<PAGE>   1



                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q




[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
    1934 

                  For the quarterly period ended June 30, 1998

                                       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  0-6234
                        ------

                                ACMAT CORPORATION

Connecticut                                                 06-0682460
(State of Incorporation)                                     (I.R.S.
                                                  Employer Identification No.)


              233 Main Street, New Britain, Connecticut 06050-2350
                    (Address of principal executive offices)


Registrant's telephone number including area code:                (860) 229-9000
                                                                  --------------



                                      NONE
              (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 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.

                                                       Shares outstanding
Title of Class                                         at July 31, 1998
--------------                                         ----------------

   Common Stock                                             596,357
   Class A Stock                                          2,625,416
<PAGE>   2
                                TABLE OF CONTENTS



Part I  FINANCIAL INFORMATION                                        PAGE

   Item 1.Financial Statements
          Consolidated Balance Sheets                                3
          Consolidated Statements of Earnings                        4
          Consolidated Statements of Stockholders' Equity            5
          Consolidated Statements of Cash Flows                      6
          Notes to Consolidated Financial Statements                 7

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

Part II  OTHER INFORMATION

   Item 4.Submission of Matters to a Vote of Security Holders        13

   Item 6.Exhibits and Reports on Form 8-K                           13

   Signatures                                                        14


                                       2
<PAGE>   3
Part I Financial Information

Item 1 Financial Statements

                       ACMAT CORPORATION AND SUBSIDIARIES
                              Financial Statements
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                                  June 30, 1998    December 31, 1997
                                                                                                  -------------    -----------------
Assets

<S>                                                                                              <C>                <C> 
Investments:
    Fixed maturities-available for sale, at market (Cost of $107,764,006 in 1998
      and 101,523,931 in 1997)                                                                    $107,974,134          101,852,980
    Equity securities, at market value (Cost $1,005,262 in 1998 and $983,074 in 1997)                1,027,702            1,010,927
    Short-term investments, at cost which approximates market                                        8,788,418           32,422,313
                                                                                                 -------------         ------------
     Total investments                                                                             117,790,254          135,286,220
Cash                                                                                                 4,043,523            2,095,449
Accrued interest receivable                                                                          1,464,610            1,458,164
Reinsurance recoverable                                                                              3,470,313            3,478,121
Receivables, net                                                                                     7,523,506            7,118,527
Income tax refund receivable                                                                           128,595              564,829
Prepaid expenses                                                                                       180,741              204,642
Deferred income taxes                                                                                1,799,503            1,940,936
Limited partnership investment                                                                       1,866,913            2,052,475
Property & equipment, net                                                                           12,928,465           13,179,337
Deferred policy acquisition costs                                                                    1,935,901            2,078,405
Other assets                                                                                         7,451,666            3,529,634
Intangibles, net                                                                                     3,058,697            3,222,023
                                                                                                  ------------         ------------
                                                                                                   163,642,687          176,208,762
                                                                                                   ===========          ===========
Liabilities & Stockholders' Equity

Notes payable to banks                                                                               4,000,000            5,000,000
Accounts payable                                                                                     3,430,216            3,188,554
Reserves for losses and loss adjustment expenses                                                    45,161,443           48,900,713
Unearned premiums                                                                                    9,407,709            9,804,159
Collateral held                                                                                     14,574,099           20,275,702
Accrued liabilities                                                                                  1,332,200            1,249,168
Long-term debt                                                                                      45,276,860           48,212,727
                                                                                                    ----------          -----------
       Total liabilities                                                                           123,182,527          136,631,023


Stockholders' Equity:
    Common Stock (No Par Value; 3,500,000 Shares Authorized; 596,357 and
       596,857 Shares Issued and Outstanding)                                                          596,357              596,857
    Class A Stock (No Par Value; 10,000,000 Shares Authorized; 2,688,380
       and 2,712,174 Shares Issued and Outstanding)                                                  2,688,380            2,712,174
    Retained earnings                                                                               37,021,929           36,033,153
    Accumulated other Comprehensive Income                                                             153,494              235,555
                                                                                                  ------------         ------------
       Total stockholders' equity                                                                   40,460,160           39,577,739
                                                                                                  ------------           ----------
                                                                                                  $163,642,687          176,208,762
                                                                                                  ============          ===========
</TABLE>


See Notes to Consolidated Financial Statements.


