the Company's
MARS, which accounted for approximately 26% of net sales for the period compared
to 12% the prior period. Foreign sales as a percent of total sales decreased
from 45% to 44%.

Gross profit margins declined from 53.3% to 52.1% primarily due to competitive
pricing pressures in Europe and a shift in product mix from the MDS to the MARS
platform.

The changes in selling, general and administrative expenses and research and
development expenses resulted primarily from the same factors described for the
quarter ended March 31, 1999. Also, selling, general and administrative expenses
decreased due to effective cost containment initiatives and the settlement of
litigation that the Company initiated to establish the validity of a patent for
microwave digestion vessels.

Investment income declined primarily due to the factors described for the
quarter ended March 31, 1999.

The Company's effective tax rate declined from 32.0% to 31.5%. Management
expects the tax rate to remain near 31.5% for the remainder of fiscal 1999.



                                    11 of 17
<PAGE>   12

Management's Discussion and Analysis of
Results of Operations and Financial Condition (continued)

Financial Condition

In the first three quarters of the fiscal year, the Company generated cash from
operations of approximately $2.2 million, including $1.3 million in net income.
An increase in accounts receivable collections was partially offset by a
decrease in current liabilities and other temporary changes in working capital
needs.

During the nine months ended March 31, 1999, the Company invested approximately
$1.3 million to acquire 121,000 shares of the Company's common stock under the
stock repurchase program. At March 31, 1999 the Company had $1.8 million
available for stock repurchases. One of the benefits of any shares repurchased
under this program will be to minimize the dilutive effect to existing
shareholders from the issuance of shares under the Company's Management Equity
Plan and Nonqualified Stock Option Plan for Non-Employee Directors. The stock
repurchase program had the effect of increasing net income per diluted share by
$.04 for the nine months ended March 31, 1999.

Management believes that working capital, planned capital expenditures, debt
servicing and stock repurchases can be funded on a current basis with cash on
hand and cash generated from operations.

Year 2000 Issues

The Company continued implementing its plan for addressing the Year 2000 Issue
during its third fiscal quarter. Plans for addressing IT systems are nearly
complete and involve primarily software upgrades and/or hardware upgrades. To
date, the Company has spent less than $75,000 to address the Year 2000 issue.
The Company does not believe that its future expenditures to address this issue
will be more than $25,000. For non-IT systems, the Company does not expect to
identify any areas that are not capable of being repaired or replaced at a
fairly low cost or where Year 2000 problems would have a material impact on the
Company.

The Company has initiated formal communications with all of its third party
vendors, suppliers and customers with whom the Company has a significant
relationship to evaluate whether these third parties have significant Year 2000
problems that could have a material adverse effect on the Company. However,
there can be no guarantee that the systems of other companies on which the
Company's systems rely will be timely converted, or that a failure to convert by
another company, or conversion that is incompatible with the Company's systems,
would not have a material effect on the Company.

The Company expects to complete its plans to address the Year 2000 Issue for a
majority of its systems sometime during late fiscal 1999, in time to allow
testing to ensure that the steps taken will be adequate to address the problems
identified. The plans to address the Year 2000 Issues for the Company's foreign
subsidiaries should be complete by September 30, 1999. If the Company's plans to
address these issues are not successful, the Company would attempt to identify
and purchase replacement systems that do not have problems associated with the
Year 2000 Issue. The cost of such replacement systems would be immaterial to the
Company.

Euro Currency Issues

Effective January 1, 1999, eleven of the fifteen member countries of the
European Union established fixed conversion rates between their existing
currencies and one common currency (the "euro"). The euro trades on currency
exchanges and is used in business transactions. Beginning in January, 2002,
bills and coins denominated in the euro will be issued and existing currencies
will be withdrawn from circulation. The Company's foreign subsidiaries do not
expect to transact a material portion of their business in the euro until fiscal
2001. Also, the Company's foreign subsidiaries are not yet required to prepare
reports to local regulatory agencies using the euro. IT systems used by the
company's foreign subsidiaries should be updated or replaced in a timely manner
to facilitate business transactions and reporting to local government agencies.
Costs to update and/or replace IT systems are not expected to exceed $50,000.

Cautionary Statement

The following cautionary statement identifies important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements made by or on behalf of the Company. Except for
factual


                                    12 of 17
<PAGE>   13

Management's Discussion and Analysis of
Results of Operations and Financial Condition (continued)

statements and historical information contained in this report, statements
contained in the foregoing discussion may be deemed forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that include projections, predictions,
expectations or beliefs about future events or results or otherwise are not
statements of historical fact. Such statements are often characterized by the
use of qualifying words (and their derivatives) such as "expect," "believe,"
"plan," "project," or other statements concerning opinions or judgment of the
Company and its management about future events.

