<PAGE>

                       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 March 31, 2003

                                       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.

<TABLE>
<CAPTION>
                                            Shares outstanding
Title of Class                              at April 30, 2003
--------------                              ------------------
<S>                                         <C>
Common Stock                                       551,355
Class A Stock                                    1,750,104
</TABLE>
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Part I FINANCIAL INFORMATION                                               PAGE
                                                                           ----

<S>                                                                        <C>
   Item 1. Financial Statements
           Consolidated Balance Sheets                                       3
           Consolidated Statements of Earnings                               4
           Consolidates 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                    12

Part II  OTHER INFORMATION

   Item 4. Controls and Procedures
   Item 6. Exhibits and Reports on Form 8-K                                 17

Signatures                                                                  18
</TABLE>


                                       2
<PAGE>
Part I Financial Information
Item I Financial Statements

                       ACMAT CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                        March 31,      December 31,
                                                                          2003             2002
                                                                       ------------    ------------
                                                                       (Unaudited)
<S>                                                                    <C>             <C>
Assets
Investments:
   Fixed maturities-available for sale at fair value
      (Cost of $52,186,856 in 2003 and $59,872,707 in 2002)            $ 52,840,361      60,919,291
   Equity securities, at fair value (Cost of $8,935,000 in 2003
      and $6,700,559 in 2002)                                             9,184,822       6,697,150
   Short-term investments, at cost which approximates fair value          3,486,848       2,132,966
                                                                       ------------    ------------
     Total investments                                                   65,512,031      69,749,407
Cash and cash equivalents                                                23,591,404      18,724,560
Accrued interest receivable                                                 348,039         452,724
Receivables, net                                                          2,286,474       2,580,046
Reinsurance recoverable                                                  10,163,545       8,383,894
Prepaid expenses                                                            191,829         161,712
Income tax receivable                                                       217,479         308,459
Deferred income taxes                                                     2,710,158       2,639,582
Property & equipment, net                                                11,565,907      11,723,140
Deferred policy acquisition costs                                         1,531,373       1,270,669
Other assets                                                              4,395,471       4,050,210
Intangibles, net                                                          1,920,360       1,920,360
                                                                       ------------    ------------
                                                                       $124,434,070     121,964,763
                                                                       ============    ============
Liabilities & Stockholders' Equity

Accounts payable                                                       $  1,597,757       2,260,950
Reserves for losses and loss adjustment expenses                         26,272,998      25,642,865
Unearned premiums                                                         5,627,911       4,660,194
Collateral held                                                          28,311,134      25,991,045
Accrued liabilities                                                         787,429       1,044,080
Long-term debt                                                           20,914,364      21,511,921
                                                                       ------------    ------------
     Total liabilities                                                   83,511,593      81,111,055

Commitments and contingencies

Stockholders' Equity:
   Common Stock (No par value; 3,500,000 shares authorized;
      551,355 and 553,355 shares issued and outstanding)                    551,355         553,355
   Class A Stock (No par value; 10,000,000 shares authorized;
      1,755,105 and 1,756,405 shares issued and outstanding)              1,755,105       1,756,405
   Retained earnings                                                     38,320,217      37,972,590
   Accumulated other comprehensive income (loss)                            295,800         571,358
                                                                       ------------    ------------
   Total stockholders' equity                                            40,922,477      40,853,708
                                                                       ------------    ------------
                                                                       $124,434,070     121,964,763
                                                                       ============    ============
</TABLE>

See Notes to Consolidated Financial Statements.


                                       3
<PAGE>
                       ACMAT CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Earnings (Unaudited)
                   Three Months Ended March 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                       2003             2002
                                                   -----------      -----------

<S>                                                <C>              <C>
Contract revenues                                  $   724,293        5,167,531
Earned premiums                                      2,259,803        1,539,536
Investment income, net                                 634,319          884,513
Net realized capital gains                             226,122           17,653
Life insurance proceeds, net                                --        3,348,903
Other income                                           160,656          103,000
                                                   -----------      -----------
                                                     4,005,193       11,061,136
                                                   -----------      -----------

Cost of contract revenues                              638,385        5,674,741
Losses and loss adjustment expenses                    786,124        2,581,543
Amortization of policy acquisition costs               427,350          432,563
General and administrative expenses                  1,294,877        1,440,543
Interest expense                                       287,380          537,214
                                                   -----------      -----------
                                                     3,434,116       10,666,604
                                                   -----------      -----------

Earnings before income taxes                           571,077          394,532

Income taxes (benefits)                                193,490         (342,777)
                                                   -----------      -----------

Net earnings                                       $   377,587          737,309
                                                   ===========      ===========

Basic Earnings Per Share                           $       .16      $       .31

Diluted Earnings Per Share                         $       .16      $       .30
</TABLE>

See Notes to Consolidated Financial Statements.