                                       3
<PAGE>   4
                       ACMAT CORPORATION AND SUBSIDIARIES
                       Consolidated Statements of Earnings



<TABLE>
<CAPTION>
                                                           Three months ended,                         Six months ended,
                                                                 June 30,                                   June 30,
                                                       ----------          ----------          -------------         ------------
                                                        1998                  1997                  1998                  1997
                                                        ----                  ----                  ----                  ----
<S>                                                   <C>                   <C>                   <C>                   <C>      
Earned premiums                                       $2,939,350            4,633,176             5,787,675             9,110,414
Contract revenues                                      2,913,692            1,818,381             5,089,384             3,591,515
Investment income, net                                 1,699,031            1,804,132             3,421,305             3,540,234
Net realized capital gains                                 1,369                5,396               104,570                40,952
Other income (expense)                                  (590,084)             380,980               (37,079)              622,759
                                                       ----------          ----------          -------------         ------------
                                                       6,963,358            8,642,065            14,365,855            16,905,874
                                                       ---------            ---------            ----------            ----------


Losses and loss adjustment expenses                      480,378            1,389,953             1,165,115             2,733,124
Amortization of policy acquisition costs                 444,824              905,826               965,695             1,768,880
Cost of contract revenues                              2,761,769            1,636,391             5,017,222             3,297,053
Selling, general and administrative expenses           1,285,974            1,394,871             2,619,166             2,855,884
Interest expense                                       1,204,849            1,365,372             2,445,983             2,685,656
                                                       ---------            ---------           -----------            ----------
                                                       6,177,794            6,692,413            12,213,181            13,340,597
                                                       ---------            ---------            ----------            ----------

Earnings before income taxes                             785,564            1,949,652             2,152,674             3,565,277

Income taxes
    Federal                                              160,310              525,237               521,894               971,636
    State                                                  5,000               15,000                 7,000                35,000
                                                       ---------             --------             ---------            ----------
                                                         165,310              540,237               528,894             1,006,636
                                                         -------              -------               -------             ---------

Net earnings                                            $620,254            1,409,415             1,623,780             2,558,641
                                                         =======            =========             =========             =========


Basic earnings per share                                    .19                  .39                   .49                   .69

Diluted earnings per share                                  .19                  .34                   .46                   .61
</TABLE>





See Notes to Consolidated Financial Statements.



                                       4
<PAGE>   5
                       ACMAT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY



<TABLE>
<CAPTION>
                                                                                                                 
                                      Common          Class A                                          Accumulated
                                      stock            stock          Additional                          other          Total
                                       par              par            paid-in          Retained       comprehensive   stockholders'
                                      value            value           capital          earnings          income          equity


<S>                                  <C>             <C>             <C>               <C>             <C>              <C>    
Balance as of December 31, 1996        $600,257      $3,488,860       $8,407,877       $36,894,494        $310,916      $49,702,404

  Acquisition and retirement of
  1,900 Shares of Common Stock           (1,900)            ---          (37,396)                              ---          (39,296)

  Acquisition and retirement of
  1,185,868 Shares of Class A Stock         ---      (1,185,868)     (12,800,481)       (3,517,839)            ---      (17,504,188)

  Issuance of 450,000 Shares                ---         450,000        4,050,000               ---             ---        4,500,000
    of Class A Stock

  Issuance of 63,500 shares of              ---          63,500          380,000               ---             ---          443,500
    Class A Stock pursuant to stock 
    options

  Net Unrealized Losses on Debt             ---             ---              ---               ---        (142,788)        (142,788)
     and Equity Securities

  Net Earnings                              ---             ---              ---         2,558,641             ---        2,558,641
                                       --------      ----------           ------       -----------        --------      -----------

Balance as of June 30, 1997            $598,357      $2,816,492          $   ---       $35,935,296        $168,128      $39,518,273
                                       ========      ==========           ======       ===========        ========      ===========



Balance as of December 31, 1997        $596,857      $2,712,174          $   ---       $36,033,153        $235,555      $39,577,739