The industry in which the Company competes, as well as the markets that it
serves, is characterized by cyclical market patterns as a consequence of, among
other things, business cycles, foreign exchange fluctuations, regulatory
changes, government spending levels and general economic conditions. These
factors affect the timing of orders from the Company's customers and cause
substantial variations in sales and profitability from quarter to quarter.
Likewise, supplier-related delays and the timing of the release of orders by the
Company's customers may affect quarter-to-quarter sales and profitability. The
Company's sales may also be adversely affected by direct and indirect
competition from third parties including, but not limited to, legal challenges
to existing patents or pending patent applications. Additionally, the Company
may experience delays in orders from customers on existing product lines,
resulting from the transitioning of improved products from the development phase
to the market.

Demand for the Company's instrumentation is substantially affected by the
enactment, timing, extent and severity of state, federal and foreign laws
governing environmental testing standards as well as product labeling
requirements including foods and pharmaceuticals. The Company has and may
experience fluctuations in sales of such products as well as in demand for
particular product enhancements as a result of actual or perceived changes in
regulatory requirements. Legislation or regulations resulting in the development
or expansion of acceptance standards for specific testing methods has and may
result in periodic delays in sales, especially in the United States. Conversely,
increases in international sales have resulted, and may result in the future,
from less stringent or nonexistent acceptance standards in a given country.

Moreover, the Company's success is dependent on its ability to continue to
develop and engineer high-quality, high-performance products that are
commercially acceptable. Risks associated with new product development include
market acceptance, competition from other products and the Company's ability to
manufacture and market products on an efficient and timely basis at a reasonable
cost and in sufficient volume.

PART II. OTHER INFORMATION

ITEMS 1, 2 and 4 are not applicable and are omitted.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

              Information about the Company's exposure to market risk was
              disclosed in its 1998 Annual Report on Form 10-K which was filed
              with the Securities and Exchange Commission on September 25, 1998.
              There have been no material quantitative changes in market risk
              exposures since the date of that filing.


ITEM 5. The Company has changed its Transfer Agent to American Stock Transfer
        and Trust.

ITEM 6. Exhibits and Reports on Form 8-K

        (a)  Exhibits:

<TABLE>
              <S>           <C>   <C>
              3.1                 Restated Charter of the Company, as amended.(1)
              3.2                 Bylaws of the Company.(1)
              10.1          *     CEM Corporation 1986 Nonqualified Stock Option Plan, as amended, incorporated herein by
                                      reference to the Company's Registration Statement on Form S-8 (File No. 33-53694).
              10.2          *     CEM Corporation Employee Stock Purchase Plan, as amended, incorporated herein by reference to
                                      the Company's Registration Statement on Form S-8 (File No. 33-80136).
              10.3          *     CEM Corporation 1987 Stock Option Plan, as amended.(1)
</TABLE>



                                    13 of 17
<PAGE>   14

<TABLE>
              <S>           <C>   <C>
              10.4          *     CEM Corporation 1993 Management Equity Plan, incorporated herein by reference to the
                                      Company's Registration Statement on Form S-8 (File No. 33-75368).
              10.5          *     CEM Corporation Management Incentive Compensation Plan(2).
              10.6                CEM Corporation 1993 Nonqualified Stock Option Plan for Non-Employee Directors,
                                      incorporated herein by reference to the Company's Registration Statement on Form
                                      S-8 (File No. 33-75366).
              27                  Financial Data Schedule (filed in electronic format only). This schedule shall not be deemed 
                                      "filed" for purposes of Section 11 of the Securities Act of 1933 or Section 18 of the
                                      Securities Exchange Act of 1934 or otherwise be subject to the liabilities of such sections,
                                      nor shall it be deemed a part of any registration statement to which it relates.

              *     This exhibit is one of the Company's management contracts and compensatory  plans and
                         arrangements.
             (1)    Incorporated herein by reference to the Company's Form 10-K for the year ended June 30, 1994.
             (2)    Incorporated herein by reference to the Company's Form 10-K for the year ended June 30, 1997.
</TABLE>

        (b)  Reports on Form 8-K:

             No Reports on Form 8-K were filed during the quarter ended
             March 31, 1999.



                                    14 of 17
<PAGE>   15

                                 CEM CORPORATION
                                    SIGNATURE


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.



Date: May 12, 1999                            CEM CORPORATION

                                              BY:  \s\ Richard N. Decker
                                                   ----------------------------
                                                       Richard N. Decker
                                                       Secretary, Treasurer and
                                                       Chief Financial Officer



                                    15 of 17
<PAGE>   16

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    EXHIBITS

                                    ITEM 6(a)

                          Quarterly Report on Form 10-Q


For the quarter ended December 31, 1998         Commission File Number: 0-15383


                                 CEM CORPORATION
                                  EXHIBIT INDEX

Exhibit Number:            Exhibit Description
--------------             -------------------

27                   Financial Data Schedule (filed in electronic format only)



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