                                       4
<PAGE>
                       ACMAT CORPORATION AND SUBSIDIARIES
           Consolidated Statements of Stockholders' Equity (Unaudited)
                             March 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                                                                 other          Total
                                                 Common stock  Class A stock    Retained    comprehensive  stockholders'
                                                   par value     par value      earnings    income (loss)     equity
                                                 ------------  -------------   -----------  -------------  -------------

<S>                                              <C>           <C>             <C>          <C>            <C>
Balance as of December 31, 2001                  $   557,589      1,827,019     35,460,226       127,341    37,972,175

Comprehensive income:
   Net unrealized losses on debt and
    equity securities                                     --             --             --      (369,759)     (369,759)
   Net earnings                                           --             --        737,309            --       737,309
                                                                                                           -----------
Total comprehensive income                                                                                     367,550

Acquisition and retirement of 4,234 shares of
   Common Stock                                       (4,234)            --        (76,255)           --       (80,489)
Acquisition and retirement of 7,500 shares of
   Class A Stock                                          --         (7,500)       (63,750)           --       (71,250)
Exercise of 7,500 shares of Class A Stock
   Pursuant to Stock options                              --          7,500         46,875            --        54,375
                                                 -----------    -----------    -----------   -----------   -----------
Balance as of March 31, 2002                     $   553,355      1,827,019     36,104,405      (242,418)   38,242,361
                                                 ===========    ===========    ===========   ===========   ===========

Balance as of December 31, 2002                  $   553,355      1,756,405     37,972,590       571,358    40,853,708

Comprehensive income:
   Net unrealized losses on debt and
    Equity securities                                     --             --             --      (267,574)     (267,574)
   Net unrealized loss on derivatives
    qualifying as hedges                                  --             --             --        (7,984)       (7,984)
   Net earnings                                           --             --        377,587            --       377,587
                                                                                                           -----------
Total comprehensive income                                                                                     102,029

Acquisition and retirement of 2,000 shares
   of Common Stock                                    (2,000)            --        (18,650)           --       (20,650)
Acquisition and retirement of 1,300 shares
   of Class A Stock                                        --        (1,300)       (11,310)           --       (12,610)
                                                 -----------    -----------    -----------   -----------   -----------
Balance as of March 31, 2003                     $   551,355      1,755,105     38,320,217       295,800    40,922,477
                                                 ===========    ===========    ===========   ===========   ===========
</TABLE>

See Notes to Consolidated Financial Statements.


                                       5
<PAGE>
                       ACMAT CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Unaudited)
                   Three Months Ended March 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                            2003             2002
                                                        ------------     ------------
<S>                                                     <C>              <C>
Cash flows from operating activities:
   Net earnings                                         $    377,587          737,309
   Adjustments to reconcile net earnings to net cash
    provided by operating activities:
     Depreciation and amortization                           397,434          293,584
     Net realized capital gains                             (226,122)         (17,653)
   Changes in:
Accrued interest receivable                                  104,685           58,262
Reinsurance recoverable                                   (1,779,651)         344,482
Receivables, net                                             293,572       (1,915,861)
Deferred policy acquisition costs                           (260,704)          28,274
Prepaid expenses and other assets                           (375,378)       2,537,306
Accounts payable and accrued liabilities                    (927,830)       1,243,230
Cash collateral held                                       2,320,089        1,755,650
Reserves for losses and loss adjustment expenses             630,133           92,188
Income taxes, net                                            158,243         (460,949)
Unearned premiums                                            967,717         (155,377)
                                                        ------------     ------------
   Net cash provided by operating activities               1,679,775        4,540,445
                                                        ------------     ------------

Cash flows from investing activities:
Proceeds from investments sold or matured:
   Fixed maturities-sold                                   6,652,707        2,571,465
   Fixed maturities-matured                               16,573,669        6,160,000
   Equity securities                                              --          636,490
   Short-term investments                                  5,066,635        3,920,669
Purchases of:
   Fixed maturities                                      (15,521,706)      (7,912,546)
   Equity securities                                      (2,500,000)      (1,185,000)
   Short-term investments                                 (6,420,517)      (3,863,471)
Capital expenditures                                         (32,902)         (71,817)
                                                        ------------     ------------
     Net cash provided by investing activities             3,817,886          255,790
                                                        ------------     ------------

Cash flows from financing activities:
   Repayments on long-term debt                             (597,557)        (418,870)
   Issuance of Class A Stock                                      --           54,375
   Payments for acquisition & retirement of stock            (33,260)        (151,540)
                                                        ------------     ------------
     Net cash used for financing activities                 (630,817)        (516,035)
                                                        ------------     ------------

Net change in cash and cash equivalents                    4,866,844        4,280,200

Cash and cash equivalents at beginning of period          18,724,560       12,784,806
                                                        ------------     ------------

Cash and cash equivalents at end of period              $ 23,591,404       17,065,006
                                                        ============     ============
</TABLE>

See Notes to Consolidated Financial Statements.


                                       6
<PAGE>
                       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 accounting principles generally
accepted in the United States of America 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, 2002.

(2) Earnings Per Share

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share ("EPS") computations for the three-month
periods ended March 31, 2003 and 2002.