  Acquisition and Retirement of
     500 Shares of Common Stock            (500)            ---              ---            (7,250)            ---           (7,750)

  Acquisition and Retirement of                                         (187,500)
     53,794 Shares of Class A Stock         ---         (53,794)                          (627,754)            ---         (869,048)

  Issuance of 15,000 Shares of
   Class A Stock pursuant to
   stock options                            ---          30,000          187,500               ---             ---          217,500

  Net Unrealized Losses on Debt
   and Equity Securities                    ---             ---              ---               ---         (82,061)         (82,061)

  Net Earnings                              ---             ---              ---         1,623,780             ---        1,623,780
                                       --------      ----------           ------       -----------        --------      -----------

Balance as of June 30, 1998            $596,357      $2,688,380          $   ---       $37,021,929        $153,494      $40,460,160
                                       ========      ==========          =======       ===========        ========      ===========
</TABLE>





See Notes to Consolidated Financial Statements.



                                       5
<PAGE>   6
                       ACMAT CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                     Six Months Ended June 30, 1998 and 1997


<TABLE>
<CAPTION>
                                                                                      1998                           1997
                                                                                      ----                           ----
<S>                                                                                 <C>                             <C>
Cash flows from operating activities:
    Net earnings                                                                    $1,623,780                      2,558,641
    Adjustments to reconcile net earnings to net cash provided by
      (used for) operating activities:
      Depreciation and amortization                                                    720,111                        758,386
      Net realized capital gains                                                      (104,570)                       (40,952)
      Limited Partnership Investment Adjustment                                        185,562                       (295,833)
      Changes in:
        Accrued interest receivable                                                     (6,446)                      (252,354)
         Reinsurance recoverable                                                         7,808                        419,772
         Receivables, net                                                             (404,979)                      (352,564)
         Deferred policy acquisition costs                                             142,504                        563,271
         Prepaid expenses and other assets                                          (1,084,545)                       504,975
         Accounts payable and accrued liabilities                                      324,694                       (396,965)
         Reserves for losses and loss adjustment expenses                           (3,739,270)                       506,758
         Income taxes, net                                                             619,937                        (90,377)
         Unearned premiums                                                            (396,450)                    (1,992,899)
                                                                                    -----------                    -----------
             Net cash provided by (used for) operating activities                   (2,211,864)                     2,185,692
                                                                                    ----------                    -----------

Cash flows from investing activities: 

    Proceeds from investments sold or matured:
      Fixed maturities-sold                                                         15,925,251                     17,577,826
      Fixed maturities-matured                                                      22,776,102                     14,630,000
      Equity securities                                                              1,022,466                              -
      Short term investments                                                        47,095,398                    104,665,070
    Purchases of:
      Fixed maturities                                                             (45,140,729)                   (55,823,507)
      Equity securities                                                             (1,000,000)                      (500,000)
      Short-term investments                                                       (23,461,503)                   (74,880,008)
      Collateral held                                                               (5,701,603)                    (1,514,384)
    Capital expenditures                                                               (10,279)                       (73,138)
    Other                                                                           (2,750,000)                      -
                                                                                    -----------                    -----------
         Net cash provided by investing activities                                   8,755,103                      3,786,026
                                                                                    -----------                    -----------

Cash flows from financing activities:
    Borrowings under line of credit                                                  2,000,000                      2,000,000
    Payments under line of credit                                                   (3,000,000)                    (9,200,000)
    Repayments on long-term debt                                                    (2,935,867)                    (2,161,208)
    Issuance of long-term debt                                                               -                      8,500,000
    Issuance of Class A Stock                                                          217,500                        443,500
    Payments for acquisition & retirement of stock                                    (876,798)                    (5,543,484)
                                                                                    -----------                    -----------
         Net cash used for financing activities                                     (4,595,165)                    (5,961,192)
                                                                                    -----------                    -----------

Net increase in cash                                                                 1,948,074                         10,526

Cash at beginning of period                                                          2,095,449                      2,187,227
                                                                                     ---------                      ---------

Cash at end of period                                                               $4,043,523                      2,197,753
                                                                                     =========                      =========
</TABLE>


See Notes to Consolidated Financial Statements.


                                       6
<PAGE>   7
                       ACMAT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

(1) Financial Statements

The consolidated financial statements include the accounts of ACMAT Corporation
("ACMAT" or the "Company") and its subsidiaries. The consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles and are unaudited.

The interim financial information contained in this report has been prepared
from the books and records of the Company and its subsidiaries and reflects, in
the opinion of the management of the Company, all adjustments (consisting of
normal and recurring accruals) necessary to fairly present results of operations
for the periods indicated. All significant intercompany accounts and
transactions have been eliminated in consolidation.

These statements should be read in conjunction with the financial statements and
notes thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1997.

(2) Earnings Per Share

The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
128, Earnings per Share, on December 31, 1997. SFAS No. 128 supersedes APB
Opinion No. 15, Earnings per Share, and replaces primary earnings per share and
fully diluted earnings per share with basic earnings per share and diluted
earnings per share, respectively. The Company has restated earnings per share
for all prior periods presented to comply with the provisions of SFAS No. 128.

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share ("EPS") computations for the six-month
periods ended June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                                      Average
                                                                                      Shares                  Per-Share
           1998:                                             Earnings                 Outstanding             Amount
           -----                                             --------                 -----------             ------
<S>                                                          <C>                      <C>                     <C>
           Basic EPS:
                    Earnings available to stockholders       $1,623,780               3,290,583               $.49

           Effect of Dilutive Securities:
                    Stock options                                    -                  110,492
                    Convertible Note                         $  626,175               1,500,000
                                                               --------               ---------

           Diluted EPS:
                    Earnings available to stockholders       $2,249,955               4,901,075               $.46
                                                              =========               =========                ===

           1997:
           ----- 
           Basic EPS:
                    Earnings available to stockholders       $2,558,641               3,549,008               $.69

           Effect of Dilutive Securities:
                    Stock options                                     -                 120,737
                    Convertible Senior Notes                 $   29,903                  87,017
                    Convertible Note                         $  626,175               1,500,000
                                                             ----------               ---------

           Diluted EPS:
                    Earnings available to stockholders       $3,214,719               5,256,762               $.61
                                                             ==========               =========               ====
</TABLE>




                                       7
<PAGE>   8
(3) Supplemental Cash Flow Information

Income taxes received during the six months ended June 30, 1998 was $91,043 and
income taxes paid during the six months ended June 30, 1997 was $1,097,012.
Interest paid for the six months ended June 30, 1998 and 1997 was $2,408,260 and
$2,201,064 respectively.

On February 5, 1997 the Company issued 450,000 shares of Class A Stock at $10
per share pursuant to the conversion options of the Convertible Senior Notes to
AIG Life Insurance Company and American International Life Assurance Company of
New York. The issuance of stock pursuant to the conversion option of the
Convertible Senior notes is a non-cash transaction that is not reflected in the
Consolidated Statement of Cash Flows.

(4) Stock Transaction

On February 5, 1997, ACMAT Corporation purchased 1,099,996 shares of Class A
Stock which AIG Life Insurance Company (366,663 shares) and American
International Life Assurance Company of New York, (733,333) had acquired over
the last three years through conversion options. The shares were purchased at an
average price of $14.70 per share for a total purchase price of $16,174,942. The
purchase price of $16,174,942 consisted of $4,174,942 in cash and promissory
notes totaling $12,000,000. The promissory notes are with AIG Life Insurance
Company and American International Life Assurance Company of New York and are
payable over eight years with annual payments of $1,500,000 which commenced
January 31, 1998, with interest at prime rate (8-1/2%). The interest rate is
equal to the prime rate, however, it shall not exceed 9-1/4% and it shall not be
less than 7-1/4%. The purchase of stock with the $12,000,000 promissory notes is
a non-cash transaction that is not reflected in the Consolidated Statement of
Cash Flows.

(5) Comprehensive Income

The Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income" as of January 1, 1998. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components (such as
changes in net unrealized investment gains and losses). Comprehensive income
includes net income and any changes in equity from non-owner sources that bypass
the income statement. The purpose of reporting comprehensive income is to report
a measure of all changes in equity of an enterprise that result from recognized
transactions and other economic events of the period other than transactions
with owners in their capacity as owners. Application of SFAS No. 130 will not
impact amounts previously reported for net income or affect the comparability of
previously issued financial statements.