<TABLE>
<CAPTION>
                                                             Average
                                                             Shares        Per-Share
2003:                                          Earnings      Outstanding   Amount
                                               --------      -----------   ---------
<S>                                            <C>           <C>           <C>
Basic EPS:
         Earnings available to stockholders    $ 377,587     2,308,137     $ .16

Effect of Dilutive Securities:
         Stock options                                --        18,797       xxx
                                               ---------     ---------     -----

Diluted EPS:
         Earnings available to stockholders    $ 377,587     2,326,934     $ .16
                                               =========     =========     =====

2002:
Basic EPS:
         Earnings available to stockholders    $ 737,309     2,382,043     $ .31

Effect of Dilutive Securities:
         Stock options
                                                      --        54,343       xxx
                                               ---------     ---------     -----
Diluted EPS:
         Earnings available to stockholders    $ 737,309     2,436,386     $ .30
                                               =========     =========     =====
</TABLE>

(3) Supplemental Cash Flow Information

Income tax paid during the three months ended March 31, 2003 and 2002 was
$35,247 and $117,985, respectively. Interest paid for the three months ended
March 31, 2003 and 2002 was $289,132 and $282,344, respectively.


                                       7
<PAGE>
(4) Comprehensive Income

The following table summarizes reclassification adjustments for other
comprehensive income (loss) and the related tax effects for the three months
ended March 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                               2003          2002
                                                            ---------     ---------
<S>                                                         <C>           <C>
Unrealized gains (losses) on investments:
Unrealized holding gain (loss) arising during period,
    net of income tax                                       $(416,815)     (381,410)
Less reclassification adjustment for gains included in
    net income, net of income tax expense of $76,881 and
    $6,001 for 2003 and 2002, respectively                    149,241        11,651
                                                            ---------     ---------
Other comprehensive income (loss)                           $(267,574)     (369,759)
                                                            =========     =========
</TABLE>

(5) Stock-Based Compensation

The Company accounts for stock options under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25 (APB 25), "Accounting
for Stock Issued to Employees", and related interpretations.

The stock options were awarded at an exercise price equal to the market value of
the underlying common stock on the date of the grant. Accordingly, there has
been no employee compensation cost recognized in earnings for the stock options.

FAS 123 provides an alternative to APB 25 whereby fair values may be ascribed to
options using a valuation model and amortized to compensation cost over the
vesting period of the options. The following tables illustrate the pro forma
effect on net income and earnings per share for each period indicated as if the
Company applied the fair value recognition provisions of FAS 123 to its stock
option program.

The pro forma fair value of stock-based compensation in the Company's Class A
Shares for the quarter ended March 31, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                               2003         2002
                                                             ---------    ---------
<S>                                                          <C>          <C>
Net earnings as reported                                     $ 377,587      737,309
Add: Stock-based employee compensation reported in net
    earnings, net of related tax effects                            --           --
Deduct: Stock-based compensation expense determined under
    fair value based method, net of related tax effects       (32,067)           --
                                                             ---------    ---------
Net earnings, pro forma                                      $ 345,520      737,309
                                                             =========    =========

Earnings per share
  Basic and diluted - as reported                            $.16/$.16      .31/.30
  Basic and diluted - pro forma                              $.15/$.15      .31/.30
</TABLE>

The significant assumptions used during the year in estimating the fair value on
the date of the grant for original options and reload options granted in 2002
were as follows:

<TABLE>
<CAPTION>
                                                              2002
                                                              ----
<S>                                                           <C>
Expected life of stock options, in years                       9
Expected volatility of ACMAT stock                            44%
Risk-free interest rate                                      4.0
Expected annual dividend yield                                --
Expected annual forfeiture rate                               --
</TABLE>

No options were granted in 2003.

(6) New Accounting Standards

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" (FAS 143). FAS 143 changes
the measurement of an asset retirement obligation from a cost-accumulation
approach to a fair value approach, where the fair value (discounted value) of an
asset retirement obligation is recognized as a liability in the period in which
it is incurred and accretion expense is recognized using the credit-adjusted
risk-free interest rate in effect when the liability was initially recognized.
The associated asset retirement costs are capitalized as part of the carrying
amount of the long-lived asset and subsequently amortized into expense. The
pre-FAS 143 prescribed practice of reporting a retirement obligation as a
contra-asset will no longer be allowed. The Company is not impacted by this new
standard which took effect on January 1, 2003.


                                       8
<PAGE>
In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" (FAS
146). FAS 146 requires that a liability for costs associated with exit or
disposal activities be recognized when the liability is incurred. Existing
generally accepted accounting principles provide for the recognition of such
costs at the date of management's commitment to an exit plan. In addition, FAS
146 requires that the liability be measured at fair value and be adjusted for
changes in estimated cash flows. The provisions of the new standard are
effective for exit or disposal activities initiated after December 31, 2002. The
Company is not impacted by this new standard.