The following table summarizes comprehensive income for the six months ended
June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                                                 1998                1997
                                                                                                 ----                ----

<S>                                                                                           <C>                <C>        
Net income                                                                                    $ 1,623,780        $ 2,558,641
Other comprehensive income, net of tax
    Unrealized gains (losses) on investments:
    Unrealized holding gain (loss) arising during period net of income tax 
       benefit of $6,720 and $59,634 for 1998 and 1997, respectively                              (13,045)          (115,760)
    Less reclassification adjustment for gains included in net income net of income tax
       expense of ($35,554) and ($13,924) for 1998 and 1997, respectively                          69,016             27,028
                                                                                              -----------        -----------
    Other comprehensive income                                                                    (82,061)          (142,788)
                                                                                              -----------        -----------

Comprehensive income                                                                          $ 1,541,719        $ 2,415,853
                                                                                              ===========        ===========
</TABLE>


(6) Future Accounting Standards

In June 1997, FASB issued SFAS No. 131, "Financial Reporting for Segments of a
Business Enterprise". SFAS No. 131 was developed jointly by the FASB and the
Accounting Standards Board of the Canadian Institute of Charted Accountants in
response to request from financial statement users for additional and better
segment information. This statement is effective for periods beginning after
December 15, 1997. In the initial year of application, comparative information
for earlier years is to be restated, unless it is impracticable to do so. The
Company does not anticipate that SFAS No. 131 will significantly impact the
composition of its current operating segments which are consistent with the
management approach. The Company anticipates that the current insurance segment
will be further disclosed as two segments as a result of SFAS No. 131.

SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, was 
issued in June 1998 and establishes accounting and reporting standards for 
derivative instruments, including certain derivative instruments embedded in 
other contracts, (collectively referred to as derivatives) and for hedging 
activities. It requires that an entity recognize all derivatives as either 
assets or liabilities in the statement of financial position and measure those 
instruments at fair value. This statement is effective for all fiscal quarters 
of fiscal years beginning after June 15, 1999, earlier application is 
encouraged, but it is permitted only as of the beginning of any fiscal quarter 
that begins after issuance of this statement. This Statement should not be 
applied retroactively to financial statements of prior periods. The adoption of 
this statement is not expected to have a material effect on the Company's 
results of operations or financial condition.



                                       8
<PAGE>   9
                                ACMAT CORPORATION

Item 2:  Management's Discussion and Analysis of
         Financial Conditions and Results of Operations

RESULTS OF OPERATIONS:

Overview

Net earnings were $620,254 for the three months ended June 30, 1998 compared to
$1,409,415 for the same period a year ago. Net earnings for the six months ended
June 30, 1998 were $1,623,780 compared to $2,558,641 for the six months ended
June 30, 1997. The decrease in net earnings for the three and six-month periods
reflects a decrease in earned premiums, investment income and a loss in the
limited partnership investment.

Earned Premiums

Net written premiums were $2,614,892 for the three months ended June 30, 1998
compared to $3,555,254 for the three months ended June 30, 1997. Net written
premiums for the six months ended June 30, 1998 were $4,874,899 compared to
$7,296,614 for the six months ended June 30, 1997. Premiums earned for the three
months ended June 30, 1998 were $2,939,350 as compared to $4,633,176 for the
three months ended June 30, 1997. Premiums earned for the six months ended June
30, 1998 were $5,787,675 as compared to $9,110,414 for the six months ended June
30, 1997. The decrease in net written premiums and earned premiums for the three
and six months ended June 30, 1998 compared to the same periods in 1997 is
primarily due to a continuing soft insurance market place and the Company's
strategy to avoid current unfavorable pricing in the Company's casualty
operation. Variances in net premiums written have historically occurred due to
the fluctuations in size, number and timing of bonds and policies bound by the
Company. The Company will maintain its existing pricing strategy and high level
of service.

Contract Revenues

Contract revenues were $2,913,692 for the three-month period ended June 30, 1998
compared to $1,818,381 for the same period in 1997. Contract revenues were
$5,089,384 for the six-month period ended June 30, 1998 compared to $3,591,515
for the same period in 1997. Construction revenue is difficult to predict and
depends greatly on the successful securement of contracts bid. The Company's
construction backlog was approximately $12,500,000 at June 30, 1998 compared to
$9,965,000 a year ago.

Investment Income, Net

Net investment income was $1,699,031 for the three-month period ended June 30,
1998 compared to $1,804,132 for the same period in 1997, representing effective
yields of 5.34% and 5.17%, respectively. Net investment income was $3,421,305
for the six-month period ended June 30, 1998 compared to $3,540,234 for the same
period in 1997, representing effective yields of 5.28% and 5.07%, respectively.
Invested assets, including cash, were $121,833,777 and $137,381,669 at June 30,
1998 and December 31, 1997, respectively. The decrease in invested assets is
attributable to net cash flow used to repay debt, repurchase stock and return
cash collateral offset by net cash flow generated from written premiums and the
reinvestment of investment income.

Net Realized Capital Gains

Realized capital gains were $1,369 for the three-month period ended June 30,
1998 compared to $5,396 for the same period in 1997. Realized capital gains in
the six-month period ended June 30, 1998 were $104,570 compared to $40,952 for
the same period in 1997.

Other Income

Other income (expense) was ($590,084) for the three-month period ended June 30,
1998 compared to $380,980 for the same period in 1997. Other income (expense)
was ($37,079) for the six-month period ended June 30, 1998 compared to $622,759
for the same period in 1997. The fluctuations in other income (expense) reflects
earnings of approximately $400,000 from the limited partnership investment in
the first quarter of 1998 and a loss of approximately $600,000 in the second
quarter.

The earnings from the limited partnership investment, which invests primarily in
small capitalization stocks, fluctuate as those stocks are traded on the
national market exchanges.


                                       9
<PAGE>   10
Costs of Contract Revenues

Costs of contract revenues were $2,761,769 for the three-month period ended June
30, 1998 compared to $1,636,391 for the same period a year ago. Costs of
contract revenues increased to $5,017,222 for the six-month period ended June
30, 1998 compared to $3,297,053 for the same period in 1997. Costs of
construction revenues vary from period to period as a function of contract
revenues (See Contract Revenues).

Losses and Loss Adjustment Expenses

Losses and loss adjustment expenses were $480,378 for the three-month period
ended June 30, 1998 compared to $1,389,953 for the same period in 1997. Losses
and loss adjustment expenses were $1,165,115 for the six months ended June 30,
1998 compared to $2,733,124 for the six months ended June 30, 1997. The decrease
in losses and loss adjustment expenses are attributable to the decline in earned
premiums from 1997 to 1998. Losses and loss adjustment expense reserves
represent management's estimate of the ultimate cost of unpaid losses incurred
for these periods relative to premiums earned.

Amortization of policy acquisition costs

Amortization of policy acquisition costs was $444,824 for the three-month period
ended June 30, 1998 as compared to $905,826 for the same period in 1997. For the
six months ended June 30, 1998, amortization of policy acquisition costs was
$965,695 compared to $1,768,880 for the same period a year ago. Policy
acquisition costs, primarily commissions, are deferred and amortized over the
policy term

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $1,285,974 for the three-month
period ended June 30, 1998 compared to $1,394,871 for the same period in 1997.
Selling, general and administrative expenses were $2,619,166 for the six-month
period ended June 30, 1998 compared to $2,855,884 for the same period in 1997.
The decrease in the selling, general and administrative expenses during the
three and six-month periods ended June 30, 1998 is due primarily to an decrease
in bad debt expense and salary expense.

Interest Expense

Interest expense decreased to $1,204,849 for the three-month period ended June
30, 1998 compared to $1,365,372 for the same period in 1997. Interest expense
decreased to $2,445,983 for the six-month period ended June 30, 1998 compared to
$2,685,656 for the same period in 1997. The decrease in interest expense for the
three and six-month periods is due primarily to the decrease in short-term and
long-term debt.