(7) Life Insurance Proceeds, net

On January 13, 2002, the Founder, Chairman, President and Chief Executive
Officer of the Corporation died at the age of 82. At the time of his death, Mr.
Nozko, Sr. owned of record or beneficially shares of the Corporation's Common
Stock and Class A Stock having approximately 53% of the total voting power of
the Corporation's voting capital stock. During the pendency of Mr. Nozko's
estate, such voting power has been vested in the executors of the estate who are
his son, Henry W. Nozko, Jr., the current Chairman, President and Chief
Executive Officer of the Corporation, and his daughter Pamela N. Cosmas.

The Company was the owner and beneficiary of several key-man life insurance
policies totaling approximately $11.9 million. After consideration of the
cash-surrender value of the policies, the Company reported a gross gain of
approximately $8.8 million during the three-month period ended March 31, 2002.
In connection with the passing of Henry W. Nozko, Sr., the Company incurred
certain obligations, previously approved by the Board of Directors, totaling
approximately $5.5 million. These obligations for consulting fees, widow's
compensation and unused vacation pay were due only to the extent that sufficient
proceeds existed from the life insurance policies at the time of Mr. Nozko's
death.

(8) Segment Reporting

The Company has three reportable operating segments: ACMAT Contracting, ACSTAR
Bonding and United Coastal Liability Insurance. The Company's reportable
segments are primarily the three main legal entities of the Company which offer
different products and services. The accounting policies of the segments are the
same as those described in the summary of significant accounting policies.

ACMAT Contracting provides construction contracting services to commercial and
governmental customers. ACMAT Contracting also provides underwriting services to
its insurance subsidiaries. In addition, ACMAT Contracting owns a commercial
office building in New Britain Connecticut and leases office space to its
insurance subsidiaries as well as to third parties.

The United Coastal Liability Insurance operating segment offers specific lines
of liability insurance as an approved non-admitted excess and surplus lines
insurer in forty-six states, Puerto Rico, the Virgin Islands and the District of
Columbia. United Coastal offers claims made and occurrence policies for specific
specialty lines of liability insurance through certain excess and surplus lines
brokers who are licensed and regulated by the state insurance department(s) in
the state(s) in which they operate. United Coastal offers general, asbestos,
lead, pollution and professional liability insurance nationwide to specialty
trade contractors, environmental contractors, property owner, storage and
treatment facilities and professionals. United Coastal also offers products
liability insurance to manufacturers and distributors.

The Bonding operating segment provides, primarily through ACSTAR, surety bonds
written for prime, specialty trade, environmental, asbestos and lead abatement
contractors and miscellaneous obligations. ACSTAR also offers other
miscellaneous surety such as workers' compensation bonds, supply bonds,
subdivision bonds and license and permit bonds.


                                       9
<PAGE>
The Company evaluates performance based on earnings before income taxes and
excluding interest expense. The Company accounts for intersegment revenue and
expenses as if the products/services were to third parties. Information relating
to the three segments for the three-month periods ended March 31, 2003 and 2002
is summarized as follows:

<TABLE>
<CAPTION>
                                                   2003              2002
                                               -----------       -----------
<S>                                            <C>               <C>
Revenues:
ACSTAR Bonding                                 $ 1,747,851         1,132,867
United Coastal Liability Insurance               1,399,415         1,238,216
ACMAT Contracting                                1,412,151         5,871,677
                                               -----------       -----------
                                               $ 4,559,417         8,242,760
                                               ===========       ===========
Operating Earnings (Loss):
ACSTAR Bonding                                 $   671,718          (238,180)
United Coastal Liability Insurance                 435,049        (1,263,153)
ACMAT Contracting                                 (248,310)         (915,824)
                                               -----------       -----------
                                               $   858,457        (2,417,157)
                                               ===========       ===========

Depreciation and Amortization:
ACSTAR Bonding                                     130,025            99,141
United Coastal Liability Insurance                 145,611            49,703
ACMAT Contracting                                  121,798           144,740
                                               -----------       -----------
                                                   397,434           293,584
                                               ===========       ===========
</TABLE>

<TABLE>
<CAPTION>
Identifiable Assets:                          March 31, 2003   December 31, 2002
                                              --------------   -----------------
<S>                                           <C>              <C>
ACSTAR Bonding                                 $ 58,762,113        56,407,938
United Coastal Liability Insurance               48,099,257        46,443,389
ACMAT Contracting                                17,572,700        19,113,436
                                               ------------      ------------
                                               $124,434,070       121,964,763
                                               ============      ============
</TABLE>

The components of revenue for each segment for the three-month periods ended
March 31, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                          2003          2002
                                                       ----------    ----------
<S>                                                    <C>           <C>
ACSTAR Bonding:
  Premiums                                             $1,177,974       803,178
  Investment income, net                                  323,486       330,380
  Capital gains (losses)                                  180,145          (237)
  Other                                                    66,246          (454)
                                                       ----------    ----------
                                                       $1,747,851     1,132,867
                                                       ==========    ==========