Income Taxes

Income tax expense was $165,310 for the three-month period ended June 30, 1998
compared to $540,237 for the same period in 1997, representing effective Federal
tax rates of 20.4% and 26.9%, respectively. Income tax expense was $528,894 for
the six-month period ended June 30, 1998 compared to $1,006,636 for the same
period in 1997, representing effective Federal tax rates of 24.2% and 27.3%,
respectively. The Federal effective tax rate fluctuates according to the mix of
tax-exempt and taxable securities held by the Company.

RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

Reserves for losses and loss adjustment expenses are established with respect to
both reported and incurred but not reported claims for insured risks. The amount
of loss reserves for reported claims is primarily based upon a case-by-case
evaluation of the type of risk involved, knowledge of the circumstances
surrounding each claim and the policy provisions relating to the type of claim.
As part of the reserving process, historical data is reviewed and consideration
is given to the anticipated impact of various factors such as legal developments
and economic conditions, including the effects of inflation. Reserves are
monitored and evaluated periodically using current information on reported
claims.

Management believes that the reserves for losses and loss adjustment expenses at
June 30, 1998 are adequate to cover the unpaid portion of the ultimate net cost
of losses and loss adjustment expenses, including losses incurred but not
reported. Reserves for losses and loss adjustment expenses are estimates at any
given point in time of what the Company may have to pay ultimately on incurred
losses, including related settlement costs, based on facts and circumstances
then known. The Company also reviews its claims reporting patterns, past loss
experience, risk factors and current trends and considers their effect in the
determination of estimates of 




                                       10
<PAGE>   11
incurred but not reported reserves. Ultimate losses and loss adjustment expenses
are affected by many factors which are difficult to predict, such as claim
severity and frequency, inflation levels and unexpected and unfavorable judicial
rulings. Reserves for surety claims also consider the amount of collateral held
as well as the financial strength of the principal and its indemnitors.

The Company's insurance subsidiaries' loss ratio under generally accepted
accounting principles ("GAAP") was 20.1% and 30.0% for the six-month periods
ended June 30, 1998 and 1997, respectively, These loss ratios are below industry
averages and are believed to be the result of conservative underwriting. There
can be no assurance that such loss ratios can continue. The Company's insurance
subsidiaries' expense ratios under GAAP were 51.2% and 45.4% for the six-month
period ended June 30, 1998 and 1997, respectively. The Company's insurance
subsidiaries' combined ratios under GAAP were 71.3% and 75.4% for the six-month
period ended June 30, 1998 and 1997, respectively.

LIQUIDITY AND CAPITAL RESOURCE:

The Company internally generates sufficient funds for its operations and
maintains a relatively high degree of liquidity in its investment portfolio. The
primary sources of funds to meet the demands of claim settlements and operating
expenses are premium collections, investment earnings and maturing investments.
The Company has no material commitments for capital expenditures and, in the
opinion of management, has adequate sources of liquidity to fund its operations
over the next year.

ACMAT, exclusive of its subsidiaries, has incurred negative cash flows from
operating activities primarily because of interest expense related to notes
payable and long-term debt incurred by ACMAT to acquire and capitalize its
insurance subsidiaries and to repurchase Company stock. ACMAT has also incurred
negative working capital as a result of holding short-term debt related to its
operations.

ACMAT's principal sources of funds are dividends from its wholly-owned
subsidiaries, intercompany and short-term borrowings, insurance underwriting
fees from its subsidiaries, construction contracting operations and rental
income. Management believes that these sources of funds are adequate to service
its indebtedness. ACMAT has recently utilized short-term borrowing to repurchase
its stock. ACMAT has also relied on dividends from its insurance subsidiaries to
repay debt.

The Company used cash flow for operations of $2,211,864 for the six-month period
ended June 30, 1998 compared to cash flow provided by operations of $2,185,692
for the same period in 1997. Net cash flows used for operations in 1998 were
primarily for payment of claims.

Purchases of investments are made based upon excess cash available after the
payment of losses and loss adjustment expenses and other operating and
non-operating expenses. The Company's short term investment strategy coincides
with the relatively short maturity of its liabilities which are comprised
primarily of reserves for losses covered by claims-made insurance policies,
reserves related to surety bonds and collateral held for surety obligations.