United Coastal Liability Insurance:
  Premiums                                             $1,081,829       736,358
  Investment income, net                                  265,915       481,360
  Capital gains                                            45,977        17,890
  Other                                                     5,694         2,608
                                                       ----------    ----------
                                                       $1,399,415     1,238,216
                                                       ==========    ==========
ACMAT Contracting:
  Contract revenues                                    $  724,293     5,167,531
  Investment income, net                                    5,414        42,773
  Intersegment revenue:
    Rental income                                         178,702       369,979
    Underwriting services and agency commissions          415,026       191,731
  Other                                                    88,716        99,663
                                                       ----------    ----------
                                                       $1,412,151     5,871,677
                                                       ==========    ==========
</TABLE>


                                       10
<PAGE>
The following is a reconciliation of segment totals for revenue and operating
income to corresponding amounts in the Company's statement of earnings:

<TABLE>
<CAPTION>
                                                    2003                2002
                                                ------------       ------------
<S>                                             <C>                <C>
Revenue:
   Total revenue for reportable segments        $  4,559,417          8,242,760
   Life insurance proceeds, net                           --          3,348,903
   Intersegment eliminations                        (554,224)          (530,527)
                                                ------------       ------------
                                                $  4,005,193         11,061,136
                                                ============       ============
</TABLE>

The adjustments and eliminations required to arrive at consolidated amounts
shown above consist principally of the elimination of the intersegment revenues
related to the performance of certain services and rental charges. Identifiable
assets are those assets that are used by each segment's operations. Foreign
revenues are not significant.

<TABLE>
<CAPTION>
                                                                 2003           2002
                                                              ----------     ----------
<S>                                                           <C>            <C>
Operating Earnings:
   Total operating earnings (loss) for reportable segments    $  858,457     (2,417,157)
   Interest expense                                             (287,380)      (537,214)
   Life insurance proceeds, net                                       --      3,348,903
                                                              ----------     ----------
                                                              $  571,077        394,532
                                                              ==========     ==========
</TABLE>

Operating earnings for ACMAT contracting are operating revenues less cost of
contract revenues and identifiable selling, general and administrative expenses.
Operating earnings for the bonding and liability insurance segments are revenues
less losses and loss adjustment expenses, amortization of policy acquisition
costs and identifiable general and administrative expenses.


                                       11
<PAGE>
                       ACMAT CORPORATION AND SUBSIDIARIES

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

CONSOLIDATED RESULTS OF OPERATIONS:

Net earnings were $377,587 for the three months ended March 31, 2003 compared to
$737,309 for the same period a year ago. Net earnings in 2003 also reflects an
increase in earned premiums offset in part by a decrease in losses and loss
adjustment expenses. The decrease in net earnings is largely due to the absence
of a one-time benefit from life insurance proceeds received in 2002. The net
earnings in 2002 reflects the net effect of life insurance proceeds, net of the
related obligations, due to the death of the Chairman and President of the
Company and the related tax benefits. Net earnings in 2002 were also negatively
impacted by an increase to loss reserves due to adverse development in prior
years and additional remediation expenses incurred on a construction project
that significantly exceeded the original estimate.

Revenues were $4,005,193 for the three months ended March 31, 2003 compared to
$11,061,136 for the same period in 2002. The 2002 revenues reflects the net
affect of life insurance proceeds and related obligations due to the death of
the Chairman and President of the Company and increased construction revenues.
Earned premiums were $2,259,803 for the three months ended March 31, 2003
compared to $1,539,536 for the same period a year ago. Contract revenues were
$724,293 for the three months ended March 31, 2003 compared to $5,167,531 for
the same period a year ago. Contract revenue is difficult to predict and depends
greatly on the successful securement of contracts bid.

Investment income was $634,319 for the three months ended March 31, 2003
compared to $884,513 for the same period in 2002. The decrease in investment
income was primarily related to a slight decrease in invested assets and a
decrease in the effective yield on those invested assets. Net realized capital
gains were $226,122 for the three months ended March 31, 2003 compared to
$17,653 for the same period a year ago.

Life insurance proceeds received in 2002 reflect the net proceeds of several
key-man life insurance policies totaling approximately $8,800,000. In addition,
the Company incurred certain obligations, previously approved by the Board of
Directors, totaling approximately $5,500,000. These obligations for consulting
fees, widow's compensation and unused vacation pay were due only to the extent
that sufficient proceeds existed from the life insurance policies at the time of
Mr. Nozko's death.

Other income was $160,656 for the three months ended March 31, 2003 compared to
$103,000 for the same period in 2002. Other income is primarily comprised of
rental income.

Losses and loss adjustment expenses were $786,124 for the three months ended
March 31, 2003 compared to $2,581,543 for the same period a year ago. During the
three-month period ended March 31, 2002, the Company increased reserves by a net
amount of $2,200,000. Amortization of policy acquisition costs were $427,350 for
the three months ended March 31, 2003 compared to $432,563 for the same period
in 2002.

Costs of contract revenues were $638,385 for the three months ended March 31,
2003 compared to $5,674,741 for the same period a year ago. The gross profit
margin on construction projects was 12% in 2003 compared to a gross loss margin
of (10%) in 2002. The Company incurred additional remediation expenses involving
a construction project in 2002 that significantly exceeded the original
estimate. Gross margin fluctuations each year based upon the profitability of
specific projects.

General and administrative expenses were $1,294,877 for the three months ended
March 31, 2002 compared to $1,440,543 for the same period a year ago. The
decrease in general and administrative expenses reflects a decrease in
depreciation expense and a one-time investment write-off in 2002.

Interest expense was $287,380 for the three months ended March 31, 2003 compared
to $537,214 for the same period in 2002. The decrease in interest expense is due
to the decrease in long-term debt and the replacement of high interest-bearing
debt with lower interest bearing debt during the fourth quarter of 2002.

Income tax expense was $193,490 for the three months ended March 31, 2003
compared to income tax benefit $342,777 for the same period a year ago
representing effective tax rates of 33.4% and (87%), respectively. The effective
tax rate in 2003 reflects the Company's reduction in tax-exempt interest. The
effective rate in 2002 reflects the recognition of net life insurance proceeds
which are exempt for income tax purposes.


                                       12
<PAGE>
Results of Operations by Segment:

      ACSTAR BONDING:
                                             2003             2002
                                          ----------       ---------
      Revenue                             $1,747,851       1,132,867
      Operating Earnings (Loss)           $  671,718        (238,180)

Revenues for the ACSTAR Bonding segment were $1,747,851 for the three months
ended March 31, 2003 compared to $1,132,867 for the same period in 2002. Net
written premiums were $1,252,689 for the three months ended March 31, 2003
compared to $667,132 for the three months ended March 31, 2002. Earned premiums
were $1,177,974 for the three months ended March 31, 2003 compared to $803,178
for the three months ended March 31, 2002.

The increase in net written premiums and earned premiums for the three months
ended March 31, 2003 as compared to the three months ended March 31, 2002,
reflect the impact of the favorable insurance market. ACSTAR has experienced a
significant increase in business opportunities over the past twelve months that
meet ACSTAR's underwriting standards.

Investment income was $323,486 for the three months ended March 31, 2003
compared to $330,380 for the same period a year ago. The 2003 investment income
reflects an increase in invested assets offset by a decrease in the effective
yield on those invested assets. Net realized capital gains were $180,145 for the
three months ended March 31, 2003 compared to net realized capital losses of
$237 for the same period a year ago.

ACSTAR Bonding segment had operating earnings of $671,718 for the three months
ended March 31, 2003 compared to operating losses of ($238,180) for the same
period in 2002. The 2003 operating earnings reflect the increase in earned
premiums and the decrease in losses and loss adjustment expenses. The operating
loss in 2002 is due primarily to the addition of $500,000, net of recoveries, to
loss reserves for adverse development in prior years.

Losses and loss adjustment expenses were $353,392 for the three months ended
March 31, 2003 compared to $660,636 for the same period a year ago. The 2002
losses and loss adjustment expenses reflect increases attributable to the
strengthening of loss reserves due to adverse development in prior years and
also reflects the emergence of adverse loss trends in 2002. During the
three-month period ended March 31, 2002, the Company increased ACSTAR reserves
by a net amount of $500,000. Amortization of policy acquisition costs was
$432,168 for the three months ended March 31, 2003 compared to $338,028 for the
same period in 2002. The increase in amortization of policy acquisition costs
reflects the increase in earned premiums in 2003.

General and administrative expenses were $290,573 for the three months ended
March 31, 2003 compared to $372,383 for the same period a year ago. The decrease
in general and administrative expenses is due primarily to a decrease in rental
expense charged by ACMAT effective January 1, 2003.

      UNITED COASTAL LIABILITY
      INSURANCE:
                                               2003            2002
                                            ----------      ----------
      Revenue                               $1,399,415       1,238,216
      Operating Earnings (Loss)             $  435,049      (1,263,153)

Revenues for the United Coastal Liability Insurance segment were $1,399,415 for
the three months ended March 31, 2003 compared to $1,238,216 for the same period
in 2002. Net written premiums were $2,036,492 for the three months ended March
31, 2003 compared to $804,755 for the three months ended March 31, 2002. The
increase in 2003 net written premiums compared to 2002 reflects the impact of
the favorable insurance rate market. United Coastal has experienced a
significant increase in business opportunities over the past twelve months that
meet United Coastal's underwriting standards. Earned premiums were $1,081,829
for the three months ended March 31, 2003 compared to $736,358 for the three
months ended March 31, 2002. The increase in 2003 earned premiums reflect the
increase in net written premiums in 2003.

Investment income was $265,915 for the three months ended March 31, 2003
compared to $481,360 for the same period a year ago. The decrease in investment
income was primarily related to a decrease in invested assets as a result of
dividends distributed to the parent company to reduce corporate debt as well as
a significant amount of early principal paydowns on mortgage-backed securities
due to the interest rate environment. The effective yield on the invested assets
has also decreased. Net realized capital gains were $45,977 for the three months
ended March 31, 2003 as compared to realized capital gains of $17,890 for the
same period a year ago.