Net cash provided by investing activities in 1998 amounted to $8,755,103,
compared to net cash provided by investing activities of $3,786,026 for the same
period in 1997.

The terms of the Company's note agreements contain limitations on payment of
cash dividends, re-acquisition of shares, borrowings and investments and require
maintenance of specified ratios and minimum net worth levels, including cross
default provisions. The payment of future cash dividends and the re-acquisition
of shares are restricted each to amounts of an Available Fund. The Available
Fund is a cumulative fund which is increased each year by 20% of the
Consolidated Net Earnings (as defined). The Company is in compliance with all
covenants at June 30, 1998, except for the ratio of Earnings Before Income
Taxes, Depreciation and Amortization to Fixed Charges. We have applied for and
expect to receive a waiver for this covenant.

The Company maintains a short-term unsecured bank credit line totaling $10.0
million to fund interim cash requirements. There was $4,000,000 outstanding
under this line of credit at June 30, 1998.

During the six-month period ended June 30, 1998, the Company purchased, on the
open market and in privately negotiated transactions, 500 shares of its Common
Stock at an average price of $15.50. The Company also purchased, in open market
and privately negotiated transactions, 53,794 shares of its Class A Stock at an
average price of $16.16 per share.

The Company's principal source of cash for repayment of long-term debt is from
dividends from its two insurance companies. Under applicable insurance
regulations, ACMAT's insurance subsidiaries are restricted as to the amount of
dividends they may pay to their respective holding company, without the prior
approval of their domestic state insurance department. The amount of dividends
ACMAT's insurance subsidiaries may pay without prior insurance department
approval, are limited to approximately $10,032,000 in 1998.


                                       11
<PAGE>   12
YEAR 2000 ISSUE

In 1997, the Company began converting its computer systems to be Year 2000
compliant (e.g. to recognize the difference between '99 and '00 as one year
instead of negative 99 years). The total cost of the project is estimated to be
less than $100,000 and is being funded through operating cash flows. The Company
is expensing all costs associated with these system changes. At June 30, 1998,
approximately 50% of the Company's systems were compliant, with all systems
expected to be compliant by the end of 1998. However, there can be no assurance
that the systems of other companies on which the Company's systems rely also
will be timely converted or that any such failure to convert by another company
would not have an adverse effect on the Company's systems.


REGULATORY ENVIRONMENT

Risk-based capital requirements are used as early warning tools by The National
Association of Insurance Commissioners and the states to identify Companies that
require further regulatory action. The ratio for each of the Company's insurance
subsidiaries as of June 30, 1998 was significantly above the level which might
require regulatory action.


                                       12
<PAGE>   13
Part II - Other Information

Item 4. - Submission of Matters to a Vote of Security Holders

         a. The Annual Meeting of Stockholders of ACMAT Corporation was held on 
            Thursday, June 25, 1998.

         b. Directors elected at the meeting:

<TABLE>
<CAPTION>
                                   Votes             Votes           Brokers
                                     For            Against          Non-Votes

<S>                                <C>              <C>              <C>
   Henry Nozko, Sr.                756,668             490              0
   Henry Nozko, Jr.                757,028             330              0
   Victoria Nozko                  756,775             382              0
   John Creasy                     756,808             350              0
   Michael Sullivan                757,028             130              0
</TABLE>

         c. Other matters voted upon:

<TABLE>
<CAPTION>
                                                                                                            Brokers
                                              For                  Against             Abstain             Non-Votes
<S>                                         <C>                    <C>                 <C>                 <C>             
         1. Appointment of
             Independent Auditors           756,998                    0                   160                  0
</TABLE>


Item 6 -  Exhibits and Reports on Form 8-K

         a.  27-Financial Data Schedule

         b.  Report on Form 8-K - None




                                       13
<PAGE>   14
                                   SIGNATURES


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


                                ACMAT CORPORATION


Date:  August 13, 1998            /S/ Henry W. Nozko, Sr.
                                  -----------------------
                                  Henry W. Nozko, Sr. President and Chairman



Date:  August 13, 1998            /S/ Henry W. Nozko, Jr.
                                  -----------------------
                                  Henry W. Nozko, Jr., Executive Vice President
                                  Chief Operating Officer, and Treasurer






                                       14