                                       13
<PAGE>
United Coastal Liability Insurance segment incurred an operating earnings of
$435,049 for the three months ended March 31, 2003 as compared to operating
losses of ($1,263,153) for the same period in 2002. The 2003 operating earnings
reflect the increase in earned premiums and the decrease in losses and loss
adjustment expenses. The operating loss in 2002 is due primarily to the addition
of $1,700,000 to loss reserves for adverse development in prior years.

Losses and loss adjustment expenses were $432,732 for the three months ended
March 31, 2003 compared to $1,920,907 for the same period a year ago. The 2002
losses and loss adjustment expenses reflect increases attributable to the
strengthening of loss reserves due to adverse development in prior years. During
the three-month period ended March 31, 2002, the Company increased United
Coastal reserves by a net amount of $1,700,000. Amortization of policy
acquisition costs were $293,713 for the three months ended March 31, 2003 as
compared to $219,879 for the same period in 2002. The increase in amortization
of policy acquisition costs is primarily attributable to the increase in earned
premiums.

General and administrative expenses were $237,921 for the three months ended
March 31, 2003 compared to $360,583 for the same period a year ago. The decrease
in general and administrative expenses is due primarily to the absence of
expenses related to the statutory audit by The Arizona Insurance Department
conducted in 2002 and a decrease in 2003 rental expense charged by ACMAT
effective January 1, 2003.

      ACMAT CONTRACTING:
                                                2003             2002
                                             ----------       ---------
      Revenue                                $1,412,151       5,871,677
      Operating Earnings (Loss)               ($248,310)       (915,824)

Revenues for the ACMAT Contracting segment were $1,412,151 for the three months
ended March 31, 2003 compared to $5,871,677 for the same period in 2002. The
2003 decrease in revenue reflects a decrease in contract revenues compared to
2002 due to the completion of most of the backlog during 2002.

Operating losses for the ACMAT Contracting segment were $248,310 for the three
months ended March 31, 2003 compared to operating losses of $915,824 for the
same period a year ago. The operating losses in 2003 is due primarily to the
significant decrease in contract revenue and the decrease in rental income
charged to ACSTAR and United Coastal effective January 1, 2003. The operating
loss in 2002 is due primarily to additional remediation expenses incurred on a
construction project that significantly exceeded the original estimate.

The 2003 decrease in revenue reflects the completion of most of the backlog in
2002. Contract revenue depends greatly on the successful securement of contracts
bid and execution. The Company is substantially complete with its current
projects and its current backlog relates to primarily one profitable project.
The backlog at March 31, 2003 was $400,000 compared to $9,600,000 at March 31,
2002. The significant decrease in backlog reflects the significant number of
contractors competing for a limited number of projects available in our market
place.

Cost of contract revenues were $638,385 for the three months ended March 31,
2003 compared to $5,674,741 for the same period in 2001. The gross profit margin
on construction projects was 12% in 2003 compared to gross loss margin of 10% in
2002. Gross margin fluctuations each year based upon the profitability of
specific projects.

General and administrative expenses were $1,022,076 for the three months ended
March 31, 2003 compared to $1,112,760 for the same period a year ago. The
decrease in general and administrative expenses for the three month period ended
March 31, 2003 compared to the same period a year ago is due to a decrease in
depreciation and a one-time investment write-off in 2002.

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
March 31, 2003 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 claim reporting patterns, loss
experience, risk factors and current trends and considers their effect in the
determination of estimates of incurred but not reported reserves.


                                       14
<PAGE>
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 ratios under generally accepted
accounting principles ("GAAP") were 34.8% and 167.7% for the three-month periods
ended March 31, 2003 and 2002, respectively. The 2002 losses and loss adjustment
expenses increases are attributable to the strengthening of loss reserves due to
adverse development in prior years and emergence of loss trends in the current
year. During the three-month period ended March 31, 2002, the Company increased
reserves by a net amount of $2,200,000. The Company's insurance subsidiaries'
expense ratios under GAAP were 55.5% and 83.8% for the three-month period ended
March 31, 2003 and 2002, respectively. The decrease in the 2003 expense ratio
results primarily from the increase in earned premiums and lower rental expense.
The Company's insurance subsidiaries' combined ratios under GAAP were 90.3% and
251.5% for the three-month period ended March 31, 2003 and 2002, respectively.

LIQUIDITY AND CAPITAL RESOURCES:

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 long-term
debt incurred by ACMAT to acquire and capitalize its insurance subsidiaries and
to repurchase Company stock.

ACMAT's principal sources of funds are dividends from its wholly-owned
subsidiaries, 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 relied on dividends
from its insurance subsidiaries to repay debt.

The Company provided cash flow from operations of $1,679,775 for the three-month
period ended March 31, 2003 compared to $4,540,445 for the same period in 2002.
The cash flow from operations is due primarily to the increase in cash
collateral. Net cash flows provided from operations in 2002 were provided from
net life insurance proceeds and cash collateral. Substantially all of the
Company's cash flow was used to repay long-term debt, repurchase stock and
purchase investments. 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 the first quarter of 2003 amounted
to $3,817,886 compared to $255,790 for the same period in 2002. 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 terms of the Company's debt 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. The Company is in compliance with all covenants at
March 31, 2003.

The Company maintains a short-term unsecured bank credit line totaling $10
million to fund interim cash requirements. There were no borrowings under this
line of credit as of March 31, 2003.

During the three-month period ended March 31, 2003, the Company purchased, in
the open market and privately negotiated transactions, 2,000 shares of its
Common Stock at an average price of $10.33 per share. In addition, the Company
purchased, in the open market and privately negotiated transactions, 1,300
shares of its Class A Stock at an average price of $9.70 per share during the
three-month period ended March 31, 2003.

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 companies, without the prior
approval of their domestic State insurance department. The amount of dividends
ACMAT's insurance subsidiaries may pay, without prior approval of their domestic
State insurance departments, are limited to approximately $4,491,000 in 2003.


                                       15
<PAGE>
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 March 31, 2003 was above the level which might require
regulatory action.

CONTRACTUAL CASH OBLIGATIONS AND COMMITMENTS:

Contractual obligations at March 31, 2003 include the following:

<TABLE>
<CAPTION>
Payment due by Period             Total         2003       2004/2005     2006/2007     After 2006
                                  -----         ----       ---------     ---------     ----------
<S>                            <C>           <C>           <C>           <C>           <C>
Long-Term Debt (principal)     $20,914,364   $1,807,831    $5,223,604    $5,217,451    $8,665,478
</TABLE>

The Company also has cash collateral of $28,311,134 at March 31, 2003, which it
would be required to return at the end of expiration of applicable bond period
subject to any claims.


                                       16
<PAGE>
Part II - Other Information

Item 4 - Controls and Procedures

      The Company maintains a system of internal controls and procedures
      designed to provide reasonable assurance as to the reliability of our
      published financial statements and other disclosures included in this
      report. Within the 90-day period prior to the date of this report, we
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures pursuant to Rule 13a-14 of the Securities Exchange
      Act of 1934. Based upon that evaluation, our Chief Executive Officer and
      our Principal Financial Officer concluded that our disclosure controls and
      procedures are effective in timely alerting them to material information
      relating to ACMAT Corporation (including its consolidated subsidiaries)
      required to be included in this quarterly report on Form 10-Q.

      There have been no significant changes in our internal controls or in
      other factors which could significantly affect internal controls
      subsequent to the date that we carried out our evaluation.

Item 6 - Exhibits and Reports on Form 8-K

a.    Exhibits:

      99.1  Certification of Chief Executive Officer

      99.2  Certification of Chief Financial Officer

b.    Report on Form 8-K - None


                                       17
<PAGE>
                                   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:  May 15, 2003                 /s/ Henry W. Nozko, Jr.
                                    -----------------------
                                    Henry W. Nozko, Jr.,  President, Chairman
                                    Chief Executive Officer, and Treasurer


Date:  May 15, 2003                 /s/ Michael P. Cifone
                                    ---------------------
                                    Michael P. Cifone, Senior Vice President
                                    (Principal Financial and Accounting Officer)


                                       18
<PAGE>
                                  CERTIFICATION

I, Henry W. Nozko, Jr., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of ACMAT Corporation;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    ACMAT's other certifying officers and I are responsible for establishing
      and maintaining disclosure controls and procedures as defined in Exchange
      Act Rules 13a-14 and 15d-14) for ACMAT and we have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to ACMAT, including its consolidated
            subsidiaries, is made known to us by others within those entities,
            particularly during the period in which this quarterly report is
            being prepared;

      b)    evaluated the effectiveness of ACMAT's disclosure controls and
            procedures as of a date within 90 days prior to filing date of this
            quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of the board of directors;

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect ACMAT's ability to record,
            process, summarize and report financial data and have identified for
            ACMAT's auditors any material weaknesses in internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    ACMAT's other certifying officers and I have indicated in this quarterly
      report whether or not there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.

Date:    May 15, 2003
                                                       /s/ Henry W. Nozko, Jr.
                                                       -------------------------
                                                       Chief Executive Officer


                                       19
<PAGE>
                                  CERTIFICATION

I, Michael P. Cifone., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of ACMAT Corporation;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    ACMAT's other certifying officers and I are responsible for establishing
      and maintaining disclosure controls and procedures as defined in Exchange
      Act Rules 13a-14 and 15d-14) for ACMAT and we have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to ACMAT, including its consolidated
            subsidiaries, is made known to us by others within those entities,
            particularly during the period in which this quarterly report is
            being prepared;

      b)    evaluated the effectiveness of ACMAT's disclosure controls and
            procedures as of a date within 90 days prior to filing date of this
            quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of the board of directors;

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect ACMAT's ability to record,
            process, summarize and report financial data and have identified for
            ACMAT's auditors any material weaknesses in internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    ACMAT's other certifying officers and I have indicated in this quarterly
      report whether or not there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


Date: May 15, 2003
                                                    /s/ Michael P. Cifone
                                                    ----------------------------
                                                    Chief Financial Officer


                                       20